WAEC SSCE - Commerce - 2000

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A quotation is sent in reply to a letter of enquiry. When a potential customer sends a letter of enquiry requesting information about the price, quality, or availability of goods or services, the supplier usually responds with a quotation. A quotation is a formal statement of the supplier's offer to supply the requested goods or services at a specific price, usually valid for a limited time period. It includes the quantity, description, and unit price of the goods or services, as well as any other terms and conditions of the offer. The potential customer can then decide whether or not to accept the offer and place an order.

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When a country's total visible and invisible exports are more than its total visible and invisible imports, it has a favourable balance of trade. This means that the country is exporting more goods and services than it is importing, resulting in a surplus. The balance of trade is an important economic indicator that shows how much a country is producing and consuming relative to its trading partners. A favourable balance of trade can lead to increased economic growth and employment opportunities in the exporting industries, while an unfavourable balance of trade, where a country imports more than it exports, can lead to a trade deficit and potentially lower economic growth. The balance of payments is a broader measure that includes not only visible and invisible trade but also other types of financial transactions between a country and its trading partners, such as foreign investment and loans.

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A doctor would be classified under the category of "Direct services" occupations. This is because their primary occupation is to directly provide medical services to patients, which is a form of direct service. Doctors are highly trained professionals who diagnose and treat illnesses and injuries, prescribe medication, perform surgeries, and provide advice and guidance to their patients. Therefore, they provide a direct service to their patients, making them fall under the category of direct service occupations.

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The production of goods in anticipation of demand is possible because of the existence of warehousing. Warehousing allows manufacturers to produce goods in advance and store them until demand arises. This helps to reduce the cost of production, as production can be done in large quantities, taking advantage of economies of scale. Warehousing also ensures a steady supply of goods to meet fluctuating consumer demands. Additionally, warehousing enables manufacturers to efficiently manage their inventory and distribution network, reducing the likelihood of stockouts or overstocking. Overall, warehousing plays a vital role in ensuring the smooth flow of goods from manufacturers to consumers.

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Tax laws are not a means of consumer protection. Tax laws are rules and regulations that govern the collection and payment of taxes by individuals and businesses to the government. Consumer protection refers to the actions taken to safeguard the rights of consumers against unfair practices by businesses, such as false advertising, deceptive pricing, and unsafe products. The other options mentioned, such as price control, Sales Goods Act, and Trade Description Act, are all examples of consumer protection measures aimed at ensuring fair and ethical business practices and protecting consumers from harm.

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The deliberate and sustained efforts to maintain a good image of a company is known as public relations. Public relations involve managing the communication between a company and its stakeholders, including customers, investors, employees, and the public. The goal is to maintain a positive image of the company and promote its reputation through various channels, such as media relations, community outreach, and events. Public relations also involve crisis management, which is the process of handling negative publicity or issues that can harm a company's reputation. By using various communication strategies, public relations help companies build and maintain strong relationships with their stakeholders and promote a positive image of the company.

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The deliberate and sustained efforts to maintain a good image of a company is known as public relations. Public relations refer to the strategic communication efforts made by an organization to establish and maintain a positive relationship with the public, including customers, employees, investors, and other stakeholders. The main objective of public relations is to build a strong reputation for the company and to promote a favorable image of the organization. This is achieved through various activities, such as media relations, events, sponsorships, and other communication efforts that are designed to enhance the organization's visibility and credibility in the eyes of the public.

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A specially crossed cheque is not a means of payment in foreign trade. A specially crossed cheque is a cheque that has two diagonal lines drawn on its upper left-hand corner. This type of cheque can only be deposited into a bank account of the named payee and cannot be cashed over the counter. In foreign trade, payment is usually made through telegraphic money orders, letters of credit, or debit transfers, as they are more secure and efficient. Therefore, the correct answer is Specially crossed cheque.

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When a country's total visible and invisible exports (money it earns by selling goods and services to other countries) are more than its visible and invisible imports (money it spends on buying goods and services from other countries), it has a favourable balance of trade. This means that the country is earning more foreign exchange than it is spending, which is generally considered a good thing for its economy. Favourable balance of trade is often seen as a part of the broader concept of balance of payments, which refers to the record of all economic transactions between a country and the rest of the world over a period of time. Therefore, when a country has a favourable balance of payments, it means that it is earning more foreign exchange than it is spending over a period of time.

