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Table of Content
- General Overview
- The Nature of the Examination
- The Summary of the Paper
- Paper 1
- Paper 2
WASSCE Past Questions and Answers for Business Management 1999(School Candidates) is an electronic study material. Our guide has been designed to help students to pass their exams with ease. Do you care to know what our website can offer you? If so, then just wait and see. Also, have you had challenges trying to learn, write or pass your WAEC BM paper? If the answer is yes, then I can assure you that educareguide is here to help and guide you.
We are here to assure you that you can easily pass this subject. Firstly, we have a lot of links to assist you to get enough details. Truly, this will help you to gain enough knowledge and understanding to pass your examination. Secondly, we have materials on various topics, sub-topics relating to this subject area. Therefore, our site is very helpful to Senior High School Student across the West African sub-region. Notably, these countries are Nigeria, Ghana, Sierra Leone, The Gambia and Liberia. Moreover, these students rely on our guide and pass the WASSCE Business Management Examination. In detail, check the questions and the answers just below.
The Nature of the Examination
There are two Papers in the examination, (and these are Paper 1 and Paper 2). In detail, there are two sections in the Paper 1 (i.e. Section A and Section B). Section A is an Objective Test and Section B is a Case Study. There are 50 questions in the Objective test, and the Case Study has some question under it for you to answer. Finally, there are 10 questions in the Paper 2. They are asked to tests the student’s general understanding of the various topics under business management.
The Summary of the Paper
The WASSCE Business management Paper for 1999 can summarized below:
- 1999 WASSCE Business Management Paper One – Section A;
- 1999 WASSCE Business Management Paper One – Section B;
- 1999 WASSCE Business Management Paper Two
Business Management 1999 WASSCE-Past Questions and Answers- Paper 1 – Section A
Let me show you how to find the answers to the Business Management Questions – Paper 1, Section A. To clarify that, when you read a question, just click on this symbol (˅) that follows the question. After doing so, the answer will drop down for you. In fact, it is a very simple task. However, for the purposes of evaluating yourself, you may want to answer the before reviewing the suggested answer (or solution)
- All management activities start with A is the answer -Business Management 1999 WASSCE
- What function of management does a supervisor perform when he councils his subordinates? B is the answer -Business Management 1999 WASSCE
- What form of production does a carpenter undertake? D is the answer -Business Management 1999 WASSCE
- Commercial service
- The profit of business is subject to D is the answer -Business Management 1999 WASSCE
- Custom duties
- Excise duties
- Income tax
- Value added tax
- Short-term capital may be obtained by a company through D is the answer -Business Management 1999 WASSCE
- Hire purchase
- The business organization in which the members contribute equal amount of capital and each member is entitled to one vote Is known as B is the answer -Business Management 1999 WASSCE
- Sole proprietorship
- Co-operative society
- Joint stock company
- Public corporation
- Which of the following is an organizational function of management? A is the answer -Business Management 1999 WASSCE
- Determining the span of control
- Providing motivation of employees
- Formulating objectives for deviations
- Analysing the reasons.
- Which of the following is not true about small-scale units? A is the answer -Business Management 1999 WASSCE
- Determining the span of control
- It is difficult for them to borrow from the bank
- They do not have shareholders
- They operate with limited capital.
- Making a choice in the decision-making process is essential because B is the answer -Business Management 1999 WASSCE
- business objectives may be more than one
- they are alternative courses of action
- decision-making can be vertical, horizontal or diagonal
- decisions are taken at staff meetings.
- Select the statement that comes first in the business decision-making process. B is the answer -Business Management 1999 WASSCE
- Gather information
- Identify the problem
- Develop alternative proposals
- Make a reasonable choice.
- A barrier to effective management can be created when B is the answer -Business Management 1999 WASSCE
- the language is too fluent
- jargons and terminologies are used
- gestures are used as illustration
- official channels are used
- Which of the following transactions fall under medium-term finance? C is the answer -Business Management 1999 WASSCE
- A six mortgage loan
- An overdraft and supplies from creditors
- A lease from equipment for 2 years
- Credit sales and discounted promissory notes.
- Which of the following activities are involved in business decision-making? A is the answer -Business Management 1999 WASSCE
- Identifying problems
- Establishing objectives
- Gathering information
- Taking action
- II, III, IV only
- I and IV only
- III and IV only
- I, II, III and IV
- The money contributed by owners to run a business is referred to as D is the answer -Business Management 1999 WASSCE
- Which of the following is not a responsibility of a business to business groups? C is the answer -Business Management 1999 WASSCE
- To pay tax to the government regularly.
