2024 NECO GCE ECONOMICS: NECO GCE Economics (Econs) Verified Ans. (8451)

(3a)

(PICK ANY ONE)

A financial institution is an organization that provides financial services, such as accepting deposits, granting loans, facilitating investments, and offering insurance and payment services. It acts as a bridge between those who have capital (savers) and those who need it (borrowers or investors), ensuring the smooth functioning of the financial system.

OR

A financial institution is an establishment that acts as an intermediary in financial transactions, helping individuals, businesses, and governments manage money. They engage in financial transactions and services, such as accepting deposits, providing loans, facilitating investments, and managing wealth.

(3b)

(PICK ANY FIVE)

(i) Issuing Currency: The central bank has the sole authority to issue the national currency, making it the legal tender of the country. This authority ensures uniformity in the currency system and prevents counterfeiting

(ii) Regulating and Supervising Banks: The central bank oversees and regulates commercial banks and other financial institutions to ensure the safety and soundness of the banking system.

(iii) Monetary Policy Implementation: The central bank controls the money supply and interest rates through monetary policy to achieve macroeconomic goals such as controlling inflation, stabilizing the currency, fostering economic growth, and reducing 'copied from e x a m p l a z a . c o m free' unemployment.

(iv) Maintaining Price Stability: One of the core objectives of a central bank is to maintain price stability by controlling inflation or deflation. 

(v) Lender of Last Resort: The central bank provides emergency funding to financial institutions facing liquidity crises to prevent the collapse of the banking system.

(vi) Managing Foreign Exchange and Reserves:

The central bank manages the country’s foreign exchange reserves and exchange rate policies.

(4a)

(PICK ANY ONE)

Capital flight refers to the large-scale outflow of financial assets or capital from a country, often due to economic instability, political uncertainty, or unfavorable investment conditions.

OR

Capital flight is the rapid movement of money and financial assets from one country to another, often to escape unfavorable economic conditions, political instability, or the risk of devaluation of the domestic currency.

(4b)

(PICK ANY FOUR)

(i) Education and Training: Education enhances knowledge and skills, while training equips individuals with specific competencies needed for job performance. 

(ii) Health and Well-being: Good health ensures individuals are physically and mentally fit to work effectively. Increasing the potential for human capital development.

(iii) Experience and Work Exposure: Practical experience gained through job exposure helps individuals develop expertise, problem-solving abilities, and efficiency in their fields.

(iv) Technology and Innovation: Access to modern technology and innovative tools helps individuals learn new skills and improve productivity, fostering better human capital.

(v) Economic Environment: A stable economy with sufficient job opportunities and investment in workforce development encourages the growth of human capital.

(vi) Government Policies: 'copied from e x a m p l a z a . c o m free' Policies on education, healthcare, employment, and labor rights significantly impact human capital.

(5)

(PICK ANY FIVE)

(i) Inadequate Power Supply: The erratic and insufficient power supply in Nigeria remains a significant obstacle to industrial growth. Manufacturing industries often operate below capacity due to frequent blackouts and power fluctuations. To mitigate this, they depend heavily on diesel-powered generators, which significantly increase production costs

(ii) Poor Infrastructure: Nigeria’s inadequate and poorly maintained infrastructure creates significant logistical challenges for manufacturers. Bad roads increase transportation costs and lead to delays in the movement of raw materials and finished goods. Inefficient rail systems limit the bulk transportation of goods, while congested and poorly managed ports slow down import/export processes. 

(iii) Access to Finance:

Manufacturing industries struggle to obtain affordable financing due to high-interest rates charged by commercial banks and stringent lending criteria. Small and medium-sized manufacturers are particularly affected, as they often lack the collateral or credit history required to secure loans.

(iv) Foreign Exchange Challenges:

Nigeria’s reliance on imports for raw materials, machinery, and spare parts is heavily affected by the volatility of the Naira and limited access to foreign exchange. Fluctuating exchange rates and high costs of sourcing foreign currency make procurement unpredictable and 'copied from e x a m p l a z a . c o m free' expensive. This not only reduces profit margins but also discourages long-term investment in the manufacturing sector.