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Cumulative preference shares are a type of preference shares where unpaid dividends are carried forward to the next financial year. This means that if the company is unable to pay the dividend in a particular year, it is added to the unpaid amount from previous years and is paid out in the future when the company can afford it. Therefore, the correct option is "Unpaid dividends are carried forward". The other options are not applicable to cumulative preference shares.

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A merchant who wishes to order goods from a foreign country sends an "Indent." An indent is a formal document that is used to order goods from a foreign supplier. It is also known as a purchase order or a letter of intent. The indent includes details such as the type and quantity of goods required, delivery dates, payment terms, and shipping information. The indent serves as a written agreement between the merchant and the supplier, which ensures that the supplier knows exactly what goods are required and when they need to be delivered. This helps to avoid any misunderstandings or disputes that may arise during the transaction. In summary, when a merchant wishes to order goods from a foreign country, they send an indent, which is a formal document that outlines the details of the transaction and serves as a written agreement between the merchant and the supplier.

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A means of payment through the post office is a Money Order. A money order is a payment order that is issued and guaranteed by a post office, allowing the recipient to receive a specified sum of money. It is a secure and convenient way to send money through the mail, especially for those who do not have access to traditional banking services. To obtain a money order, a customer visits a post office and pays the desired amount plus a small fee. The post office then issues the money order, which can be sent through the mail to the recipient. The recipient can then cash the money order at their own post office or deposit it into their bank account. Overall, a money order is a means of payment through the post office, providing a secure and convenient way to send money through the mail, particularly for those who do not have access to traditional banking services.

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A cargo liner is used for moving only goods from one sea port to another. Cargo liners are ships that are designed to transport cargo in containers or other forms of packaging, rather than passengers. They are typically used for long-distance shipping and are capable of carrying large quantities of goods, such as raw materials or finished products. Cargo liners are an important part of the global shipping industry, which is responsible for transporting the vast majority of international trade. While ocean liners and ferries can also carry cargo in addition to passengers, cargo liners are specialized for the transportation of goods and are often larger and more heavily built than other types of ships. Coasters, on the other hand, are ships that operate along a coastal route, and typically carry both passengers and cargo.

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The total value of fixed and current assets is referred to as "capital employed." This represents the total amount of capital that a business has invested in its assets in order to generate revenue. Fixed assets include items like buildings and equipment that are used in the long-term operation of the business, while current assets include items like inventory and accounts receivable that are expected to be converted into cash within a year. By adding these two types of assets together, we get the total amount of capital that the business has employed in its operations.

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The financial institution refers to an establishment that manages financial transactions, such as loans, investments, and deposits. Therefore, the option that is not a financial institution is the Commodity Board. A commodity board is an organization that manages the production and marketing of specific commodities, such as coffee or cotton, and does not deal with financial transactions.

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The term used to describe when an insurance company indemnifies the insured and takes over his rights is "subrogation". In simple terms, it means that after the insurance company has paid out compensation to the insured for a loss, the company assumes the right to pursue legal action against any third party responsible for causing the loss. This allows the insurance company to recover the amount they paid out to the insured. For example, if a car owner's vehicle is damaged due to the negligence of another driver, the insurance company may pay the owner for the damage caused, and then pursue the at-fault driver for reimbursement through subrogation.

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A consignment note is used when goods are dispatched to an agent through transporters. It is a document that accompanies a shipment of goods and provides details about the contents of the shipment, the parties involved in the shipment, and the terms of the shipment. It serves as proof of receipt of the goods by the carrier and is used to track the shipment from its point of origin to its destination. The consignment note includes information such as the name and address of the sender and recipient, a description of the goods, the quantity and weight of the goods, the mode of transport, and any special instructions or requirements for the shipment.

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The agreement to transport goods is a contract between the shipper and the carrier which sets out the terms and conditions of transportation. It is not a document of title that can be used to claim ownership of the goods. Among the options given, the agreement that is not a document of title is a "charter party." A charter party is a contract between a shipowner and a charterer for the hire of a vessel to transport goods or passengers. The charter party does not give the charterer any ownership or control over the vessel or the goods being transported.

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Tax laws are not a means of consumer protection. Tax laws are implemented to generate revenue for the government and are not specifically designed to protect consumers. Consumer protection refers to the measures taken by governments and businesses to ensure that consumers are not harmed by the products or services they purchase. Price control, Sales Goods Act, and Trade Description Act are examples of measures taken to protect consumers. Price control ensures that businesses do not overcharge consumers, the Sales Goods Act protects consumers from faulty or damaged goods, and the Trade Description Act prevents businesses from misleading consumers about the products or services they offer.