- To produce quality goods.
- To pollute the environment.
- To develop the community in which it operates.
- In a partnership firm, the death of one of the partners may lead to its B is the answer -Business Management 1999 WASSCE
- Communication between management personnel at the same level of authority is described as A is the answer -Business Management 1999 WASSCE
- Anything generally accepted as a means of exchange is called B is the answer -Business Management 1999 WASSCE
- fixed deposit
- promissory notes
- By which of the following forms of communication will policies be made known to the workers of an organization? D is the answer -Business Management 1999 WASSCE
- In large firm with many branches filing will best be done A is the answer -Business Management 1999 WASSCE
- on departmental basis
- in the director’s office
- on centralized basis
- in the typing pool.
- Which of the following functions cannot be performed by a computer in an office? B is the answer -Business Management 1999 WASSCE
- Storing information
- Receiving information
- Processing data
- Decentralization in Ghana is being carried out through C is the answer -Business Management 1999 WASSCE
- the Civil Service
- Regional Houses of Chiefs
- District Assemblies
- The Department of Co-operatives
- All the following are advantages of a closed plan office except B is the answer -Business Management 1999 WASSCE
- minimizing movement of staff
- economic use of facilities
- ease of supervision
- easy spread of diseases
- The method of filing classification recommended for the OPD of a hospital is B is the answer -Business Management 1999 WASSCE
- Activities from all units of an organization are brought together by means of B is the answer -Business Management 1999 WASSCE
- Which arrangement will a firm opt for in order to use equipment for three years and return it to the owner? A is the answer -Business Management 1999 WASSCE
- Hire purchase
- Credit purchase
- How much interest will a customer pay when he receives a loan of P2,000 at an interest rate of 10% p.a. in July and pays at the end of December the same year? A is the answer -Business Management 1999 WASSCE
- ( 5,000
- t 10,000
- t 15,000
- One way the Bank of Ghana controls inflation is by B is the answer -Business Management 1999 WASSCE
- adjusting the bank lending rate
- working out the cost of living index
- pumping more money into the system
- cancelling contracts by government
- Employees who have assurance of continued employment are said to have C is the answer -Business Management 1999 WASSCE
- employees welfare
- labour relations
- job security
- job evaluation
- One feature of a developing economy is D is the answer -Business Management 1999 WASSCE
- abundance of skilled labour
- export dependence
- low population growth
- under employment
- One important rule in the law of contract is that B is the answer -Business Management 1999 WASSCE
- an offer must move from the promisee
- principals should always ratify agents acts
- acceptance must be communicated
- all arrangements must be sealed
- International trade may be limited by B is the answer -Business Management 1999 WASSCE
- balance of payments
- foreign exchange restrictions
- specialization by countries
- inflation in global economy
- The insurance principle, which resto res the injured to his previous position, is referred to as D is the answer -Business Management 1999 WASSCE
- utmost good faith
- proximate cause
- What directional flow will communication from a subordinate pass through to a superior? D is the answer -Business Management 1999 WASSCE
- One of the effects of quotas in international trade is to D is the answer -Business Management 1999 WASSCE
- control production
- increase tariffs
- reduce prices
- restrict exports
- The effectiveness of communication can be reduced by all of the following except A is the answer -Business Management 1999 WASSCE
- poor language
- Ama paid 0495,000 for a fridge that had suffered 10% value added tax. What was the original cost of the fridge? B is the answer -Business Management 1999 WASSCE
- Which of the following is not a duty of an agent? C is the answer -Business Management 1999 WASSCE
- Render account to his principal
- Not to have conflicting interest
- Not to disclose any business secrets
- Act on his own in all cases
- The part of a computer which processes commands for its operations is known as A is the answer -Business Management 1999 WASSCE
- Mensah offers to sell his car to Kweku’s reply is called a A is the answer -Business Management 1999 WASSCE
- counter offer
- Which of the following is not the function of the Central Bank? D is the answer -Business Management 1999 WASSCE
- Performing open market operation
- Accepting deposits from individuals
- Accepting deposits from other banks
- Keeping government accounts
42. Which of the following is not a limiting factor in international trade?
- Which of the following best describes a debenture holder? A is the answer -Business Management 1999 WASSCE
- One effect of excise duty is that C is the answer -Business Management 1999 WASSCE
- it tends to reduce government revenue
- domestic consumption is increased
- many job openings are created
- it raises prices of locally manufactured goods.
