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WAEC May/June 2025 FREE ECONS ANSWER ROOM [School Candidates]
Wednesday, 4th June 2025
Economics 2(Essay) – 9:30am – 11:30am
Economics 1(Objective) – 11:30 am – 12:30pm
Wednesday, 4th June 2025
Economics 2(Essay) – 9:30am – 11:30am
Economics 1(Objective) – 11:30 am – 12:30pm
2025 WAEC ECONOMICS OBJECTIVES (OBJ) ANSWERS:
1.If governments in developing countries want to raise revenue, the major source is:
✅ A. Indirect taxes
2. A firm can increase production in the short-run by:
✅ C. Buying more raw materials
3. A factor that positively influences the precautionary motive for holding money is:
✅ A. High degree of uncertainty
4. Diversification of developing economies enables them to:
✅ C. Offer more than one product from various sectors for export
5. The monopolist’s price is always:
✅ A. Higher than marginal revenue
6. Inflation will usually have a negative effect on:
✅ C. Balance of payments
7. Commodities with negative income elasticities of demand are:
✅ D. Inferior goods
8. The curve labelled Z in a cost/revenue diagram is:
✅ D. Average cost curve
9. Equilibrium output level is at:
✅ B. S
10. The interval between curves Y and Z represents:
✅ C. Average fixed cost
11. One advantage of a free market economy is that it:
✅ C. Gives incentives for innovation
12. Which is true of a debenture?
✅ C. Its holders are creditors to the company
13. Which of the following is NOT a benefit of economic integration?
✅ A. Complete independence of each nation
14. In which section of the BOP is long-term investment recorded?
✅ B. Capital account section
15. A rational consumer of a normal good will do all EXCEPT:
✅ A. Buy more at a higher price
16. OPEC prevents excess supply of crude oil by:
✅ C. Fixing production quotas for all member countries
17. Capital intensive production method is least adopted in:
✅ D. Peasant farming
18. Tax avoidance best refers to:
✅ B. Legally exploiting tax loopholes
19. Which is NOT an asset to commercial banks?
✅ D. Shareholders' funds
20. If 5 bags of rice are given up to produce maize, it means:
✅ D. Rice has greater opportunity cost than maize
21. The demand for matches by a rich consumer is most likely:
✅ B. Price inelastic
22. A typist laid off for being digitally illiterate faces:
✅ B. Structural unemployment
23. A flat tax rate of 10% per unit is an example of:
✅ D. Specific tax
24. If price > marginal utility, the consumer will:
✅ C. Consume less to increase marginal utility
25. Contraction in money supply will:
✅ A. Cause the value of money to rise
26. Good X with elasticity of 0.25 means:
✅ A. Has few substitutes
27. In a command economy, wages are determined by:
✅ B. Central planning committee
28. Which tax system is progressive?
✅ C. T
29. Larger & more efficient production plant leads to:
✅ B. Technical economies
30. A long-term BOP deficit can be corrected by:
✅ D. Reducing or removing export duties
31. Industry with weight loss in output should be near:
✅ C. Source of raw materials
32. Which is NOT a determinant of price elasticity of supply?
✅ B. Consumer's income level
33. In a deficit budget, expected revenue is:
✅ C. Lower than proposed expenditure
34. Demand curve of a necessary good with no substitute is:
✅ C. Negatively sloped
35. A business is a separate legal person if:
✅ A. Recognized as a corporate entity
36. At point where marginal utility is negative, total utility:
✅ A. Decreases
37. Refusing a job due to family ties is:
✅ D. Geographical mobility of labour
38. Rightward shift in cocoa supply curve implies:
✅ C. Subsidy on farm equipment increased
39. National income is limited as living standard measure because:
✅ B. Real composition of output not fully known
40. Choice is necessary in economics because:
✅ B. Resources are inadequate
41. Which is NOT a form of money?
✅ B. Promissory notes
42. If supply increases in perfect elastic demand, result is:
✅ A. Increase in equilibrium quantity while price stays fixed
43. One feature of land is that:
✅ A. Total surface cannot be changed
44. The diagram in Figure 2 is called:
✅ B. Component bar chart
45. If minimum AVC > average revenue, the firm must:
✅ B. Shut down completely
46. An increase in input price causes:
✅ D. Supply of goods to decrease
47. Increase in variable factor causes:
✅ D. Marginal product declines continuously
48. If cassava price is fixed above equilibrium:
✅ A. Reduce cassava supplied
49. Dumping goods is undesirable because it:
✅ C. Causes unemployment in the importing country