(v) Inconsistent Government Policies: Frequent changes in government policies, such as sudden bans on imports or exports, revisions to tariffs, and fluctuating tax regulations, create uncertainty for manufacturers. This unpredictability discourages investment and forces businesses to operate in a reactive rather than strategic manner. 

(vi) Insecurity: The high level of insecurity in Nigeria, including terrorism, kidnappings, armed robbery, and communal clashes, disrupts manufacturing operations. Supply chains are often interrupted as goods and raw materials cannot be transported safely. Some businesses relocate or shut down entirely due to the risk of attacks, especially in areas heavily affected by insecurity, further limiting industrial growth.

(vii) Skilled Labor Shortage:

Despite Nigeria’s large population, many manufacturing industries face a shortage of skilled workers capable of operating modern machinery and technologies. Many workers lack technical training and expertise to operate advanced equipment or implement innovative processes. This shortage forces manufacturers to either spend heavily on training programs or rely on expatriates, both of which increase operational costs.

(6a)

(PICK ANY ONE)

A merchant bank is a financial institution that specializes in providing banking services to businesses, corporations, and high-net-worth individuals. They act as intermediaries between companies seeking funds and investors looking for opportunities

OR

A merchant bank is a type of financial institution that primarily focuses on providing financial services, capital, and advisory services to businesses and governments. They specialize in areas such as equity and debt financing, private equity investments, and project financing.

(6b)

(PICK ANY FIVE)

(i) Regulation of the Securities Market: The SEC ensures that securities markets operate in a fair, efficient, and transparent manner, protecting investors from fraud and malpractice.

(ii) Registration of Securities: The SEC reviews and approves securities for public issuance to ensure compliance with regulatory requirements before they are offered to investors.

(iii) Licensing of Market Operators: It licenses and monitors the activities of stock exchanges, brokers, dealers, and other participants in the securities market to maintain standards.

(iv) Investor Protection: The SEC protects investors by enforcing laws against fraud, ensuring that companies disclose accurate and reliable financial information.

(v) Promotion of Market Integrity: The SEC promotes 'copied from e x a m p l a z a . c o m free' transparency and accountability in the securities market by setting rules to prevent insider trading, market manipulation, and other unethical practices.

(vi) Supervision of Mergers and Acquisitions: The SEC regulates mergers, acquisitions, and other corporate restructuring to ensure they are fair to investors and comply with legal requirements.

(vii) Education and Awareness: The SEC educates the public about the securities market, risks, and benefits of investing, encouraging informed decision-making among investors.

(7)

(i) Internal trade: This is also known as domestic trade, refers to the buying and selling of goods and services within the borders of a country. It involves the exchange of goods and services between different regions, cities, or towns within a country.

(ii) Inflation: This refers to a sustained increase in the general price level of goods and services in an economy over a period of time. It is a monetary phenomenon where the value of money decreases, and the purchasing power of consumers is reduced.

(iii) An inflationary gap: This occurs when aggregate demand exceeds the available supply of goods and services in an economy, resulting in upward pressure on prices and inflation. This happens when the economy is producing beyond its full employment level, causing demand to outstrip supply.

(iv) A deficit balance of payment: This occurs when a country's total payments to other countries exceed its total receipts from other countries, resulting in a net outflow of foreign exchange. This means that the country is importing more goods and services than it is exporting, and/or its residents are investing more abroad than foreigners are investing in the country.

(v) Monetary policy: This refers to the actions taken by a country's central bank to control the money supply, interest rates, and inflation, in order to promote economic growth, stability, and full employment.

(8)

(i) Scarcity: Economics is based on the concept of scarcity, which means that the needs and wants of individuals are unlimited, but the resources available to satisfy those needs and wants are limited.

(ii) Opportunity Cost: The opportunity cost of a choice is the value of the next best alternative that is given up. Opportunity cost is a fundamental concept in economics because it helps individuals and societies make decisions about how to allocate their resources.

