Neco 2017 Commerce Question 2

Practice essay / theory question 2 from the 2017 Neco Commerce examination. This question covers Trade .

Neco 2017 Commerce Essay / Theory
Topic: Trade
Question 2 NECO • 2017 • COMMERCE • essay

The table below shows Nigeria’s external trade performance for the years 2022 and 2023. | Year | Exports (₦ billions) | Imports (₦ billions) | Export Price Index* | Import Price Index* | |------|----------------------|----------------------|----------------------|----------------------| | 2022 | 2.5 | 3.2 | 110 | 115 | | 2023 | 2.8 | 3.5 | 115 | 120 | *Base year = 2020 (index = 100). In 2023 the government introduced a 5 % tariff on imported machinery. Machinery accounted for 20 % of total imports in 2022 and 25 % of total imports in 2023. Answer the following questions:

Question Parts

( a )
Calculate the trade balance for each year and comment on the trend observed between 2022 and 2023.
( b )
Determine the terms of trade (ToT) for each year, expressed as a percentage (ToT = (Export Price Index ÷ Import Price Index) × 100). Interpret the change between the two years.
( c )
Estimate the additional revenue the government earned in 2023 from the 5 % tariff on imported machinery. Assume the value of machinery imports is proportional to its share of total imports for that year.
( d )
Discuss two possible macro‑economic effects of the increased tariff revenue on the Nigerian economy.

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About This Question

This is Neco 2017 Commerce Question 2. It is one of the essay questions from the 2017 Neco Commerce examination.

The question covers Trade .

View More Neco 2017 Commerce Questions More Neco Practice Questions Back to Questions

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