a. Economics is the study of choice under conditions of scarcity. Scarcity arises because human wants are unlimited, but resources available to satisfy those wants are limited. In the Ghanaian banking context, this principle applies when banks allocate limited capital to various lending opportunities, prioritizing high-return, low-risk options to comply with Bank of Ghana’s Capital Requirements Directive, ensuring efficient use of scarce funds for economic growth.

b. In the household, scarce resources are allocated through budgeting and prioritization based on needs and wants. Households assess their income (scarce resource) against expenses, using tools like family budgets to decide on essentials like food and education first, then discretionary items. For example, in Ghana, a household might allocate income from salaries or remittances to cover utility bills under the Public Utilities Regulatory Commission tariffs, reflecting real-world trade-offs to avoid debt, similar to how banks manage liquidity under BoG’s Liquidity Risk Management Guidelines.

c. The term “necessity” refers to essential goods or services required for basic survival and well-being, without which life would be severely impaired. These include food, water, shelter, and clothing. In banking, necessities influence consumer lending; for instance, Ghanaian banks like GCB Bank offer loans for housing (a necessity) at preferential rates, aligning with BoG’s directives to promote financial inclusion and economic stability.

d. Four varieties of needs and wants of man include:

• Physiological needs: Such as food, water, and air, essential for survival.
• Safety needs: Including security, shelter, and financial stability, often addressed through savings accounts in Ghanaian banks like Ecobank Ghana.
• Social needs: Like love, belonging, and relationships, which might drive wants for communication devices financed via personal loans.
• Esteem needs: Involving self-respect and recognition, leading to wants for luxury items like cars, where banks provide auto financing under regulated interest rates per BoG guidelines. These align with Maslow’s hierarchy, practically seen in how Ghanaian consumers borrow for education (esteem) post-2019 banking cleanup, emphasizing resilient banking practices