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The deliberate and sustained efforts to maintain a good image of a company is known as public relations. Public relations involve managing communication between an organization and its stakeholders, including customers, employees, investors, and the general public. The goal of public relations is to create and maintain a positive image of the company and its products or services, build trust and credibility with stakeholders, and protect the company's reputation in the event of a crisis or negative publicity. This is done through various activities such as media relations, community outreach, events, and social media.

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A refund of the duty collected on goods imported and processed for re-export is called Excise Drawback. Excise Drawback is a refund of the duties paid on imported goods that are subsequently processed and re-exported. When a company imports goods that are intended to be used in the production of exported goods, they can apply for an excise drawback. The refund is equivalent to the duties that were paid on the imported goods, and it serves as an incentive for companies to engage in export-oriented production. The process of claiming an excise drawback involves providing evidence that the imported goods were used in the production of exported goods. Once the evidence is provided and the claim is approved, the company receives a refund of the duties that were paid on the imported goods. Overall, an excise drawback is a refund of the duties paid on imported goods that are subsequently processed and re-exported, providing an incentive for companies to engage in export-oriented production.

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The information on terms of carriage of mails is found in the post office guide. A post office guide is a publication that contains information on postal rates, regulations, and services provided by the postal system. It provides detailed information on the terms of carriage of mails, including delivery standards, postage rates, restrictions, and other relevant information related to mailing services. Therefore, if you need information on the terms of carriage of mails, you can consult the post office guide.

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The method of sending messages by the teleprinter is called "telex". Teleprinter machines are used to send and receive messages over long distances through a network of interconnected telex exchanges. The messages are sent by typing them on a keyboard, and they are received by printing them out on a paper tape. Telex was widely used for business and official communication in the 20th century, before being replaced by modern electronic communication methods such as email and instant messaging.

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Branding is a tool for marketing and building a strong identity for a product, service, or company. A brand is a name, term, design, or symbol that distinguishes one product or service from another. A strong brand can help a company stand out from its competitors and create a loyal customer base. Branding can be used as a tool for competitive advertising by highlighting the unique features and benefits of a product or service. A strong brand can also help to create consumerism by building a positive reputation and trust with customers. Marketing research can be used to develop and refine a brand's message and image, ensuring that it resonates with the target audience. Pricing policy can also be influenced by branding, as a strong brand can command higher prices and increase the perceived value of a product or service. Overall, branding is a powerful tool for companies to differentiate themselves from their competitors, build trust with customers, and create a strong identity for their products or services.

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The price reduction based on the size of an order is called a "Trader Discount." A trader discount is a reduction in the price of goods or services that a buyer receives based on the quantity of the goods or services purchased. The discount is usually given as a percentage of the total purchase price, and the larger the order, the greater the discount. The purpose of a trader discount is to incentivize customers to purchase larger quantities of goods or services, which can benefit both the buyer and the seller. For the buyer, the discount can result in lower per-unit costs, while the seller can benefit from increased sales volume and revenue. In summary, a trader discount is a price reduction that a buyer receives based on the quantity of goods or services purchased. The larger the order, the greater the discount, and the purpose of the discount is to incentivize customers to purchase larger quantities of goods or services.

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When an insurance company indemnifies the insured and takes over his rights, this is known as subrogation. In simpler terms, subrogation is a legal right that allows an insurer to step into the shoes of the insured and pursue any third party who may have caused the loss or damage to the insured property. In other words, the insurance company pays for the damages incurred by the insured and then takes over the insured's rights to pursue the responsible party for compensation. This is done to prevent the insured from receiving a double recovery and to allow the insurer to recover its losses.

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The marketing activity that stimulates immediate demand for a product is called sales promotion. Sales promotion is a marketing strategy that is designed to encourage customers to buy a product or service by providing them with an incentive to do so. These incentives may include discounts, coupons, free samples, or other promotions that are designed to make the product more attractive to customers. The goal of sales promotion is to increase sales in the short term by creating a sense of urgency or excitement about the product. Unlike advertising or publicity, which are designed to build long-term brand awareness, sales promotion is focused on generating immediate sales. It is a key element of many marketing campaigns and can be an effective way to boost revenue and increase market share.