50. National income may be overstated if it includes:
✅ D. Wages of housekeepers
✅ A. Indirect taxes
2. A firm can increase production in the short-run by:
✅ C. Buying more raw materials
3. A factor that positively influences the precautionary motive for holding money is:
✅ A. High degree of uncertainty
4. Diversification of developing economies enables them to:
✅ C. Offer more than one product from various sectors for export
5. The monopolist’s price is always:
✅ A. Higher than marginal revenue
6. Inflation will usually have a negative effect on:
✅ C. Balance of payments
7. Commodities with negative income elasticities of demand are:
✅ D. Inferior goods
8. The curve labelled Z in a cost/revenue diagram is:
✅ D. Average cost curve
9. Equilibrium output level is at:
✅ B. S
10. The interval between curves Y and Z represents:
✅ C. Average fixed cost
11. One advantage of a free market economy is that it:
✅ C. Gives incentives for innovation
12. Which is true of a debenture?
✅ C. Its holders are creditors to the company
13. Which of the following is NOT a benefit of economic integration?
✅ A. Complete independence of each nation
14. In which section of the BOP is long-term investment recorded?
✅ B. Capital account section
15. A rational consumer of a normal good will do all EXCEPT:
✅ A. Buy more at a higher price
16. OPEC prevents excess supply of crude oil by:
✅ C. Fixing production quotas for all member countries
17. Capital intensive production method is least adopted in:
✅ D. Peasant farming
18. Tax avoidance best refers to:
✅ B. Legally exploiting tax loopholes
19. Which is NOT an asset to commercial banks?
✅ D. Shareholders' funds
20. If 5 bags of rice are given up to produce maize, it means:
✅ D. Rice has greater opportunity cost than maize
21. The demand for matches by a rich consumer is most likely:
✅ B. Price inelastic
22. A typist laid off for being digitally illiterate faces:
✅ B. Structural unemployment
23. A flat tax rate of 10% per unit is an example of:
✅ D. Specific tax
24. If price > marginal utility, the consumer will:
✅ C. Consume less to increase marginal utility
25. Contraction in money supply will:
✅ A. Cause the value of money to rise
26. Good X with elasticity of 0.25 means:
✅ A. Has few substitutes
27. In a command economy, wages are determined by:
✅ B. Central planning committee
28. Which tax system is progressive?
✅ C. T
29. Larger & more efficient production plant leads to:
✅ B. Technical economies
30. A long-term BOP deficit can be corrected by:
✅ D. Reducing or removing export duties
31. Industry with weight loss in output should be near:
✅ C. Source of raw materials
32. Which is NOT a determinant of price elasticity of supply?
✅ B. Consumer's income level
33. In a deficit budget, expected revenue is:
✅ C. Lower than proposed expenditure
34. Demand curve of a necessary good with no substitute is:
✅ C. Negatively sloped
35. A business is a separate legal person if:
✅ A. Recognized as a corporate entity
36. At point where marginal utility is negative, total utility:
✅ A. Decreases
37. Refusing a job due to family ties is:
✅ D. Geographical mobility of labour
38. Rightward shift in cocoa supply curve implies:
✅ C. Subsidy on farm equipment increased
39. National income is limited as living standard measure because:
✅ B. Real composition of output not fully known
40. Choice is necessary in economics because:
✅ B. Resources are inadequate
41. Which is NOT a form of money?
✅ B. Promissory notes
42. If supply increases in perfect elastic demand, result is:
✅ A. Increase in equilibrium quantity while price stays fixed
43. One feature of land is that:
✅ A. Total surface cannot be changed
44. The diagram in Figure 2 is called:
✅ B. Component bar chart
45. If minimum AVC > average revenue, the firm must:
✅ B. Shut down completely
46. An increase in input price causes:
✅ D. Supply of goods to decrease
47. Increase in variable factor causes:
✅ D. Marginal product declines continuously
48. If cassava price is fixed above equilibrium:
✅ A. Reduce cassava supplied
49. Dumping goods is undesirable because it:
✅ C. Causes unemployment in the importing country
50. National income may be overstated if it includes:
✅ D. Wages of housekeepers
2025 WAEC ECONOMICS ESSAY OR THEORY ANSWERS:
Minimum price control is a government policy in which a legally set price floor is established above the market equilibrium price to ensure that producers receive a guaranteed minimum income for their goods.
