Waec Model Questions Vol1 2020 Commerce Question 2

Practice essay / theory question 2 from the 2020 Waec Model Questions Vol1 Commerce examination. This question covers International Trade, Balance of Payments, Export Tax, Import Rebate .

Waec Model Questions Vol1 2020 Commerce Essay / Theory
Topics: International Trade Balance of Payments Export Tax Import Rebate
Question 2 WAEC_MODEL_QUESTIONS_VOL1 • 2020 • COMMERCE • essay

Nigeria imports wheat and exports cocoa. In a given year the country imported 1.2 million tonnes of wheat at an average world price of $250 per tonne and exported 0.8 million tonnes of cocoa at an average world price of $2,500 per tonne. The average exchange rate during the year was ₦410 per $. The government imposes a 10 % export tax on cocoa and offers a 5 % rebate on import duties for wheat if the total value of wheat imports exceeds ₦100 million.

Question Parts

( a )
Compute the total value in Naira of wheat imports before any rebate.
( b )
Determine the rebate amount (if any) and the net value of wheat imports after the rebate.
( c )
Calculate the gross export earnings from cocoa before tax, then the net earnings after the 10 % export tax.
( d )
Based on the net export earnings and net import expenditure, compute the trade balance (exports minus imports) for the year.
( e )
Discuss two ways the government could improve the trade balance, linking your answer to the concepts of comparative advantage and value addition.

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About This Question

This is Waec Model Questions Vol1 2020 Commerce Question 2. It is one of the essay questions from the 2020 Waec Model Questions Vol1 Commerce examination.

The question covers International Trade, Balance of Payments, Export Tax, Import Rebate .

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