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Commerce can be defined as trade and aids to trade. Commerce is the process of buying and selling goods and services, and it includes all the activities involved in bringing products from the producer to the consumer. Aids to trade are the services or activities that facilitate the process of buying and selling, such as advertising, transportation, warehousing, and insurance. Commerce encompasses both wholesaling and retailing, which are two main types of trade. Wholesaling involves selling goods in large quantities to retailers or other businesses, while retailing involves selling goods to the final consumers in small quantities. Therefore, commerce is a broader concept that includes both trade and aids to trade.

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A merchant who wishes to order goods from a foreign country sends an indent. An indent is a written request or order for goods sent by a buyer to a seller, especially for goods that are not in stock or are manufactured to order. In international trade, an indent is commonly used by a merchant to request goods from a foreign supplier or manufacturer. It specifies the quantity, quality, description, price, delivery terms, and other details of the goods requested.

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In a Public Limited Liability Company, equities are referred to as ordinary shares. Ordinary shares represent part ownership in the company and entitle the shareholder to vote at shareholder meetings and to receive dividends when the company distributes profits. Ordinary shares are also known as common stock. Preference shares are a different class of share that typically have fixed dividend payments but do not carry voting rights. Authorized capital refers to the maximum amount of share capital that a company can issue, while called-up capital refers to the portion of the authorized capital that has been issued and for which payment has been called up by the company.

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The price of goods is not contained in an advice note. An advice note is a document that is sent by a supplier to a customer to inform them that goods have been dispatched. It contains information such as the types of goods, the quantity of goods, the date of dispatch, and the means of dispatch. However, it does not contain information about the price of the goods as this is usually communicated through a separate document such as an invoice.

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In a public Limited Liability Company (PLC), equities are referred to as ordinary shares. Ordinary shares are issued to the shareholders who invest in the company, providing them with the right to vote on company decisions and receive a portion of the company's profits, known as dividends. PLCs are companies that have offered their shares for sale to the public, and are required to issue a prospectus to provide information to potential investors. The authorized capital is the maximum amount of capital that a company is permitted to issue under its memorandum of association, while the called-up capital is the amount of capital that the company has requested from shareholders to be paid up. Preference shares are a type of share that entitles the holder to a fixed dividend and priority over ordinary shareholders in the event of liquidation, but generally do not carry voting rights.

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Mortgage bank encourages people to save towards owning a house. Mortgage banks are specialized financial institutions that provide home loans to individuals and also accept deposits from them. They offer various mortgage schemes that allow people to save towards owning a house, such as fixed-rate mortgages, adjustable-rate mortgages, and interest-only mortgages. By encouraging people to save towards owning a house, mortgage banks help to promote home ownership and increase access to affordable housing.

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The total value of fixed and current assets is called "capital employed". It represents the amount of money invested by the business in its fixed assets, such as property, equipment, and machinery, as well as its current assets, such as inventory, accounts receivable, and cash. Capital employed is an important metric for businesses because it reflects the amount of resources they have at their disposal to generate profits. It is calculated by subtracting current liabilities from total assets.

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A counter-offer in a contract is regarded as a rejection. This is because a counter-offer is a response to an initial offer that changes the terms of the original offer. It essentially ends the original offer and proposes new terms, which the original offeror can choose to accept or reject. As such, a counter-offer represents a rejection of the original offer, and the offeror is no longer bound by the terms of the original offer.

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The retirement insurance policy that enables the assured to receive income for a specific period is called an "annuity". An annuity is a contract between an individual and an insurance company where the individual pays a lump sum or periodic payments to the insurance company. In return, the insurance company guarantees to make periodic payments to the individual starting immediately or at a future date. An annuity that is designed to provide a specific amount of income for a specific period, usually until the individual's death, is referred to as a "fixed term annuity."

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A doctor would be classified under the Direct Services class of occupation. Direct services refer to occupations that involve providing a service directly to clients or customers. Examples of direct service occupations include doctors, teachers, and hairdressers. These occupations involve a direct interaction with the customer, often requiring specialized skills or training. In the case of a doctor, they provide medical services directly to their patients. They diagnose and treat illnesses and injuries, and provide preventive care and health education. The work of a doctor requires specialized training and expertise, as well as a high level of responsibility and accountability. In contrast, extractive occupations involve the extraction of natural resources, such as mining or fishing. Commerce occupations involve buying and selling goods or services. Indirect services refer to occupations that support direct service or extractive activities, such as administration or transportation. Overall, a doctor would be classified under the Direct Services class of occupation, given their role in providing direct medical services to patients.