OR
Minimum price control is a price regulation measure whereby the government fixes a minimum price that must be paid for certain goods, especially agricultural products, in order to protect farmers from very low market prices.
(4b)
(PICK ANY THREE)
(i) To protect farmers’ income: Minimum prices ensure that farmers receive fair compensation for their produce, even during periods of market price collapse, thereby improving their standard of living.
(ii) To encourage agricultural production: By guaranteeing a stable income, farmers are motivated to increase production and invest in modern farming techniques, which enhances food security.
(iii) To prevent exploitation by middlemen: Minimum prices shield farmers from being underpaid by marketers or intermediaries who may take advantage of their lack of bargaining power.
(iv) To stabilize market prices: It helps to reduce price volatility in the agricultural sector, ensuring that food prices remain relatively stable for both producers and consumers.
(v) To promote rural development: With guaranteed minimum income, farmers are likely to spend more within their communities, which helps to stimulate rural economies and reduce rural-urban migration.
(vi) To ensure national food security: When farmers are supported with minimum prices, they are more consistent in food production, ensuring that the country has a steady supply of essential food items.
(4c)
(PICK ANY THREE)
(i) Surplus production: Minimum prices may lead farmers to produce more than the market needs, resulting in excess supply that the government may struggle to purchase or store.
(ii) Waste of resources: If the surplus cannot be absorbed, much of it may go to waste, leading to a misuse of land, labor, and capital used in production.
(iii) High government expenditure: The government may be forced to buy up the surplus at the guaranteed price, placing a financial burden on the treasury and increasing public spending.
(iv) Encouragement of inefficiency: Farmers may rely on government support rather than improving productivity, leading to laziness and inefficiency in the agricultural sector.
(v) Distortion of market forces: Minimum price controls interfere with the natural demand and supply system, leading to artificial pricing and misallocation of resources.
(vi) Storage and preservation challenges: Managing large volumes of surplus produce can strain existing storage facilities and lead to spoilage, especially in the absence of proper preservation methods.
(5a)
(PICK ANY ONE)
Production cost refers to the total expense incurred by a business to manufacture a product or provide a service. It includes all the direct and indirect costs involved in the production process
OR
Production cost is the total amount of money a company spends to produce a specific quantity of goods or services. It includes both direct costs (like raw materials and wages for workers directly involved in production) and indirect costs (such as factory rent, equipment maintenance, and utility bills).
(5b)
Real cost refers to the total effort, sacrifice, and resources (like labor, time, and capital) used in the production of goods and services. It is theoretical and not recorded in financial accounts.
In the other hand, Explicit cost refers to actual monetary payments made by a firm for inputs such as wages, rent, and materials. These are recorded in the firm's accounting books.
(5c)
A fixed input is a factor of production that remains constant in the short run, regardless of the level of output. It does not change as production increases or decreases. Fixed inputs are usually long-term assets that cannot be quickly adjusted.
Example:
(PICK ONE)
-The factory building (It remain the same even if output increases)
-Machinery used in production (It remain the same even if output increases)
Variable input is a factor of production that changes with the level of output. It can be increased or decreased easily as production needs change.
Example:
(PICK ANY ONE)
-Raw materials (More materials are needed as more goods are produced)
-The number of workers (More labor is needed as more goods are produced)
(5d)
(PICK ANY FOUR)
(i) Fixed Cost (FC): Costs that do not change with the level of output, such as rent and salaries of permanent staff.
(ii) Variable Cost (VC): Costs that change with the level of output, like raw materials and wages of casual workers.
