2024 NECO ECONOMICS: 2024 NECO ECONOMICS ANSWERS (5740)

TABULATE

X: 20, 30, 40, 50, 60, 70

F: 10, 8, 20, 13, 6, 3

Fx: 200, 240, 800, 650, 360, 210

x-x-bar: -21, -11, -1, 4, 19, 29

(x-x-bar)²: 441, 121, 1, 81, 361, 841

F(x-x-bar)²: 4410, 968, 20, 1053, 2166, 2523

(1i)

Arithmetic mean (x-bar) = ∑fx/∑f = 2460/60 = 41

(1ii)

Variance = ∑f(x-x-bar)²= 11140/60 = 185.67

Standard deviation= √variance

= √185.67

= 13.63

(1iii)

(i) It does not give a fall range of the data

(ii) It can be hard to calculate

(iii) It only used with data where an independent variable is plotted against the frequency of it.

(2a)

%∆ in Quantity dd/ %∆ in income = 100/150

= 0.667

%∆ in Qty dd = ∆ In Qty dd/ old Qty dd * 100/1

= 10/10 * 100/1

= 100

%∆ in income = ∆ in income * 100/1

= 3000/2000 * 100/1

= 150

(2b)

Positive income elasticity: This is as a result of having more quantity demand for milk as income increases

(2c)

Luxurious goods

(2d)

(i) Change in price related commodity

(ii) Change in taste and fashion

(iii) Income of the consumer

(iv) Advertisement

(3a)

Capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country

(3b)

(i) Low level of Natural income and per capital income: The root cause of capital deficiency in under-developed countries is low level of real national and per capita income which limits to the motives of savings and investments. Due to lack of desired investments, capital formation has no increase. Hence, due to low production, there is low national and per capita income and, in turn, this forces to low capital formation.

(ii) Lack in demand of capital: Another cause of low rate of capital formation in under-developed countries in lack of demand of capital. In the words of Prof. Nurkse, “Low productivity in under-developed countries, people have low real income and, thus, purchasing power is low and so due to low demand.

(iii) Lack in supply of capital: Like demand of capital, lack of supply of capital is responsible for low capital formation. However, due to lack of necessary supply of capital in under-developed countries, the process of capital formation is not boosted up. As a result, capital formation remains at low level.

(iv) Lack of Economic and social overheads; Basic overheads like roads, buildings, communication, education, water, health etc. are generally lacked in under-developed countries which react as improper atmosphere for the capital 'copied from e x p o c o d e . n e t free' formation and slow process of capital formation.

(v) Lack of skilled entrepreneurs: Able and efficient entrepreneurs are not available in under-developed countries. It is the only reason for low rate of capital formation. Due to absence of risk-taking entrepreneurs, establishment of industries and expansion is quite limited and industrial diversification is not carried out and no balanced development of economy is possible.

(vi) Lack of effective fiscal policy: Lack of effective fiscal policy or financial policy in under-developed countries also retard capital formation to some extent. Burden of taxation is too much which is out of people’s capacity to bear as their income is quite low. Besides, inflationary circumstances accrue and prices soar extremely high.

(4a)

A wholesaler is a person whose business is buying large quantities of goods and selling them in smaller amounts

(4b)

(i)High price: Middlemen cause high price of goods by adding cost to the cost of goods

(ii) Increase in advertisement: The introduction of middlemen in the chain of distribution leads to high cost of creating awareness to the customer

(iii) Low profit: Middlemen will reduce the profit of the producer by increasing the cost of production for the producer

(iv) Decrease in production: Middlemen will lead to decrease in production of goods that will affect the price of the goods

(5)

(i) As a source of income: When agriculture is practiced in a large scale, the sale of the products after reserving the ones for consumption can fetch a lot of money to individuals and government in Nigeria.

(ii) As a source of foreign exchange earning: As the Nigerian government is working towards economic diversification, farmers should be encouraged so as to produce in large quantities for export. This will increase Nigeria's foreign exchange earning.

(iii) Provision of food: Agriculture is the main source of food supply used in feeding the teeming population of Nigeria. When there is food on the table of every Nigerian citizen, the economy will be improved.

(iv) Provision of employment: If agriculture is well funded in Nigeria, it can provide employment opportunities for more than 60 percent of the population of Nigeria.

(v) As a source of raw materials: Agriculture can be a major source of raw materials used by industries in Nigeria if well funded.

(6)

(i) Commercialization: This is the use of government owned establishment for maximization of profit.

That is, when government convert their public enterprise to an enterprise purposely meant for profit instead of rendering essential services.

(ii) Privatization: This is the transfer of the ownership of government firm to private firm. Such policy encourages competition and reduces the fiscal burden of the state by relieving it of the losses of the public enterprise and reducing the size of the bureaucracy.