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Cumulative preference shares have the feature that unpaid dividends are carried forward to the next period. This means that if the company is not able to pay dividends to the shareholders in a particular year, the unpaid dividends are accumulated and carried forward to the next year. This ensures that the shareholders receive their dividends eventually, even if the company faces a temporary setback. In contrast, non-cumulative preference shares do not have this feature, and if the company is unable to pay dividends in a particular year, the shareholders simply miss out on the dividends for that year. Therefore, cumulative preference shares are considered to be less risky than non-cumulative preference shares, and they generally offer a lower rate of return to the shareholders.

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(i) Marketing concept

The marketing concept is a business philosophy which holds that the key to achieving the goals of an organisation is to identify the needs and wants of the target customers and satisfy them more effectively and efficiently than competitors do. It puts customer satisfaction at the centre of all business activities, so that the firm produces what it can sell rather than trying to sell what it can produce.

(ii) Marketing mix

The marketing mix is the combination of the controllable elements that a firm blends together to satisfy its target market and achieve its objectives. It is commonly known as the 4 Ps: Product (the goods or services offered), Price (the amount charged), Place (the channels and location through which goods reach the buyer) and Promotion (advertising and other efforts to inform and persuade customers).

(iii) Market segmentation

Market segmentation is the process of dividing a large, varied market into smaller groups of buyers who have similar needs, tastes or characteristics, so that the firm can serve each group more effectively. Markets may be segmented on the basis of age, sex, income, occupation, taste or geographical location.

(iv) Product differentiation

Product differentiation is the effort by a producer to make his product appear different from and more attractive than similar products of competitors. This is done through features such as branding, special packaging, quality, design or colour, so that customers can distinguish it and develop a preference for it.

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(a) Five features of itinerant trading

Itinerant traders are small-scale retailers who move about from place to place with their goods instead of trading from a fixed shop. Their features include:

1. Mobility: The trader moves from place to place, taking goods to where customers are found.
2. Small capital: The business is started and run with very little money.
3. No fixed premises: The trader operates without a permanent shop, so no rent or rates are paid.
4. Small stock of goods: Only a limited quantity and variety of goods is carried at a time.
5. Direct dealing with consumers: The trader sells directly to the final consumer, usually for cash.

(Sale of mainly convenience/everyday goods and one-man operation are also acceptable.)

(b) Five features of a supermarket

1. Self-service: Customers pick goods from open shelves themselves and pay at the checkout, so few sales assistants are needed.
2. Wide variety of goods: It sells a large range of items, mainly groceries and household goods, all under one roof.
3. Fixed prices and price labelling: Goods are pre-priced and sold at fixed prices, so there is no bargaining.
4. Large-scale operation: It requires large capital, operates from large premises and buys in bulk.
5. Payment at a central checkout point: All purchases are paid for at a single cash point before leaving the store.

(Sale of pre-packaged goods and cash-only sales are also acceptable.)

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(a) Five reasons why tariffs are imposed on imports

1. To raise revenue for the government: Import duties are an important source of income used to finance public services.
2. To protect infant/local industries: By making imported goods more expensive, tariffs enable young home industries to compete and grow.
3. To discourage the importation of harmful or undesirable goods: High tariffs reduce the inflow of goods considered dangerous or luxurious.
4. To improve the balance of payments: By reducing imports, tariffs help to correct an unfavourable balance of payments and conserve foreign exchange.
5. To prevent dumping: Tariffs discourage foreign firms from flooding the country with cheap goods that would ruin local producers.

(Retaliation against another country's trade barriers is also acceptable.)

(b) Five functions performed by the customs authority

1. Collection of import and export duties: It assesses and collects duties on goods entering and leaving the country.
2. Prevention of smuggling: It patrols borders, ports and airports to stop the illegal movement of goods.
3. Inspection and examination of goods: It checks imports and exports to ensure they agree with the documents and are not prohibited.
4. Compilation of trade statistics: It keeps records of goods imported and exported, which are used to compute the country's trade figures.
5. Enforcement of trade regulations: It ensures that quotas, bans and other government trade laws are obeyed.

(Protecting society by preventing the entry of prohibited or dangerous items such as drugs is also acceptable.)