(iii) Total Cost (TC): The sum of fixed and variable costs at any level of output. TC = FC + VC
(iv) Average Fixed Cost (AFC): Fixed cost per unit of output. AFC = FC ÷ Quantity of Output
(v) Average Variable Cost (AVC): Variable cost per unit of output. AVC = VC ÷ Quantity of Output
(vi) Marginal Cost (MC): The additional cost of producing one more unit of output. MC = Change in TC ÷ Change in Output.
(PICK ANY ONE)
Production cost refers to the total expense incurred by a business to manufacture a product or provide a service. It includes all the direct and indirect costs involved in the production process
OR
Production cost is the total amount of money a company spends to produce a specific quantity of goods or services. It includes both direct costs (like raw materials and wages for workers directly involved in production) and indirect costs (such as factory rent, equipment maintenance, and utility bills).
(5b)
Real cost refers to the total effort, sacrifice, and resources (like labor, time, and capital) used in the production of goods and services. It is theoretical and not recorded in financial accounts.
In the other hand, Explicit cost refers to actual monetary payments made by a firm for inputs such as wages, rent, and materials. These are recorded in the firm's accounting books.
(5c)
A fixed input is a factor of production that remains constant in the short run, regardless of the level of output. It does not change as production increases or decreases. Fixed inputs are usually long-term assets that cannot be quickly adjusted.
Example:
(PICK ONE)
-The factory building (It remain the same even if output increases)
-Machinery used in production (It remain the same even if output increases)
Variable input is a factor of production that changes with the level of output. It can be increased or decreased easily as production needs change.
Example:
(PICK ANY ONE)
-Raw materials (More materials are needed as more goods are produced)
-The number of workers (More labor is needed as more goods are produced)
(5d)
(PICK ANY FOUR)
(i) Fixed Cost (FC): Costs that do not change with the level of output, such as rent and salaries of permanent staff.
(ii) Variable Cost (VC): Costs that change with the level of output, like raw materials and wages of casual workers.
(iii) Total Cost (TC): The sum of fixed and variable costs at any level of output. TC = FC + VC
(iv) Average Fixed Cost (AFC): Fixed cost per unit of output. AFC = FC ÷ Quantity of Output
(v) Average Variable Cost (AVC): Variable cost per unit of output. AVC = VC ÷ Quantity of Output
(vi) Marginal Cost (MC): The additional cost of producing one more unit of output. MC = Change in TC ÷ Change in Output.
(7a)
(PICK ANY THREE)
(i) Treasury Bills: These are short-term debt instruments issued by the government to raise funds for a period usually not exceeding 364 days. They are considered safe and highly liquid.
(ii) Commercial Papers: These are unsecured, short-term promissory notes issued by large and financially strong companies to meet short-term financial obligations.
(iii) Bankers’ Acceptances : These are short-term credit instruments guaranteed by a bank, commonly used in international trade transactions.
(iv) Call Money : This refers to short-term funds lent by financial institutions to one another for very short durations, usually overnight or a few days.
(v) Certificates of Deposit (CDs): These are time deposits issued by commercial banks with a fixed maturity date and specified interest rate, which are tradeable in the money market.
(7bi)
(PICK ANY ONE)
Money Market:
A manufacturer who urgently needs ₦5 million to purchase raw materials for production while waiting for payment from debtors can approach the money market to obtain a short-term loan or issue commercial papers. This is because the money market is ideal for meeting temporary financial needs and ensuring the business continues running smoothly without interruptions.
OR
Money Market:
When a manufacturer receives a large order from a customer and needs ₦10 million to buy raw materials immediately, but expects payment only after delivery, they may approach the money market to raise short-term funds through instruments like treasury bills or call money. This is because the money market helps businesses meet urgent, short-term financing needs without waiting for delayed payments.
OR
Money Market:
If a manufacturer is waiting for payment from clients but needs ₦7 million to pay workers and settle electricity bills to keep production going, they may obtain a short-term loan from the money market using a commercial paper. This is because the money market is suitable for solving such temporary cash flow problems that occur during the course of daily operations.
(7bii)
(PICK ANY ONE)
Capital Market :
If a manufacturer plans to expand operations by building a new factory and needs ₦200 million to fund the project, they can raise the required capital by issuing shares or debentures in the capital market. The capital market is appropriate in this case because it provides long-term financing for fixed investments that generate returns over an extended period.