(iii) Nationalization: This is the transfer of the private owned enterprise to public or government. Reasons for nationalization includes, need for large capital, to prevent exploitation, to avoid foreign dominance of the economy, etc. This policy causes monopoly.

(iv) Indigenization: This is the process of promoting industrialization through the use of indigenes and indigenous means. Also, it reduces the control of the economy from foreign economic desperado.

(v) Public corporation: This is also known as public enterprise or stationary corporation. It is a type of business organization owned, financed and controlled by the government with the sole aim of not making profit but to render essential services to the public.

(7a)

Money market is the trade in short-term debt which makes use of instrument such as shares, travelers cheque etc. WHILE Capital market is a long-term asset bought by financial institutions, professional brokers, and individual investors which makes use of investment such as stock and bonds.

(7b)

(i) They accept deposit: Commercial banks accept deposit for individuals for safe keeping.

(ii) Provides loan and advances : Another critical function of this bank is to offer loans and advances to the entrepreneurs and business people, and collect interest. For every bank, it is the primary source of making profits. In this process, a bank retains a small number of deposits as a reserve and offers (lends) the remaining amount to the borrowers in demand loans, overdraft, cash credit, short-run loans, and more such banks.

(iii) They serve as agent of payment: Commercial banks serve as agent of payment to any customer which can come in form of standing order. They serve by helping them in collecting and paying cheques, dividends, interest warrants, and bills of exchange.

(iv) Provision of financial and technical advice : Commercial banks encourage and advise businessmen on the type of projects they should invest their money in. They could advise their business customers on how best to carry out their business operations, how to raise capital for business, whether to start a new business of to expand 'copied from e x p o c o d e . n e t free' an existing one, etc By so doing, they are helping in the progress of the economy.

(v) They create money: Commercial banks create money through the primary deposits which it receives from the public in order to provide more credit to the public.

Mathematically, Money creation is;

Km × initial deposit.

Where,

Km = money multiplier OR

Money creation = Total deposit/Cash ratio.

(8a)

A monopolistic competition is a market where there are many buyers and sellers dealing on a given product but with different composition. For example, milk industry, we have peak milk, Luna, Three crown, etc.

Also, in monopolistic competition, it has to do with different monopolist dealing on a particular type of product but with different brand.

(8b)

(i) By privatization: When government owned business are been transferred to the private individuals, competition will emerge thereby reducing monopoly.

(ii) Stopping merging of firms: When the government stops the amalgamation of two or more firms to become one, it can control monopoly.

(iii) Stopping the issuance of patent right: The stoppage of issuing patent right to any individual as a result of inventing new commodities can also control monopoly. This will encourage other people to compete with the inventor thereby coming up with more of such inventions.

(iv) By provision of substitute goods: When there are many substitute goods that will compete with the goods sold by the monopolist, it can control monopoly.

(10a)

Internal trade is the act of buying and selling of goods and services within a geographical area WHILE External trade is the buying and selling of goods and services between two or more countries

(10b)

=SIMILARITIES=

(i)They both engage in exchange of goods and services

(ii) They both engage in trade e

(iii) They both involve in the use of money to facilitate trade

=DIFFERENCES=

TABULATE

>INTERNATIONAL TRADE

(i) Buying and selling is between two or more countries

(ii) There is language barrier

(iii) It involves more documentation

>EXTERNAL TRADE

(i) Buying and selling is within a country

(ii) There is no language barrier

(iii) It involves low documentation

(11)

(i) To avoid importation of harmful product: When there is an imposition of tariff, it will reduce the imposition of harmful products such as hard drugs etc.

(ii) To reduce the rate of importation: The imposition of tariff helped a country to be independent by establishing an industry that will produce it locally. Tariffs push up the prices of imported goods. So instead of having to lower prices to compete with cheap imports, domestic producers can raise prices to the inflated price level of the imports.

(iii) To create employment: Tariffs create employment within a country by encouraging local industries to grow and manufacture their own goods.

(iv) To generate revenue for the government: Tariff also helps to generate enough revenue for the government. If a country produces no oil, levying a tax on oil imports will raise money as people have no alternative put to pay the import tariff

(v) To regulate the quantity of goods and services to be imported or exported through quota system: By the use of quota system, it regulates the quantity in order to avoid over load which can lead to accident.

(11)

(i)Source of revenue: To get most income into the government purse, taxes are imposed on goods coming in from other countries.

(ii)Reduction of unemployment: This discourages importation and encourage infant industries to survive which will create jobs for more unemployment people

(iii) To improve standard living: To help the citizens of a country to be self-sufficient and self reliant

(iv)Balance of payment deficit: It helps to correct a country's balance of payment deficit in the long run

(v)Trade restriction: This enables the citizen to consume more locally made goods instead of foreign goods