2017 - WAEC Economics Past Questions and Answers - page 4

External economies of scale imply that as the size of an industry grows larger or more clustered, the average costs of doing business within the industry fall. This may occur due to increased specialization or training of workers, faster innovation or shared supplier relationships.

Following are the types of external economies of scale

1. Transportation and Communication
2. Skilled Labour
3. Facility of Workshop
4. Helping Industry
5. Research and Experiment
6. Banking Facility

Examples of transfer payments include welfare, financial aid, social security, and government making subsidies for certain businesses.

By adding to its net factor income from abroad, we get NNPFC which is callednational income.

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.

If wages increase with inflation, and if the borrower already owed money before the inflation occurred, the inflation benefits the borrower. This is because the borrower still owes the same amount of money, but now he or she has more money in his or her paycheck to pay off the debt.

The value of any good is determined by its supply and demand and the supply and demand for other goods in the economy. A price for any good is the amount ofmoney it takes to get that good. the value is inherent in its purchasing power which is price

What Are the Main Characteristics of Money?

The main characteristics of money are durability, divisibility, portability, acceptability, limited supply and uniformity. Money serves as a store of value, a unit of account and as a medium of exchange. Durability of money means that it can be replaced when it is worn out.

Commercial banks serve individuals and businesses, while central banks serve the country'sbanking system. They provide money transfers back and forth between banks and governmental institutions both domestically and in cases of transactions with foreign entities.

the major difference here is that, the central bank is the government bank and serves the country in a whole while commercial banks accepts deposit from the public

A direct tax is a tax, such as income tax, which is levied on the income or profits of the person who pays it, rather than on goods or services. Some of the different direct taxes are income tax, corporate tax, wealth tax, and capital gains tax.

In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy.

The term underdevelopment refers to that state of an economy where levels of living of masses are extremely low due to very low levels of per capita income resulting from low levels of productivity and high growth rates of population.

 there is a set of common characteristics of underdeveloped economies such as low per capita income, low levels of living, high rate of population growth, illiteracy, technical backwardness, capital deficiency, dependence on backward agriculture, high level of unemployment, unfavourable institutions and so on.