NECO 2002 Economics · Question 40

Government expenditure on universal basic education and subsidy on agriculture are aimed at

Options

  1. A.encouraging growth of the economy
  2. B.projecting images of government
  3. C.re-allocation of resources
  4. D.redistribution of income and wealth
  5. E.stabilization of the economy

Answer: D. redistribution of income and wealth

Explanation written with AI and checked against the answer key

Step 1: Analyze the question We are asked about the aim of two government spending items: universal basic education (UBE) and agricultural subsidies. We need the common objective behind both.

Step 2: Explain the concept Governments spend for several economic purposes:

  • Resource re-allocation: shifting resources toward certain sectors, usually to correct market failures.
  • Stabilization: controlling inflation, unemployment and business cycles.
  • Growth: raising national output over the long term.
  • Redistribution of income and wealth: transferring benefits to the poor or disadvantaged, often through free or subsidized services and grants.

Step 3: Apply to the items

  • Universal basic education is provided free or at low cost. It benefits mostly poorer families who could not otherwise afford schooling. Wealthier households pay more in taxes, while poorer households receive the benefit. This is a classic example of redistribution.
  • Agricultural subsidies lower farmers' costs, and most farmers in Nigeria are low-income, rural and small-scale. The subsidy transfers income to them, which also redistributes income.

Both are social or welfare expenditures that transfer real income from the better-off, through taxation, to lower-income groups.

Step 4: Check the other options

  • A (growth): both can contribute to growth indirectly, but that is a long-term side effect, not their primary aim as a pair.
  • B (projecting government's image): not an economic objective.
  • C (re-allocation): possible for subsidies, but it does not fit free basic education as well as redistribution does.
  • E (stabilization): this concerns inflation and employment cycles, so it does not apply here.

Correct answer: D, redistribution of income and wealth

Tip: In NECO and WASSCE Economics, whenever you see free or subsidized public services (education, health, subsidies, social welfare), think "redistribution of income." If you see taxes and interest rates used to control inflation or unemployment, think "stabilization."

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