JAMB Economics 1981 Question 31

Question 31

National Income

Sector 1 (Agriculture): share in National Output 25%, share in total Employment 60%, growth rate of Sectoral Output 2%
Sector 2 (Manufacturing and Crafts): share in National Output 10%, share in total Employment 10%, growth rate of Sectoral Output 5%
Sector 3 (Petroleum and Mining): share in National Output 50%, share in total Employment 5%, growth rate of Sectoral Output 10%
Sector 4 (Services): share in National Output 15%, share in total Employment 25%, growth rate of Sectoral Output 3%
From the above, the growth rate of Total National Output or GDP is

  1. A.6.45% i.e. (25x2+10x5+50x10+15x3)/100%
  2. B.20.0%, i.e. (2+5+10+3)%
  3. C.2.95%, i.e. (60x2+10x5+5x10+25x3)/100%
  4. D.5.0%, i.e. (2+5+10+3)/4%
  5. E.not obtainable.
Show the answer and explanation

Answer: A (6.45% i.e. (25x2+10x5+50x10+15x3)/100%)

Explanation

Each sector's growth counts according to its share of national output: (25×2 + 10×5 + 50×10 + 15×3) ÷ 100 = 645 ÷ 100 = 6.45%. A simple average ignores that petroleum is half of output.