2016 Economics WAEC (WASSCE) Theory Past Questions (Paper 2)

(a) How much revenue was realized from:

(i) direct taxes

Solution

Company tax + Worker’s income tax

= 240 + 160 = $400m

(ii) indirect taxes  

Solution

Exercise duties + Taxes on exports + Value added tax + Import duties

= 80 + 100 + 150 + 90 = $420 million

(b) Calculate the total:

(i) recurrent expenditure

Solution

= Payment of workers’ salaries + Government administration + Maintenance of health facilities + Maintenance of official vehicles

= 150 + 200 + 220 + 7= = $640 million

(ii) capital expenditure  

Solution

= Construction of roads +  Building of schools + Extension of electricity 

= 100 + 120 + 180 = $400 million

(c) What percentage of total revenue was collected as indirect tax?  

Solution

indirect tax = $420

Total revenue (400 + 420 + 40) = $860

Therefore, % = \(\frac{420}{860} \: \times \: \frac{100}{1}\)

= 48.84%

(d) State two examples of non-tax revenue  

Answer

Non – tax revenue includes tolls, grants, court fines & fees, licenses, royalties, aids, interest, dividends, rents and profit.

(e) What was the budget surplus or deficit? Explain your answer. 

Solution

Total revenue = $ 860 million

Total expenditure = $ 1040 million

$ 860 million – $ 1040 million = $ -180 million.

It is a budget deficit since the total expenditure exceeds revenue.

Question 1

The following data shows the budget of a hypothetical country in 2006.

Study data and answer the questions that follow:

(a) How much revenue was realized from:

(i) direct taxes

Solution

Company tax + Worker’s income tax

= 240 + 160 = $400m

(ii) indirect taxes  

Solution

Exercise duties + Taxes on exports + Value added tax + Import duties

= 80 + 100 + 150 + 90 = $420 million

(b) Calculate the total:

(i) recurrent expenditure

Solution

= Payment of workers’ salaries + Government administration + Maintenance of health facilities + Maintenance of official vehicles

= 150 + 200 + 220 + 7= = $640 million

(ii) capital expenditure  

Solution

= Construction of roads +  Building of schools + Extension of electricity 

= 100 + 120 + 180 = $400 million

(c) What percentage of total revenue was collected as indirect tax?  

Solution

indirect tax = $420

Total revenue (400 + 420 + 40) = $860

Therefore, % = \(\frac{420}{860} \: \times \: \frac{100}{1}\)

= 48.84%

(d) State two examples of non-tax revenue  

Answer

Non – tax revenue includes tolls, grants, court fines & fees, licenses, royalties, aids, interest, dividends, rents and profit.

(e) What was the budget surplus or deficit? Explain your answer. 

Solution

Total revenue = $ 860 million

Total expenditure = $ 1040 million

$ 860 million – $ 1040 million = $ -180 million.

It is a budget deficit since the total expenditure exceeds revenue.