OR
Capital Market :
Suppose a manufacturing company wants to invest ₦500 million in purchasing advanced automated machines to improve long-term productivity. They can source this fund by issuing shares or bonds in the capital market, which is designed for raising long-term capital needed for such capital-intensive and growth-oriented projects.
OR
Capital Market:
A manufacturer who intends to set up a new production line that will take several years to complete and cost over ₦300 million may raise funds by selling shares to investors through the capital market. This is appropriate because the capital market provides long-term finance needed for such extensive development projects that cannot be funded from short-term earnings.
(7c)
(PICK ANY THREE)
(i) Provision of long-term capital: Development banks provide medium- and long-term loans to industries, agriculture, and infrastructure projects, which commercial banks often avoid due to high risk and long repayment periods.
(ii) Promotion of industrial development: They finance the establishment, expansion, and modernization of industries, especially in sectors considered vital for national development but unattractive to private investors.
(iii) Financing infrastructure projects: Development banks invest in large-scale infrastructure projects such as roads, electricity, water supply, and telecommunications, which are essential for economic growth but require massive capital.
(iv) Support for small and medium enterprises(SMEs): They provide funding and technical assistance to small-scale businesses and entrepreneurs to stimulate employment and reduce poverty.
(v) Provision of advisory services: Development banks offer professional advice, feasibility studies, project evaluation, and business consultancy to guide clients in making sound investment decisions.
(PICK ANY THREE)
(i) Treasury Bills: These are short-term debt instruments issued by the government to raise funds for a period usually not exceeding 364 days. They are considered safe and highly liquid.
(ii) Commercial Papers: These are unsecured, short-term promissory notes issued by large and financially strong companies to meet short-term financial obligations.
(iii) Bankers’ Acceptances : These are short-term credit instruments guaranteed by a bank, commonly used in international trade transactions.
(iv) Call Money : This refers to short-term funds lent by financial institutions to one another for very short durations, usually overnight or a few days.
(v) Certificates of Deposit (CDs): These are time deposits issued by commercial banks with a fixed maturity date and specified interest rate, which are tradeable in the money market.
(7bi)
(PICK ANY ONE)
Money Market:
A manufacturer who urgently needs ₦5 million to purchase raw materials for production while waiting for payment from debtors can approach the money market to obtain a short-term loan or issue commercial papers. This is because the money market is ideal for meeting temporary financial needs and ensuring the business continues running smoothly without interruptions.
OR
Money Market:
When a manufacturer receives a large order from a customer and needs ₦10 million to buy raw materials immediately, but expects payment only after delivery, they may approach the money market to raise short-term funds through instruments like treasury bills or call money. This is because the money market helps businesses meet urgent, short-term financing needs without waiting for delayed payments.
OR
Money Market:
If a manufacturer is waiting for payment from clients but needs ₦7 million to pay workers and settle electricity bills to keep production going, they may obtain a short-term loan from the money market using a commercial paper. This is because the money market is suitable for solving such temporary cash flow problems that occur during the course of daily operations.
(7bii)
(PICK ANY ONE)
Capital Market :
If a manufacturer plans to expand operations by building a new factory and needs ₦200 million to fund the project, they can raise the required capital by issuing shares or debentures in the capital market. The capital market is appropriate in this case because it provides long-term financing for fixed investments that generate returns over an extended period.
OR
Capital Market :
Suppose a manufacturing company wants to invest ₦500 million in purchasing advanced automated machines to improve long-term productivity. They can source this fund by issuing shares or bonds in the capital market, which is designed for raising long-term capital needed for such capital-intensive and growth-oriented projects.
OR
Capital Market:
A manufacturer who intends to set up a new production line that will take several years to complete and cost over ₦300 million may raise funds by selling shares to investors through the capital market. This is appropriate because the capital market provides long-term finance needed for such extensive development projects that cannot be funded from short-term earnings.
(7c)
(PICK ANY THREE)
(i) Provision of long-term capital: Development banks provide medium- and long-term loans to industries, agriculture, and infrastructure projects, which commercial banks often avoid due to high risk and long repayment periods.
