Neco Model Questions Vol1 2025 Economics Question 7

Practice essay / theory question 7 from the 2025 Neco Model Questions Vol1 Economics examination. This question covers National Income .

Neco Model Questions Vol1 2025 Economics Essay / Theory
Topic: National Income
Question 7 NECO_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • essay

The following macro‑economic data for Nigeria in the year 2024 are given (all values are in ₦ billions): - Wages and salaries: 2,800 - Rent: 300 - Interest: 250 - Profits: 1,150 - Indirect taxes less subsidies: 400 - Household consumption expenditure: 3,200 - Gross fixed capital formation (investment): 1,100 - Government expenditure: 800 - Exports: 500 - Imports: 600 - GDP deflator (2023): 110 - GDP deflator (2024): 121 - Population (2023): 220 million - Population (2024): 225 million Using the data above, answer the following questions:

Question Parts

( a )
Compute the Gross Domestic Product (GDP) for 2024 using the income approach.
( b )
Compute GDP for 2024 using the expenditure approach and compare the result with part (a). Explain any difference that may arise.
( c )
The GDP deflator rose from 110 in 2023 to 121 in 2024. (i) Compute the real GDP growth rate for 2024. (ii) Using the population figures, compute the real per‑capita GDP growth rate and comment on what this indicates about living standards.
( ) Compute the real GDP growth rate for 2024.
( ) Compute the real per‑capita GDP growth rate and comment on living standards.
( d )
The government plans to increase its expenditure by 15 % financed entirely by borrowing. Assuming a marginal propensity to consume (MPC) of 0.75, estimate the expected change in equilibrium GDP using the expenditure multiplier and discuss the likely impact on unemployment.

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About This Question

This is Neco Model Questions Vol1 2025 Economics Question 7. It is one of the essay questions from the 2025 Neco Model Questions Vol1 Economics examination.

The question covers National Income .

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