(iii) Supply and Demand: The price and quantity of a good or service are determined by the interaction of supply and demand. The supply of a good or service is the amount that producers are willing and able to produce at a given price level. The demand for a good or service is the amount that consumers are willing and able to buy at a given price level.

(iv) Law of Diminishing Marginal Utility: The law of diminishing marginal utility states that as an individual consumes more units of a good or service, the marginal utility or satisfaction derived from each additional unit decreases.

(v) Law of Diminishing Returns: The law of diminishing returns states that as the quantity of a variable input (such as labor or capital) is increased, while holding other inputs constant, the marginal output of the good or service will eventually decrease.

(9a)

(PICK ANY ONE)

A retailer is a business or individual that purchases goods in bulk from manufacturers or wholesalers and sells them directly to the final consumers in smaller quantities. Retailers serve as the last link in the supply chain, ensuring that products are accessible to customers in convenient locations.

OR

A retailer is a business or individual that sells goods or services directly to consumers for personal or household use, usually in small quantities. They operate through various channels, such as physical stores, online platforms, or a combination of both, and aim to meet the needs and preferences of consumers by offering a wide range of products.

(9b)

(PICK ANY FOUR)

(i) Buying and Assembling: Wholesalers purchase goods in large quantities from manufacturers and assemble them in their warehouses. This function involves selecting the right products, negotiating prices, and ensuring timely delivery.

(ii) Storage and Warehousing: Wholesalers store the goods in their warehouses, ensuring their safety and security. This function involves managing inventory, controlling stock levels, and maintaining warehouse facilities.

(iii) Breaking Bulk: Wholesalers break down the bulk quantities of goods into smaller lots, making it easier for retailers to purchase and sell. This function involves repackaging goods, labeling, and preparing them for 'copied from e x a m p l a z a . c o m free' distribution.

(iv) Transportation: Wholesalers often provide transportation services, delivering goods to retailers. This function involves managing logistics, coordinating with transportation providers, and ensuring timely delivery.

(v) Financing: Wholesalers may offer financing options to retailers, allowing them to purchase goods on credit. This function involves evaluating creditworthiness, setting credit limits, and managing accounts receivable.

(vi) Risk Bearing: Wholesalers bear the risk of damage, spoilage, or obsolescence of goods while they are in storage. This function involves managing inventory risks, insuring goods, and mitigating potential losses.

(vii) Grading and Packaging: Wholesalers may grade and package goods according to the requirements of retailers. This function involves sorting, grading, and packaging goods to meet specific standards or specifications.

(viii) Providing Market Information: Wholesalers provide retailers with market information, such as demand trends and competitor activity. This function involves gathering and analyzing market data, identifying trends, and sharing insights with retailers.

(ix) Offering Sales Promotion: Wholesalers may offer sales promotions, such as discounts and loyalty programs, to retailers. This function involves developing promotional strategies, creating marketing materials, and implementing 'copied from e x a m p l a z a . c o m free' campaigns.

(x) Providing After-Sales Support: Wholesalers may provide after-sales support to retailers, such as warranty services and repair. This function involves managing warranty claims, providing repair services, and ensuring customer satisfaction.

(10a)

Plantation farming is a type of agricultural practice where a large area of land is dedicated to the cultivation of a single crop, usually for commercial purposes. This type of farming is often characterized by Large-scale land holding, Monoculture (single crop), High capital investment, Specialized labor, Mechanized farming techniques, Focus on export markets.

  In the other hand, Subsistence farming is a type of agricultural practice where a small area of land is used to grow a variety of crops, mainly for the consumption of the farmer's family. This type of farming is often characterized by Small-scale land holding, Polyculture (multiple crops), Low capital investment, family labour, traditional farming techniques, focus on local consumption.

(10b)

(PICK ANY FIVE)

(i) Employment Opportunities: Agriculture has been a major source of employment in Nigeria, providing jobs for millions of people, especially in rural areas.

(ii) Food Security: Agriculture has played a crucial role in ensuring food security in Nigeria, providing the country with a significant portion of its food needs.

(iii) Foreign Exchange Earnings: Prior to the discovery of oil, agriculture was the mainstay of Nigeria's economy, generating a significant portion of the country's foreign exchange earnings.