(ii) Promotion of industrial development: They finance the establishment, expansion, and modernization of industries, especially in sectors considered vital for national development but unattractive to private investors.
(iii) Financing infrastructure projects: Development banks invest in large-scale infrastructure projects such as roads, electricity, water supply, and telecommunications, which are essential for economic growth but require massive capital.
(iv) Support for small and medium enterprises(SMEs): They provide funding and technical assistance to small-scale businesses and entrepreneurs to stimulate employment and reduce poverty.
(v) Provision of advisory services: Development banks offer professional advice, feasibility studies, project evaluation, and business consultancy to guide clients in making sound investment decisions.
(8a)
(PICK ANY ONE)
A regressive system of taxation is a tax system in which the tax rate decreases as the taxpayer’s income increases, meaning that lower-income earners pay a higher proportion of their income in tax compared to higher-income earners.
OR
A regressive system of taxation is one in which the average tax rate decreases as income increases, causing individuals with lower incomes to bear a heavier tax burden relative to their earnings than those with higher incomes.
OR
A regressive system of taxation is a tax structure where the effective tax rate falls as the taxpayer’s income rises. In this system, low-income earners pay a greater percentage of their income in taxes than high-income earners, making it unfair to the poor.
(8bi)
(PICK ANY ONE)
Equity:
This principle states that taxes should be levied in a fair and just manner. Taxpayers should contribute to government revenue according to their ability to pay. This means higher-income earners should pay more tax than those with lower incomes , promoting social fairness.
OR
Equity:
The equity principle emphasizes fairness in taxation. It means that individuals should be taxed based on their income level or financial ability. Those who earn more should pay more taxes, while those who earn less should pay less, ensuring a just distribution of the tax burden.
OR
Equity:
This principle means that taxation should be fair and just to all citizens. People should pay taxes based on how much they earn. In other words, those who have higher incomes should pay more, while those who earn less should pay less, ensuring that everyone contributes according to their capacity.
(8bii)
(PICK ANY ONE)
Certainty:
According to this principle, the amount, time, and method of tax payment should be clear and known to both the taxpayer and the government. There should be no ambiguity or hidden charges, so that people know exactly what they owe and can plan accordingly.
OR
(ii) Certainty:
This principle requires that all tax rules must be clear and definite. Taxpayers should know the exact amount to pay, when to pay, and how to pay it. This helps avoid confusion, cheating, and arbitrary taxation by tax authorities.
OR
Certainty:
The certainty principle states that tax obligations should be specific and not arbitrary. Taxpayers must be aware of what tax to pay, when to pay it, and how it is calculated, so there is no confusion or manipulation in the tax system.
(8biii)
(PICK ANY ONE)
Economy:
The principle of economy means that the cost of collecting taxes should be as low as possible in relation to the revenue generated. A good tax system ensures that administrative expenses are minimized so the net revenue to the government is maximized.
OR
Economy:
The economy principle states that the cost of administering and collecting taxes should be kept low. A good tax system ensures that a large portion of the revenue collected is available for government use and not spent on the collection process itself.
OR
Economy:
According to this principle, a good tax system should be cost-effective to operate. The amount spent on tax collection should be minimal compared to the revenue generated, so that more money goes into government use rather than administrative expenses.
(8c)
(PICK ANY THREE)
(i) To Generate Revenue: The primary reason for taxation is to raise funds for the government. These funds are used to finance essential public services such as road construction, healthcare, education, defense, and salaries of civil servants. Without taxes, the government would lack the resources to function effectively.
(ii) To Redistribute Income: Taxation helps reduce the gap between the rich and the poor. By imposing higher taxes on wealthy individuals and channeling the revenue into social services for the less privileged, the government promotes social justice and a more equitable distribution of national wealth.
(iii) To Control Inflation: When there is too much money in circulation leading to inflation, the government can increase taxes to reduce consumers’ purchasing power. This helps to stabilize prices by curbing excessive demand for goods and services.
(iv) To Protect Local Industries: Through import taxes or tariffs, the government can make imported goods more expensive. This encourages consumers to patronize locally produced goods, thereby supporting domestic industries and promoting local employment.
