Neco Model Questions Vol1 2017 Economics Question 33
Practice objective / multiple choice question 33 from the 2017 Neco Model Questions Vol1 Economics examination.
In year 1, Country X's export price index for coffee is 120 and its import price index for wheat is 100. In year 2 the coffee index rises to 150 and the wheat index to 110. The country exports 500 tons of coffee and imports 800 tons of wheat each year. The exchange rate is ₦5 per foreign currency unit in year 1 and ₦4.5 in year 2. If the base price of coffee in year 1 is ₦10,000 per ton, calculate (i) the percentage change in the terms of trade (export index divided by import index) from year 1 to year 2, expressed to one decimal place, and (ii) the change in foreign‑exchange earnings from coffee exports, expressed in naira and rounded to the nearest thousand.
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This is Neco Model Questions Vol1 2017 Economics Question 33. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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