- Which of the following sources of capital is not applicable to a sole proprietorship? B is the answer -Business Management 1999 WASSCE
- Revolving loan
- Trade credit
- Place decision in marketing should include A is the answer -Business Management 1999 WASSCE
- product development and packaging
- segmentation and pricing policy
- production facilities and employee welfare
- transportation and warehousing
- Which officer of an organization is responsible for training of staff? B is the answer -Business Management 1999 WASSCE
- Managing Director
- Personnel Manager
- General Supervisor
- Financial Controller
- Market segmentation can be done on the basis of B is the answer -Business Management 1999 WASSCE
- service and customer
- process and channel
- sex and income
- function and objective
- An objective of the labour union is to C is the answer -Business Management 1999 WASSCE
- organize strikes which there is misunderstanding
- work towards better conditions for its members
- rally active workers against management
- brief its members on the current economic situation
- When an offer is accepted the parties are said to have D is the answer -Business Management 1999 WASSCE
- the willingness to have legally intended
- capacity to enter into a valid contract
- entered into an agreement
- supplied the necessary consideration
I’m sure you are going to evaluate your performance with regards to the objective questions above. Let me emphasize again that the answers to the objective questions can be found by clicking on the symbol (˅) just after the question.
Business Management 1999 WASSCE-Past Questions and Answers- Paper 1 – Section B
This section of the examination is made up of a case. You are required to read the case carefully. After that, read the questions that follow the case. You are required to use the various theories and principles in business management to, then answer the questions. Students should not that, they are not supposed to answer the questions, as though they are answering a passage in English Language.
Let me show you how to find the answers to the Business Management Questions – Paper 1, Section B. When you read a question, just click on this symbol (˅) beside it, and the answer will drop down for you. It is a very simple task.
Read the following case carefully and answer the questions that follow.
DO SOMETHING SUPERMARKET
Kwame Burger, after returning from Europe, found his younger brother unemployed. His brother, who had knowledge in business management, urged Kwame Burger (K.B.) to establish a business to enable their feeble parents to earn a decent living and stop relying on remittances. K.B. thereupon visited a number of shops in Accra to inform an opinion about the exact business to establish.
To facilitate supervision, he decided to open a provision shop in his hometown, which is some twenty kilometres away from Accra. Moreover, he felt his hometown was preferable because the cost of rent was lower. K.B. quickly mobilized funds to rent a room that was conveniently converted into a shop. The shop was close by the road, which divided the town into two. Pedestrian traffic was heavier on the opposite side of the road where there was a string of kiosks selling provisions, groceries, plastic bowls and similar household items.
Time was against K.B., so he quickly opened the shop one Saturday amid a grand ceremony attended by a large crowd of people most of who were drivers and their mates from the lorry station close by. At the end of the funfair that evening, K.B. heaved a sigh of relief and told his parents I am successful. I’ve stocked the shop with corn beef, vegetable oil, baked onions, Heinz baked beans, green peas, salad cream, sardine. All the kiosks dealing in provisions sell soap, kerosene, chewing gum, toothpaste, toffees and envelops. Mine is a supermarket I am not going to compete with them”.
Items such as exercise books, eraser, pens, pencils, thread buttons, needles, pins, etc. which school children patronized were clearly absent from the shelves. In the first week of operation, business was not encouraging. There were however, hopes that business would improve. As K.B.’s time was up, he flew out of the country. He wrote to the parents six weeks later to announce his safe arrival in Europe and also to enquire about the performance of Do Something Supermarket. About 90% of the items were still on the shelves with no prospect of quick turnover. His parents remained poorer than ever.
1. (a) State two reasons that accounted for the failure of Do Something Supermarket.
- Kwame Benders choice of business was not preceded by market research and demand studies to determine the viability of the business. He failed to assess the conditions of the market before establishing the business.
- Kwame Brenner failure to undertake market research meant that the goods offered for sale were likely not to be Patronized by the People in the town. The people therefore did not patronize the baked beans, Sardines, corned beef etc offered for sale.
- There was a location problem. The location of the supermarket was poorly done. The location was bad and this is the failure of Kamei Burger’s business.
- Lack of intensive promotional strategies also accounted for the failure of the supermarket. He opened the shop amid a grand care moony attended by drivers and people whose level of income will not permit them to the goods in his shop.
- He also ignored the competition from his potential competitors thought his shop was different from theirs.
1 (b) What promotional method was adopted by Do Something Supermarket?
Promotion has to do with the creation of awareness about the existence of products or services. He used special event technique of creation awareness in attracting people’s attention to his shop.