(iv) Revenue Generation: Agriculture has been an important source of revenue for the Nigerian 'copied from e x a m p l a z a . c o m free' government, generating revenue through taxes, levies, and other agricultural-related activities.

(v) Poverty Reduction: Agriculture has played a significant role in reducing poverty in Nigeria, providing a means of livelihood for millions of people, especially in rural areas.

(vi) Industrial Development: Agriculture has contributed to the development of industries in Nigeria, providing raw materials for agro-based industries such as textile, food processing, and beverages.

(vii) GDP Contribution: Agriculture has consistently contributed a significant portion of Nigeria's Gross Domestic Product (GDP), making it a crucial sector of the economy.

(viii) Rural Development:

Agriculture has played a significant role in the development of rural areas in Nigeria, providing infrastructure, social amenities, and employment opportunities.

(11)

(PICK ANY FIVE)

(i) Employment Generation: The service industry creates numerous job opportunities in sectors such as banking, education, healthcare, transportation, and telecommunications, reducing unemployment rates and improving livelihoods. Many entry-level and professional roles in this sector also contribute to addressing youth unemployment, which is a significant challenge in Nigeria.

(ii) Revenue Generation: It contributes to government revenue through taxes, levies, and other financial obligations paid by service-based businesses, boosting national income. These contributions boost government finances, enabling public investment in critical areas like infrastructure, education, and healthcare.

(iii) Economic Diversification: The service industry supports diversification by reducing over-dependence on oil and fostering growth in non-oil sectors like tourism, ICT, and entertainment. This diversification reduces vulnerability to oil price fluctuations and creates a more balanced and resilient economy.

(iv) Infrastructure Development: As the service industry expands, it drives the development of infrastructure to support its activities. For example, telecommunications companies invest in broadband infrastructure, while growth in banking and e-commerce leads to improved digital payment systems.

(v) Attraction of Foreign Investment:

The development of service sectors 'copied from e x a m p l a z a . c o m free' such as banking, ICT, and tourism attracts foreign direct investment, which brings in capital, technology, and expertise. Foreign investment brings in capital, advanced technologies, and expertise, fostering economic growth and innovation.

(vi) Enhancement of Trade and Commerce: Efficient logistics and transportation systems enable the smooth movement of goods domestically and internationally, while banking and insurance services reduce financial risks for businesses. This creates a conducive environment for economic growth by supporting business operations and expanding trade networks.

(vii) Skill Development and Innovation: The service industry fosters skill acquisition and innovation by investing in training programs and technology, improving the quality of the workforce and driving economic advancement. It fosters innovation by encouraging the adoption of cutting-edge technologies and creative solutions to meet market demands.

(12a) 

(PICK ANY ONE)

A census is the official count and collection of detailed information about individuals, of a country's population, conducted at specific intervals to aid in planning and resource allocation by the government.

OR

A census is a systematic process of collecting, analyzing, and recording information about the members of a population, usually to determine the size, structure, and distribution of the population within a specific area.

(12b)

(PICK ANY FIVE)

(i) Resource Allocation:

A census helps the government determine the population distribution across regions, enabling equitable allocation of resources such as schools, hospitals, and infrastructure.

(ii) Policy and Planning: Census data provides accurate population statistics that guide the formulation and implementation of effective policies and development plans. 

(iii) Representation in Governance: Population data is used to determine the number of representatives each region should have in legislative bodies, ensuring fair representation.

(iv) Economic Planning: It aids in understanding the workforce size, employment rates, and economic activities, which are crucial for planning industrial growth, job creation, and economic policies.

(v) Revenue Distribution: Census figures are used to determine how federal or state governments distribute 'copied from e x a m p l a z a . c o m free' revenue to local governments or regions.

(vi) Public Service Delivery: By knowing the number and characteristics of people in a given area, the government can efficiently plan services like education, health care, and transportation.

(vii) Monitoring Demographic Changes: A census tracks changes in population growth, migration patterns, age distribution, and other demographic trends, helping the government address emerging challenges such as aging populations or urbanization.