WAEC economics 2020 confirmed Answers

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Arthur james, [19.08.20 09:04]
6a)
Money is an economic unit that functions as a generally recognized medium of exchange for transactional purposes in an economy. … Money can be: market-determined, officially issued legal tender or fiat moneys, money substitutes and fiduciary media, and electronic cryptocurrencies.

(6bi)
value of money, then, is the quantity of goods in general that will be exchanged for one unit of money. The value of money is its purchasing power, i.e., the quantity of goods and services it can purchase.

(6bii)
demand for money is the desired holding of financial assets in the form of money. In othet words that is, cash or bank deposits rather than investments.

(6c)
(i)The price of the good or service.
(ii)The income of buyers.
(iii)The prices of related goods or services—either complementary and purchased along with a particular item, or substitutes and bought instead of a product.
(iv)The tastes or preferences of consumers will drive demand.

Arthur james, [19.08.20 09:15]
2. i. In order that the economy can become self reliant

ii. To encourage domestic production

iii. To encourage consumption of locally produced goods

iv. To create employment for the citizens

v. To increase the level of domestic income

vi. To conserve scarce foreign exchange

Vii. To develop the local market

viii. To prevent dumping

A budget deficit is the annual shortfall between government spending and tax revenue.

Q5. i. The IMF exists primarily to stabilize exchange rates, whiles the world bank’s goal is to reduce poverty

ii. IMF focuses on economic stability, but world bank main focus is towards economic growth

iii. IMF gives loan to only member countries while world bank can give financial aid to any one

1. Infant industries are newly established industries that are at the developing stage and need protection so that their products can effectively compete with the product of the long established international businesses.

Q9.
Problems
i. Inadequate finances

ii. inadequate agricultural extension agents

iii. lack of access to fertilizers

Solution to the problems
i. Government must provides credit facilities to farmers

ii. Government must train more extension officers

iii. Government must provides fertilizers to farmers.

Q7. i. It erodes Purchasing Power

ii. Discourages Spending and Investing

iii. Raises the Cost of Borrowing

iv. Reduces Unemployment

v. increase in the opportunity cost of holding money

v. Shortage of goods

Q6. i. Issue money.

ii. Lender of Last Resort to Commercial banks.

ii. Lender of Last Resort to Government.

iii. Target low inflation.

iv. Target growth and unemployment.
iv. Operate monetary policy/interest rates.

v. Ensure stability of the financial system

Q10. i. Barriers to entry: The larger and more expensive the barriers to entry the greater the monopoly power

ii. Number of competitors: The smaller the number of competitors in the market the greater the monopoly power
iii. Advertising: The greater the advertising spend and more recognisable the brand name the greater the monopoly power

iv. Degree of product: The larger the degree of product differentiation the greater the extent of the monopoly power differentiation

Effects of budget deficit

i.Rise in national debt

ii.Higher debt interest payments

iii. Increase in Aggregate Demand (AD)

iv. Possible increase in public sector investment

Q4. · A government budget is an annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for the forthcoming fiscal year.

6biii

Circulating capital is money being used for core operations of a company. Circulating capital includes cash, operating expenses, raw materials, inventory in process, finished goods inventory, and accounts receivable.

8a:Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. It has to be paid from the Consolidated Fund of India. The term is also used to refer to overall liabilities of central and state governments, but the Union government clearly distinguishes its debt liabilities from the states.

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