1 (c) Mention three less expensive promotional techniques they could use.
- Public address system
- Wall decorations
- Point of purchase display
- Shop gate notice boards
- Door to door canvassing
- Town crier
1. (d) Outline the steps involved in establishing a business in Ghana?
- identify and define the nature of the business
- Conduct market research into your chosen business. This will enable you obtain enough information to aid you develop the necessary strategies, policies and programmes to keep the business on track.
- A good business plan must be formulated or developed. This will enable you determine the resources required, obtaining this resource and ensuring that the resources are judiciously used or managed.
- Raise the required capital from a good source. That is, the interest rate and terms of payment of such capital must be considered.
- Register the business with
- The registrar of companies
- Internal Revenue Services and Value Added Tax Secretarial for taxation Purposes.
- The District Assembly.
Business Management 1999 WASSCE-Past Questions and Answers- Paper 2
Click on the drop-down symbol (˅) beside the question to read the answer, just as you did above.
1. (a) Explain five reasons why managerial planning is important in business.
Planning is the first managerial function performed by every business organisation. Planning involves setting objectives and showing how these objectives can be achieved.
Planning is important in business for the following reasons:
Planning reduces dependency on intuition in decision-making. It provides information for the course of action that an organisation wants to pursue.
Planning also helps to reduce uncertainty by anticipating change. During planning, a manager is able to anticipate future events and make provision for it. Example, a company may know an upcoming festival in a year’s time and make some planning towards it.
Moreover, panning establishes objectives or standards that facilitate control. It provides the foundations for controlling processes. Every good plan has targets which members strive to achieve. Control provides management with information to assess the extent to which such objectives are being achieved.
Planning also ensures effective and efficient use of resources. In the course of planning, an organisation will know the amount of resources at its disposal and make future arrangement for such scarce resouces.
Planning establishes co-ordinated effort. Planning ensures effective collaboration of all the departments and sections within the organisation. Such collaboration will lead to a unity of purpose for these departments.
Planning provides a focal point for evaluating the performance of an organisaton. This is done by comparing the perfomance to the objectives stated in the plan.
- Planning provides information for the course of action that an organization wants to take.
1. (b) Define a business objective and state its significance.
Objectives are the goals that a business intends to achieve. Objectives must always be stated clearly with time bounds.
The following are the significance of objectives in business:
- Objectives enable management to focus attention on specific goals.
- Objectives also foster unified planning. If objectives are fully known, the manager and his key employees can formulate plans, which are directly pertinent to what they anticipate.
- Objectives serve as motivators. Without definite objectives man lacks a sense of accomplishment. He lacks direction for his efforts.
- Objectives foster decentralisation. Where clear objectives exist and are accessible to all, it enables decentralisation to be effective and beneficial rather than resulting in
- Objectives reduce uncertainty. They act as facts to guide behaviour. Where there is a clear-cut direction, you will be committed and work towards attaining that goal.
2. You have been appointed to the position of personnel manager in a company of about 60 employees. Mention and explain five functions you are expected to perform.
Manpower Planning: – This is the first function of the personnel department. It has to do with the process by which a firm ensures that the required staff in terms of qualification and number, are available at the right time. It involves determining personnel needs in relations to the objectives of the organization. It therefore deals with the qualification or education, skills and the appropriate number of personnel a firm should engage. It is therefore the process of assessing, predicting, or forecasting an organisation’s manpower needs in a relation to its plans.
- Employment/Recruitment: –After the manpower needs of the
organization have been determined, the next stage is to make an attempt to employ the right calibre of personnel into the organization. This involves identifying sources of labour supply, carrying out recruitment, selection and placement into the organization.
- Education/Training and Development: – The personnel department is responsible for the training, education and the development of employees. It is responsible for assessing staff training needs through performance appraisal. Once the training needs have been determined, it is the responsibility of the 1
department to design an appropriate programme by determining the method to be used, the course content, the duration and the institution or person to conduct the training. Training enables employees to adjust to new trends, improve their performance on the job and prepare them for promotion.
Wage and Salary Administration: – Wage and Salary Administration is one of the important functions of the personnel department. It is responsible for designing equitable and attractive Wage and Salary Schemes for employees in an organization. It also determines how overtime payments, bonuses and other fringe benefits are to be paid. It is also responsible for surveying the labour market and making the necessary changes and adjustments to the wage and salary structures to reflect the wages and salaries policies of the government of the day.