(v) To Discourage Harmful Consumption: The government imposes heavy taxes on harmful or socially undesirable goods like alcohol, tobacco, and sugary drinks to reduce their consumption. This policy, known as sin tax, helps protect public health and reduce social problems.
(PICK ANY ONE)
A regressive system of taxation is a tax system in which the tax rate decreases as the taxpayer’s income increases, meaning that lower-income earners pay a higher proportion of their income in tax compared to higher-income earners.
OR
A regressive system of taxation is one in which the average tax rate decreases as income increases, causing individuals with lower incomes to bear a heavier tax burden relative to their earnings than those with higher incomes.
OR
A regressive system of taxation is a tax structure where the effective tax rate falls as the taxpayer’s income rises. In this system, low-income earners pay a greater percentage of their income in taxes than high-income earners, making it unfair to the poor.
(8bi)
(PICK ANY ONE)
Equity:
This principle states that taxes should be levied in a fair and just manner. Taxpayers should contribute to government revenue according to their ability to pay. This means higher-income earners should pay more tax than those with lower incomes , promoting social fairness.
OR
Equity:
The equity principle emphasizes fairness in taxation. It means that individuals should be taxed based on their income level or financial ability. Those who earn more should pay more taxes, while those who earn less should pay less, ensuring a just distribution of the tax burden.
OR
Equity:
This principle means that taxation should be fair and just to all citizens. People should pay taxes based on how much they earn. In other words, those who have higher incomes should pay more, while those who earn less should pay less, ensuring that everyone contributes according to their capacity.
(8bii)
(PICK ANY ONE)
Certainty:
According to this principle, the amount, time, and method of tax payment should be clear and known to both the taxpayer and the government. There should be no ambiguity or hidden charges, so that people know exactly what they owe and can plan accordingly.
OR
(ii) Certainty:
This principle requires that all tax rules must be clear and definite. Taxpayers should know the exact amount to pay, when to pay, and how to pay it. This helps avoid confusion, cheating, and arbitrary taxation by tax authorities.
OR
Certainty:
The certainty principle states that tax obligations should be specific and not arbitrary. Taxpayers must be aware of what tax to pay, when to pay it, and how it is calculated, so there is no confusion or manipulation in the tax system.
(8biii)
(PICK ANY ONE)
Economy:
The principle of economy means that the cost of collecting taxes should be as low as possible in relation to the revenue generated. A good tax system ensures that administrative expenses are minimized so the net revenue to the government is maximized.
OR
Economy:
The economy principle states that the cost of administering and collecting taxes should be kept low. A good tax system ensures that a large portion of the revenue collected is available for government use and not spent on the collection process itself.
OR
Economy:
According to this principle, a good tax system should be cost-effective to operate. The amount spent on tax collection should be minimal compared to the revenue generated, so that more money goes into government use rather than administrative expenses.
(8c)
(PICK ANY THREE)
(i) To Generate Revenue: The primary reason for taxation is to raise funds for the government. These funds are used to finance essential public services such as road construction, healthcare, education, defense, and salaries of civil servants. Without taxes, the government would lack the resources to function effectively.
(ii) To Redistribute Income: Taxation helps reduce the gap between the rich and the poor. By imposing higher taxes on wealthy individuals and channeling the revenue into social services for the less privileged, the government promotes social justice and a more equitable distribution of national wealth.
(iii) To Control Inflation: When there is too much money in circulation leading to inflation, the government can increase taxes to reduce consumers’ purchasing power. This helps to stabilize prices by curbing excessive demand for goods and services.
(iv) To Protect Local Industries: Through import taxes or tariffs, the government can make imported goods more expensive. This encourages consumers to patronize locally produced goods, thereby supporting domestic industries and promoting local employment.
(v) To Discourage Harmful Consumption: The government imposes heavy taxes on harmful or socially undesirable goods like alcohol, tobacco, and sugary drinks to reduce their consumption. This policy, known as sin tax, helps protect public health and reduce social problems.
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5 Comments
Please abeg sir send it at least 7:0am or8:00am.please abeg help me out
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ReplyDelete😁🙏🙏thanx
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ReplyDeletePls will they be answer for French by 2pm
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