Neco Model Questions Vol1 2019 Economics Question 31
Practice objective / multiple choice question 31 from the 2019 Neco Model Questions Vol1 Economics examination.
A country imports a good whose world price is \(120\) ₦ per unit and exports a good whose world price is \(80\) ₦ per unit. The nominal exchange rate is \(1\) USD = \(400\) ₦. The government imposes a \(10\%\) tariff on imports and a \(5\%\) export subsidy. Calculate the new terms of trade (export‑price index ÷ import‑price index) after the policy and state whether the real income per unit of export improves compared with the situation before the policy.
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About This Question
This is Neco Model Questions Vol1 2019 Economics Question 31. It is one of the objective questions from the 2019 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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