This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
ScanSolve AI Answer
Step 1: Solve Question 12. The exchange rate is 1 dollar = 475 FCFA. The cost of the dress in USA is 15 dollars. To find the cost in FCFA, multiply the dollar amount by the exchange rate. Cost in FCFA = Cost in dollars × Exchange rate Cost in FCFA = 15 dollars × 475 FCFAdollar Cost in FCFA = 7,125 FCFA The correct option is B. The final answer is B. 7,125 FCFA Step 2: Solve Question 13. National debt = 100 billion FCFA. External debt = 25 billion FCFA. The real burden of national debt is typically associated with the external debt, as it requires foreign currency to service. To find the percentage of the National debt that constitutes a real burden, divide the external debt by the total national debt and multiply by 100. Percentage of real burden = External debtNational debt × 100\% Percentage of real burden = 25 billion FCFA100 billion FCFA × 100\% Percentage of real burden = 0.25 × 100\% Percentage of real burden = 25\% The correct option is D. The final answer is D. 25\% Step 3: Solve Question 14. A merit good is a good or service that the government believes individuals will under-consume, and which therefore ought to be subsidized or provided free of charge. Merit goods often have positive externalities. A. Education: Education is generally considered a merit good due to its positive externalities (e.g., a more skilled workforce, informed citizens) and the belief that individuals might under-consume it if left to the free market. B. Street lighting: This is a public good, characterized by non-rivalry and non-excludability. C. Public highway: This is also a public good. D. Public monument: This is a public good. Among the given options, education best fits the definition of a merit good. The final answer is A. Education Step 4: Solve Question 15. Fixed costs (FC) = 5,000 Frs CFA. We need to calculate the average cost (AC) for the 5th unit of output. From the table, for Output (in units) = 5, the Variable cost (VC) = 10,000 FCFA. Total Cost (TC) = Fixed Cost (FC) + Variable Cost (VC) TC for 5 units = 5,000 FCFA + 10,000 FCFA TC for 5 units = 15,000 FCFA Average Cost (AC) = Total Cost (TC) / Output (Q) AC for 5 units = 15,000 FCFA5 units AC for 5 units = 3,000 FCFA The correct option is A. The final answer is A. 3,000 FCFA Step 5: Solve Question 16. An official decision by government to reduce the value of its currency in relation to others is referred to as devaluation. A. Revaluation: An increase in the value of a currency relative to others in a fixed exchange rate system. B. Appreciation: An increase in the value of a currency relative to others in a floating exchange rate system. C. Depreciation: A decrease in the value of a currency relative to others in a floating exchange rate system. D. Devaluation: A decrease in the value of a currency relative to others in a fixed exchange rate system, decided by the government. The correct option is D. The final answer is D. Devaluation Step 6: Solve Question 17. The question asks for the option that is not a form of direct government intervention. A. Wage legislation: Direct intervention as the government sets rules for wages. B. Privatisation and nationalization: Direct intervention as the government changes ownership of industries. C. Fiscal policy: This involves government spending and taxation to influence the economy. While it is a form of government intervention, it is generally considered an indirect* method, influencing aggregate demand rather than directly controlling specific economic activities or prices. D. Price control: Direct intervention as the government sets maximum or minimum prices for goods/services. Fiscal policy is an indirect form of intervention. The final answer is C. Fiscal policy Step 7: Solve Question 18. Initial deposit = 150,000 Frs. Cash ratio = 20% = 0.20. The money multiplier (or deposit multiplier) is calculated as 1 / Cash Ratio. Money Multiplier = (1)/(0.20) = 5 The total deposit that a commercial bank can create is the initial deposit multiplied by the money multiplier. Total Deposit Creation = Initial Deposit × Money Multiplier Total Deposit Creation = 150,000 Frs × 5 Total Deposit Creation = 750,000 Frs The correct option is C. The final answer is C. 750 000 Frs Step 8: Solve Question 19. A restrictive instrument used to discourage import and raise revenue for the state is called a tariff. A. Embargo: A complete ban on trade with a particular country. B. Trade restriction: A general term that includes various measures, but not specific enough for "raise revenue." C. Tariffs: Taxes imposed on imported goods, which discourage imports and generate revenue for the government. D. Quotas: Limits on the quantity of goods that can be imported, which discourage imports but do not directly raise revenue for the state (unless quota licenses are sold). The correct option is C. The final answer is C. Tariffs Step 9: Solve Question 20. A tax levied on the profits of a company is called corporation tax. A. Capital gain tax: A tax on the profit realized on the sale of a non-inventory asset. B. Corporation tax: A tax imposed on the net income or profit of a company. C. Specific tax: A fixed tax per unit of a good or service. D. Ad valorem tax: A tax based on the assessed value of an item, such as property or goods. The correct option is B. The final answer is B. Corporation tax