Health, Safety and Welfare of Employees: – Another important function of the Personnel department is to ensure that there are measures to take care of the health, safety and welfare of its employees. It ensures these by providing first-aid facilities, good ventilation, lighting, drainage and proper working conditions. It also provides protective gadgets for employees to reduce the occurrence of accidents and injuries. Canteen, sports, transport, pension schemes, group insurance schemes and other recreational programmes are provided for the welfare of its employees.
- Industrial Relations: The personnel department plays an important role in maintaining a cordial and harmonium working relationship between workers and management. The term industrial relations is used to describe the relationship that exists between employers, employees (trade unions) and the government.
3. Identify five members of the external interest groups of a company and show how they influence business activities.
Competitors: – They are individuals and institutions who offer the same or similar kinds of products that the business offers. A business should not be hostile to its competitors, but rather join hands with them to advance their common interest. Competitors help the business to always push higher to improve on its products.
Suppliers: – They are individuals and organisations who supply the business with its inputs or raw materials or goods the it sells. The business would want the suppliers to provide it with the most quality raw materials at an affordable prices. Managers must therefore deal with them honestly in order to obtain the supply of goods and services on schedule and at the right quantity, quality and price.
Customers : – They are individuals and organisations who buy from a business organisation. Customers preference, taste, need etc should not be ignored if the company wants to be successful. Customers’ needs/wants thus dictates/determines the production policies of the company. Quality and not shoddy goods are what the customers expect from the company.
- Community: – The business exists and operates within a community. It must there be sensitive to the needs and aspirations of the community and help them to achieve them. It must actively participate in community development. It should also avoid causing damage to property and people as a result of their industrial activities e.g. pollution. It must engage in Construction of roads, schools and colleges, places of Convenience and health post. It must also fulfil its tax obligations. It must engage in employment. These activities are very important as they go a long way to determine the success or failure of the business in that community.
- Government: It is the responsibility of every business enterprise to respect and abide by state laws and policies. They should also refrain from acts that can affect the economy negatively. They should also honour their tax obligations as required by the government of the country in which they operate.
4. (a) Why should a company be consumer-oriented?
A company is supposed to be consumer-oriented because the consumer is the lifeblood of every company. The consumer is the central focus of any firm’s total marketing strategy. The consumer keeps the company in business. A company must therefore produce what the consumer wants, and in this way satisfy the consumer and make profits. A consumer-oriented firm therefore focuses on the needs of its customers. Its primary concern is to find out what its customers’ needs and wants are so as to meet them with the highest level of customer satisfaction.
4. (b) Describe five functions of the sales department of an organization.
- The department handles customers’ complaints.
- It also explains the uses or advantages of the product to customers.
- It serves as a source of marketing research activities since they obtain a lot of information on customers.
- It is responsible for managing the sales team including sales representatives and agents who sell company’s products.
- It persuades prospective buyers to buy the company’s products.
- Keep records so that control can be exercised over sales to individual customers.
- It ensures that the company’s products occupy favoured shelf space and that the products are sold on quick return turnover basis.
5. Mention and explain five means of communication available within an organization.
Communication may be defined as the transfer of information, ideas and feelings from one person to another or to a group of people to create a common understanding. In an organisation, the means of communication available may be categorised as follows: Face to face, written, non-verbal, oral, visual and audio-visual.
Face to face communication takes the form of formal meetings, interviews, speeches and lectures, Conferences, informal contact and the grapevine. This means of communication is very effective because it provides an immediate feedback.
Communication can also be done through writing. This involves putting the message or information on paper or in any acceptable form and transmitted. It includes letters, memos, handbooks, manuals, newsletters, advertisements, suggestion schemes, general circulars and notice board bulletins. This medium of communication is effective because it can reach a large number of people in scattered locations.
Thirdly, oral communication involves the use of telephone, public address systems and inter-communications system. These may be electronically controlled. It is also effective in providing instant feedback.
Communication can also be done through the use of non-verbal means. Non-verbal communication includes all communications which do not involve the use of words either verbal or written form. It is the use of symbols, gestures or facial expressions to send messages. It is the only alternative means of communication especially when the sender and receiver cannot use a common language.
Visual communication includes the use of posters, photographs, diagrams, films, charts, cartoons etc. It can also reach a large, number of people in scattered locations.
- Finally, Communication can be done through the use of audio and audio-visual aids. Audio involves the use of radio whiles audio-visual includes the television.
6. Describe five essential characteristics of a good filing system. I must emphasize that, COD has been removed from current syllabus.
7. (a)”A” enters into a contract with “B” for the supply of goods. Describe four ways by which the contract may be discharged.
