Economics Answers for 2021 Waec GCE

THEORY ANSWERS

(iv) Profit Motive:
In this economy the desire to earn profit is the most important inducement for economic activity. All entrepreneurs try to start those industries or occupations in which they hope to earn the highest profit.

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(4a)
Livestock farming can be defined as the economic activity that involves raising domestic animals for human consumption and obtaining meat, milk, wool, fur, honey, among others.

(4b)
(i) It generates high-quality food products such as meat, egg, milk, cheese, etc.
(ii) It generates employment opportunities and serves as a source of income
(iii) It can help a country to generate foreign exchange earnings through the export of livestock products.

(4c)
(i) Lack of animal housing
(ii) Feed scarcity
(iii) Unavailable of water especially during the dry season

(6a)
Demand describes the buyers’ willingness
and ability to buy a certain quantity of goods at different prices.

(7a)
Inflation is defined as “A sustained rising trend in general price level or a rate of expansion of money : income greater than the rate of growth of real output.” Under such circumstances, the general prices increases, and in turn the value of money decreases. Although, the circulation of money increases, the availability of goods is limited and this results in price rise.

(7bi)
(i)Control over money supply: To check inflation, it is suggested that Government should impose strict restrictions on the issue of money by the central bank.

(ii)Control on credit: The central bank of the country should take necessary steps to contract credit because credit forms a major part of money supply. More credit means more supply of money.

(iii)Price Control:
Another method for ceasing inflation is preventing any further rise in the prices of goods and services.

(7bii)
(i)Reduction in public expenditure: Since public expenditure is an important component of aggregate demand, steps should be taken to reduce unnecessary Government expenditures on non-developmental activities.

(ii)Increase in taxes: To cut private consumption expenditure, there should be an increase in taxes. Both direct and indirect taxes can be used for this purpose.

(iii)Currency Demonetisation; One of the monetary steps is to demonetize higher-denomination currencies. Such a step is typically taken when the country has a surplus of black currency.

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(3a)
An economic system is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area.

(3b)
(i) The market economy is a market system whereby the pricing of goods and services is primarily determined by the sellers and buyers, and is hence based on demand and supply. While a command economy is an economy whereby the market system is fully controlled by the government.

(ii) The market economy is regulated by the producers and consumers and there exist minor to none government regulation, While a command economy is regulated by the government.

(iii) The objective of a free market economy is the maximization of profits. While a command economy focuses on social as well as macroeconomic objectives.

(iv) In a market economy, consumers’ preferences are taken into consideration. While the consumers’ preferences are not taken into consideration in a command economy as the government decides the item and amount of production.

(3c)
(i) Private Property and Freedom of ownership:
A capitalist economy is always having the institution of private property. An individual can accumulate property and use it according to his will. Government protects the right to property. After the death of every person his property goes to his successors.

(ii) Right of Private Property:
The most important feature of capitalism is the existence of private property and the system of inheritance. Everybody has a right to acquire private property to keep it and after his death, to pass it on to his heirs.

(iii) Price Mechanism:
This type of economy has a freely working price mechanism to guide consumers. Price mechanism means the free working of the supply and demand forces without any intervention. Producers are also helped by the price mechanism in-deciding what to produce, how much to produce, when to produce and where to produce.

8a. Natural resources are resources that exist without any actions of humankind. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value.

8b i. Renewable resources — Renewable resources can be replenished naturally. Some of these resources, like sunlight, air, wind, water, etc.
ii. Non-renewable resources – Non-renewable resources either form slowly or do not naturally form in the environment. like oil, natural gas, coal, and nuclear energy e.t.c.

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