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(a) Six reasons why manufacturers pre-package their products

1. To protect the product: Packaging shields goods from damage, dirt, moisture and contamination during handling and transport.
2. To make handling and carriage easier: Pre-packaged goods in standard sizes are easier to load, stack, transport and store.
3. For easy identification and advertising: The package carries the brand name and colours, which help buyers recognise the product and act as silent advertising.
4. To provide information to the consumer: Labels give details such as ingredients, weight, price, directions for use and expiry date.
5. To ensure accurate measurement: Goods are pre-weighed or pre-measured into fixed quantities, saving time at the point of sale and reducing disputes.
6. To make the product attractive and boost sales: Attractive packaging appeals to customers and encourages them to buy.

(Preserving perishable goods and preventing pilfering are also acceptable.)

(b) Four disadvantages of pre-packaging

1. It increases the cost of the product: The cost of packaging materials and labour is added to the price the consumer pays.
2. The buyer cannot inspect the contents: Sealed packages prevent customers from examining the actual goods before buying.
3. It creates environmental (waste) problems: Discarded packaging materials litter the environment and cause pollution.
4. It can be used to deceive customers: A large or attractive package may contain a small quantity, misleading the buyer as to the true content.

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Five factors that adversely affect the growth of commerce in West Africa

1. Inadequate capital: Most businesses in West Africa are small and lack sufficient funds to expand, while credit facilities from banks are limited and interest rates are often high. This restricts the growth of trade and industry.
2. Poor transport and communication infrastructure: Bad roads, inadequate railways and unreliable telecommunication facilities make the movement of goods and information slow and costly, hindering the smooth flow of commerce.
3. Low level of technology: The sub-region relies heavily on outdated methods and imported machinery. Poor technology lowers the quantity and quality of goods produced for trade.
4. Political instability: Frequent changes of government, civil unrest and insecurity discourage both local and foreign investors and disrupt business activities.
5. Low purchasing power (poverty) and small markets: Widespread poverty and low incomes mean that demand for goods and services is small, so businesses cannot easily grow.

(Other valid factors include unstable government policies and multiple taxation, shortage of skilled manpower, unreliable power/electricity supply, and dependence on imported goods with weak local production.)

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(a) Seven problems sole proprietors are likely to face on forming a partnership

1. Sharing of profit: Profit which the sole proprietor formerly enjoyed alone must now be shared among the partners.
2. Loss of sole/absolute control: Each former owner can no longer take decisions alone; decisions must be taken jointly, which can be frustrating.
3. Disagreements and quarrels: Differences in opinion, temperament and business ideas among partners may lead to conflicts that disrupt the business.
4. Unlimited liability: The partners are jointly and severally liable for the debts of the firm, so one partner's private property may be used to settle the firm's debts.
5. Liability for the acts of other partners: Since each partner is an agent of the firm, one partner can bind the others by his actions, and all suffer for the mistakes or dishonesty of one.
6. Delay in decision-making: Because major decisions require consultation and agreement, action may be slow, causing the firm to miss opportunities.
7. Difficulty in withdrawing capital and instability: A partner cannot easily withdraw his capital, and the death, insanity or bankruptcy of one partner can bring the whole firm to an end.

(Continuity problems and difficulty in transferring one's share are also acceptable.)

(b) Three conditions suitable for the formation of a partnership business

1. When more capital is required: A partnership is suitable where the business needs more funds than one person can provide.
2. Where different skills are needed: It suits situations where the venture requires the combined expertise of several people, such as a firm of lawyers, doctors or accountants.
3. Where mutual trust exists among the persons: Partnership is suitable when the intending partners know, trust and are willing to cooperate with one another in good faith.

(A desire to spread risk and share responsibility is also acceptable.)

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(a) Four insurance policies available to a ship owner

1. Hull insurance: Covers the ship itself against loss or damage from perils of the sea such as sinking, collision, grounding and storm.
2. Freight insurance: Protects the ship owner against loss of freight (carriage charges) where cargo is lost or the voyage is not completed.
3. Protection and Indemnity (P&I) / liability insurance: Covers the ship owner's legal liability to third parties for injury, death, or damage caused by the ship, and for pollution.
4. Cargo insurance: Covers loss of or damage to the goods carried on the ship while in transit, protecting the interest of the owner of the goods.

Other acceptable policy: crew (personal accident) insurance covering injury or death of the crew.

(b) Indemnity and non-indemnity insurance

Indemnity insurance restores the insured to the exact financial position he was in before the loss, without allowing him to make a profit. The compensation is measured by the actual loss suffered. Examples: fire insurance and marine (cargo) insurance.

