WAEC Economics Past Questions & Answers - Page 170

846.

To improve the balance of payment s position in West African countries, there must be

A.

Removal of barriers to importation of goods and services

B.

Increase rate of exportation of goods and services

C.

Increase domestic consumption of foreign produced goods

D.

The development of the local market

Correct answer is B

No explanation has been provided for this answer.

847.

When the value of a nation’s export is greater than its imports

A.

A favourable balance of trade exists

B.

An unfavourable balance of payment exists

C.

The net foreign trade is zero

D.

Inflation occurs

Correct answer is A

No explanation has been provided for this answer.

848.

The theory of comparative cost advantage is associated with

A.

Alfred Marshal

B.

Adam Smith

C.

David Ricardo

D.

J. B. Say

Correct answer is C

No explanation has been provided for this answer.

849.

Government revenue from the groundnut industry is from

A.

Licences

B.

Rents

C.

Royalties

D.

Taxes

Correct answer is D

No explanation has been provided for this answer.

850.

Mr. Bala’s income is $800.00 per month while that of Mr. Jatau is $1,200.00. If Messrs. Bala and Jtau pay $80.00 and $120.00 respectively as taxes, the tax system is

A.

Progressive

B.

Regressive

C.

Proportional

D.

Ad-valorem

Correct answer is A

A progressive tax is a tax in which the average tax rate increases as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate.

The term can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime. Progressive taxes are imposed in an attempt to reduce the tax incidence of people with a lower ability to pay, as such taxes shift the incidence increasingly to those with a higher ability-to-pay.

The opposite of a progressive tax is a regressive tax, where the average tax rate or burden decreases as an individual's ability to pay increases.