NECO 2021 - ECONOMICS ANSWER

ECONOMICS OBJ
1-10: BDBBCECDCA
11-20: DAAEBBEDEE
21-30: CADCCEAADE
31-40: ECCBACBDAA
41-50: BDABCBBDDA
51-60: DDCDACCCDE


SECTION A
(Answer Only ONE Questions From This Section)

(1)


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(2)



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SECTION B
(Answer Only FOUR Questions From This Section)

(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 industralization 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.

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(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 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.

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(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.

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(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.