Non-indemnity insurance pays an agreed fixed sum on the happening of the insured event, because the subject matter (human life) cannot be valued in money terms. Examples: life assurance and personal accident insurance.

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(a) Five aims for establishing ECOWAS (Economic Community of West African States)

1. To promote free trade among member states: ECOWAS aims to remove trade barriers such as tariffs and quotas so that goods can move freely within the sub-region.
2. To promote economic cooperation and integration: It seeks to unite the economies of member states for faster development.
3. To ensure free movement of persons, goods and capital: Citizens of member states can move, live and do business across borders without unnecessary restrictions.
4. To raise the standard of living of member states' citizens: Through joint development projects and trade, it aims to improve incomes and welfare.
5. To promote joint development of infrastructure and cooperation in areas such as transport, communication, industry and agriculture: Member states pool resources to develop common facilities.

(Maintaining peace, stability and security in the sub-region is also acceptable.)

(b) Five aims for establishing the IMF (International Monetary Fund)

1. To promote international monetary cooperation: The IMF provides a forum for member countries to consult on monetary matters.
2. To promote exchange-rate stability: It works to maintain orderly exchange arrangements and avoid competitive devaluation of currencies.
3. To grant loans to member countries with balance-of-payments problems: It provides financial assistance to help members correct deficits without resorting to harmful measures.
4. To promote the expansion and balanced growth of international trade: By stabilising currencies, it encourages the growth of world trade.
5. To provide technical and financial advice to member countries: It advises members on sound economic and monetary policies.

(Assisting in the establishment of a multilateral system of payments is also acceptable.)

Awọn alaye Idahun

(a) Five ways by which the Central Bank regulates the activities of commercial banks

1. Open market operations (OMO): The Central Bank buys or sells government securities in the open market to increase or reduce the amount of money in the hands of commercial banks, thereby controlling their ability to lend.
2. Bank (discount) rate policy: By raising or lowering the rate at which it lends to commercial banks, the Central Bank makes credit dearer or cheaper and so controls the volume of lending.
3. Cash reserve/liquidity ratio requirement: It compels commercial banks to keep a certain proportion of their deposits as reserves, which limits the amount they can lend out.
4. Special deposits (special directives): The Central Bank may require commercial banks to lodge additional deposits with it, reducing the funds available for lending.
5. Moral suasion and direct directives: It appeals to or directs banks to follow particular lending policies, such as favouring priority sectors like agriculture.

(Selective credit control and issuing guidelines/regulations are also acceptable.)

(b) Five factors a bank manager considers in granting loans to customers

1. Character (integrity) of the borrower: The manager considers the honesty and past record of the customer in repaying debts.
2. Capacity to repay: He assesses the customer's income and ability to repay the loan with interest.
3. Collateral security: He requires assets such as land, buildings or shares that can be sold to recover the loan if the customer defaults.
4. Purpose of the loan: The manager examines whether the loan will be used for a viable and lawful venture that can generate returns.
5. Capital of the borrower: He considers the customer's own contribution or net worth in the venture, as this shows commitment and reduces risk.

(The period of repayment and prevailing economic conditions are also acceptable.)

Awọn alaye Idahun

(a) Difference between industry and commerce

Industry is concerned with the actual production of goods and provision of direct services, that is, the extraction of raw materials, their processing and manufacture into finished goods, and construction. Commerce is concerned with the distribution and exchange of goods and services and all the activities that aid this distribution. In short, industry produces the goods while commerce makes them available to consumers where and when they are needed.

(b) Five types of commercial occupations and three types of industrial occupations

Commercial occupations

1. Trade: The buying and selling of goods, including home trade (retail and wholesale) and foreign trade (import and export).
2. Banking: Provides finance, accepts deposits, grants loans and aids the settlement of debts.
3. Insurance: Provides protection against risks and losses to business and property.
4. Transport (transportation): Moves goods and people from one place to another, creating place utility.
5. Advertising and communication: Informs and persuades customers about goods and services and links buyers with sellers.

(Warehousing is also acceptable as a commercial occupation.)

Industrial occupations

1. Extractive industry: Draws raw materials from nature, for example mining, fishing, farming and lumbering.
2. Manufacturing (constructive/genetic) industry: Converts raw materials into finished or semi-finished goods, for example making textiles, cement and vehicles.
3. Construction industry: Assembles materials to build roads, bridges, dams and houses.