Neco 2020 Economics Question 8
Practice objective / multiple choice question 8 from the 2020 Neco Economics examination.
Initially, Country Y exports coffee at \(\$5\) per kg and imports wheat at \(\$2\) per kg. It exports 200,000 kg of coffee and imports 300,000 kg of wheat. The government then imposes a 25 % tariff on wheat imports and gives a 10 % subsidy on coffee exports (applied to the export price). Compute (a) the new trade balance (in dollars) and (b) the percentage change in the terms of trade (export price index divided by import price index). Express the percentage change to the nearest whole percent.
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About This Question
This is Neco 2020 Economics Question 8. It is one of the objective questions from the 2020 Neco Economics examination.
Difficulty level: Hard .
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