Waec Model Questions Vol1 2017 Commerce Question 4

Practice essay / theory question 4 from the 2017 Waec Model Questions Vol1 Commerce examination. This question covers Foreign Trade, Balance of Payments, Exchange Rate .

Waec Model Questions Vol1 2017 Commerce Essay / Theory
Topics: Foreign Trade Balance of Payments Exchange Rate
Question 4 WAEC_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • essay

Nigeria imports wheat for its flour mills and exports cocoa beans. The data for the current fiscal year are as follows: - Wheat import quantity: 200,000 tonnes - World price of wheat: $300 per tonne - Exchange rate: ₦460 per US$1 - Cocoa export quantity: 150,000 tonnes - World price of cocoa: $500 per tonne The government imposes a 5 % tariff on wheat imports and grants a 2 % rebate on cocoa export earnings. The central bank projects that the naira will depreciate by 5 % against the dollar next year. Using this information, answer the questions below.

Question Parts

( a )
Calculate the total value of wheat imports in naira before the tariff and after the 5 % tariff is applied.
( b )
Compute the total earnings from cocoa exports in naira after the 2 % export rebate is applied.
( c )
Determine the trade balance (exports minus imports) for the year after the tariff and rebate have been applied.
( d )
If the naira depreciates by 5 % next year, discuss qualitatively how this depreciation will affect the real value of wheat imports and cocoa exports, and the likely impact on the trade balance.

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About This Question

This is Waec Model Questions Vol1 2017 Commerce Question 4. It is one of the essay questions from the 2017 Waec Model Questions Vol1 Commerce examination.

The question covers Foreign Trade, Balance of Payments, Exchange Rate .

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