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waecE-LEARNING
Economics Paper 2, Nov/Dec. 2014  
Questions: 1 2 3 4 5 6 7 8 Main
General Comments
Weakness/Remedies
Strength
Question 1

 

The data below is the National Income Statistics of a country in the year 2005. (All figures are in millions of $). Use the information in the table to answer the questions that follow:


S/N

                    Items

Amount  $ (m)

1.

Manufacturing

      840.00

2.

Mining

      420.00

3.

Agriculture

      350.00

4.

Construction

      200.00

5.

Commerce

      100.00

6.

Utilities

      150.00

7.

Transport, Storage, and other Services

      300.00

8.

Net Factor Income from abroad

      180.00

9.

Depreciation

       90.00

10.

Subsidies

      100.00

11.

Indirect taxes

        80.00

(a)   Compute the following:
(i)          Gross domestic product at market prices;
(ii)         Gross national product at market prices;
(iii)        Net national product at market prices;
(iv)        Net national product at factor cost.
(b)   Given the total population of the country as 50,000.
        What is the per capita income in the year 2005?
(c)   Identify any four problems associated with this method of measuring national income.

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Observation

 

       

                                                           
                                                           

       

                                                           
This question attracted few candidates who performed below average. The question required the candidates to compute GDP, GNP, NNP at market prices, NNP at factor cost in the (a) part, per capita income in the (b) part and to identify any four problems associated with method of measuring national income in the (c) part. Most of the candidates could not identify the items in the table meant to be computed under concepts (i) – (iv).This prevented them from obtaining the maximum mark.
The candidates were expected to provide the following answers to score higher marks.

a)         Manufacturing………………………………………….       840.00
            Mining………………………………………………….        420.00
            Agriculture……………………………………………..        350.00
            Construction……………………………………………       200.00
            Commerce………………………………………………       100.00
            Utilities…………………………………………………       150.00
            Transport and storage services………………………….       300.00
  (i)       Gross Domestic Product at market price……………….   $ 2,360.00 m

 

  (ii)      GNP at market prices  =   GDP + Net factor income from abroad
                                                =  $ 2,360m + $ 180m                                    
 =  $2,540.00m                                          
                                                                                                                          
  (iii)     NNP at market prices   =   GNP – Depreciation
                                                 =   $2,540m -  $90 m     
 =  $2,450.00m               

  (iv)     NNP at factor cost      =   NNPmp + Subsidies – Indirect Taxes
            =    $ 2,450m + $ 100m – $ 80m   
            =    $ 2,470.00m                                 

(b)        Per Capita Income      =     Net National Product (fc)    
                                                        Total Population

                                                OR      National Income
                                                            Population

            NNP at factor cost      =     $ 2,470.00m  
                                                            50,000
                                                =     $49,400.         

 (c)       Problems of the Product approach

  1. Problem of double - counting.
  2. Subsistence production.
  3. Domestic activities.
  4. Effects of inflation /changes in inventory.
  5. Difficulty in estimating depreciation.
  6. Inaccurate statistical data.
  7. Illegal/underground activities.

 

 

 

                               
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