Neco Model Questions Vol1 2022 Economics Question 24
Practice objective / multiple choice question 24 from the 2022 Neco Model Questions Vol1 Economics examination.
At the start of 2022, a government's annual budget (in billions of naira) is as follows: Tax revenue 150, non‑tax revenue 30, grants 20; current spending 180, capital investment 40, interest payments 15. The country's GDP is 800. The government plans to increase tax revenue by 10 % and cut current spending by 5 % while keeping all other items unchanged. (i) What is the new primary deficit (or surplus) after the changes? (ii) Assuming the initial public debt is 200 billion and that the total deficit adds to debt, what will be the debt‑to‑GDP ratio after one year? Give the ratio as a percentage to one decimal place.
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About This Question
This is Neco Model Questions Vol1 2022 Economics Question 24. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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