Discharge of contract refers to the various ways that a contract can come to an end.
Discharge by performance: – The first way by which a contract may be discharged is through performance. This arises where both parties to a contract have performed what they agreed to do under the contract. This means each party is satisfied with and has accepted the others’ performance.
Discharge by Agreement: – A contract may be discharged by mutual agreement between the contracting parties. The parties to the contract may agree to release each other from the contractual obligations. This means all rights and obligations under the contract are deemed to have come to an end.
Discharge by breach: – Breach of contract occurs where one party to the contract fails to perform his part of the obligation either expressly or impliedly without justification. A party not in breach can sue for damages against the party in breach.
Discharge by Frustrations: – A contract is said to be discharged through frustration when certain unforeseen events such as strikes, outbreak of hostilities, change of government law which renders performance impossible, where the subject matter of the contract has been destroyed or where death makes performance illegal or impossible.
- Discharge by Notice: – The contract may contain a term giving either party to
terminate it by notice. The period of notice should be acceptable to both parties so that undue loss is not suffered.
7(b) Explain the term consideration in a contract. Give an example.
Refer to 1995 Paper One Question 4(a). You may click here for more information on this question.
Consideration is some benefit received or an act done by one party in return for another party’s’ promise. It has been defined as some benefit received by one party who gives a promise or performs an act in return. It was also defined by the court in Currie V. Misa (1875) as “some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other”. For example, if “A” gives an amount of $1,000 to “B” and “B” promises to deliver a 100 bags of cement to “A”, then the $1,000 is the consideration that “A” has given for the promise of “B”.
8. (a) What is market segmentation?
NB: Refer to 1996 Paper Two Question 6. Fine the answer from here.
8. (b) State and explain four bases for market segmentation.
NB: Refer to 1996 Paper Two Question 6. Fine the answer from here.
9. (a) State and explain four services a commercial bank may perform on behalf of its customers.
NB: Refer to 1993 Paper Two Question 9. Fine the answer from here.
9. (b) State four reasons why a cheque may be dishonoured.
- The cheque may be wrongly made out. That is the words and the figures of the money to be paid may vary.
- When the amount written on the cheque is greater than the amount in the account of the drawer.
- The signature on the cheque may not correspond with the specimen held by the bank Where the cheque is not dated
- An alteration on the cheque, which requires authentication by the drawer.
- Payment may be stopped by order of the drawer.
- If it is a post-dated cheque and presented to the bank before the due date.
- If the name on the back of the cheque does not correspond with the payee’s name on the front (irregular endorsement).
- Notice of death of drawer by the bank.
- Insanity or bankruptcy of the drawer.
- Garnishee order (an order by the court not to pay).
10. (a) Two major foreign trade policies that countries may adopt are free trade and protection. State and explain four reasons why a country may adopt a policy of protection.
In spite of the advantages associated with international trade, different governments impose restrictions like quota, custom duties, excise duties, prohibition, etc. on trade for the following reasons:
To protect infant industries: – industries which have just been established are considered not to have grown and gained grounds strong enough to compete with the developed ones. If allowed to compete with these developed ones, the old ones will out compete the new (infant) industries. Trade restrictions are therefore adopted to protect the infant industries.
- To create employment avenues: – Trade restrictions may also be a source of
employment for people. The, revenue that arise from the restriction may be used for development which will create job opportunities for people. Also, custom officials may be employed to implement these restrictions.
As a source of revenue to the government: – The government of countries restrict free trade to raise revenue for developmental purposes. Import duties contribute greatly to the revenue generated in every West African country.
- As a retaliatory measure: – Such a policy could also be taken for retaliatory measures if a trading country imposes restrictions on the partner, that partner can also put in measures to counter those restrictions.
10. (b) State four types of protectionist policy a country may adopt.
Quota: – Quota limits the quantity of goods that should be imported into the country. The aim of this is to control total imports of goods into a country, and to make it effective, it is supported by “import licensing”. This is a document which specifies the amount of goods that a person is allowed to import.
Tariffs: These are taxes placed on goods imported into the country. They take the form of import duties. Tariffs increase the prices of imported goods. Consumers will therefore be discouraged from consuming these high-priced imported products and hence their importation.
Embargo: – This is a total or outright ban on the importation of certain products.
- Subsidies: – These are payments made by governments to producers in order
to reduce their cost of production and consequently the price of the commodity produced. The aim of subsidies is to switch demand from imported goods to locally produced goods by improving its competitiveness.
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