Ordinary level 2026 Littoral regional mock Economics guide

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Question 1

a. i) Distinctions between Current Account and Deposit Account:

• With a current account, holders can withdraw from their account without prior notice while with a deposit account, the account holder must notify the bank.

• Current account does not earn interest while deposit account earns interest.

• With a current account, money can be withdrawn with the use of a cheque while with a deposit account, money can be withdrawn with the use of a passbook.

  (Any one correct distinction with conjunction = 2 marks)

ii) Bank Rate vs. Cash Ratio:

• Bank rate is the rate of interest at which the Central bank is prepared to lend money to the commercial banks and other financial institutions while cash ratio refers to the proportion of cash to total deposits which is reserved by commercial banks to meet customers’ demand for cash.

  (With conjunction = 2 marks)

b. Commercial banks acts as agents of payment in the following ways:

• Standing Order

• Credit transfer

• Debit cards

• Credit cards

• Cash dispenser

• Cheques

  (Any 4 well explained = 4×2 = 8 marks)

c. Those who lose during inflation include:

• Fixed income earners

• Creditors

• Savers

• Preference share holders

• Consumers

  (Any 4 well explained = 4×2 = 8 marks)

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Question 2

a. i) Currency Depreciation vs. Appreciation:

• Currency depreciation refers to a reduction in the exchange value of a currency caused by changes in demand and supply of the currency while currency appreciation is an increase in the exchange value of a currency caused by the forces of demand and supply of the currency.

  (With conjunction = 4 marks)

ii) Reasons for trade restrictions include:

• Protect infant industries.

• Prevent dumping.

• Avoid over dependence.

• Strategic reasons.

• Increase employment.

• Raise revenue.

• Correct unfavourable BOP (Balance of Payments), etc.

  (Stating 1 = mark and explanation 1 = mark = 4×2 = 8 marks)

c. Advantages of international trade include:

• Increase in the volume of world trade.

• Increase in standards of living.

• Economies of scale.

• Large market.

• Promotes international competition.

• Creates employment.

• Reduction in prices.

• Transfer of technology.

• International peace and cooperation, etc.

  (Any 2 points well explained 2×2 = 4 marks)

Disadvantages include:

• Dumping.

• Over dependence.

• Importation of harmful goods.

• Depletion of natural resources.

• Unemployment.

• Collapse of infant industries.

• Over exploitation of natural resources.

• Rivalry, etc.

  (Any 2 points well explained 2×2 = 4 marks)

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Question 3

ai) A private limited company is a company owned by private individuals with membership ranging from 2 to 50… (text cuts off)