2019 Advance NABTEB GCE Commerce Questions and Answers

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NABTEB GCE Advance Commerce Questions and Answers





Marketing consists of the performance of business activities that direct the flow of goods and services from the producer to the consumer or users in order to satisfy customers and accomplish the company’s objectives. Marketing creates time,place and possession.

A consumer is an individual who makes the final use of goods and services provided by a firm. This consists of the purchase in the household who intend to consume or benefit from the purchased products and who do not buy products for the main purpose of making profit.

Product life cycle is the progression of an item through the four stages of its time on the market. The four life cycle stages are: Introduction, Growth, Maturity and Decline. Every product has a life cycle and time spent at each stage differs from product to product.

Trade restrictions are taxes or duties imposed on imports and exports by the government  of a country . The idea behind  trade restrictions is to restrict the volume of trade or improve the international terms of trade.

(i) A company and employees don’t share goals and values.
(ii) A company don’t appreciate employees efforts/employee feel underpaid and unrecognized.
(iii) The workplace environment is not healthy
(iv) The communication are impeded within a company  e.g in multileveled company structure.

Confirmed irrevocable letter of credit (L/C)is the  letter of credit  that adds the endorsement of a seller’s bank (the accepting-bank) to that of the buyer’s bank (the issuing bank). WHILE An unconfirmed irrevocable letter of credit provides a commitment by the issuing bank to pay, accept, or negotiate a letter of credit.

Visible trade, involved exchange of physically tangible goods between countries, involving the export, import, and re-export of goods at various stages of production WHILE Invisible trade involved  exchange of physically intangible items between countries. Basic categories of invisible trade include services (receipts and payments arising from activities such as customer service or shipping); income from foreign.

Money market : Money market can be defined as a market for short term loan. The market consists of institutions or individuals who either have money to lend or wish to borrow on a short term basis.

Capital market: Capital market is a market for medium term and long term loans . The capital market serves the needs of industry and the commercial  sector .it comprises all the institutions which are concerned with either the supply of or demand for long term capital.

Bear : This is a speculator who expects prices of securities to fall before delivery dates and thus sells out to make good profit .Bear is name given to a speculator who sells stock in anticipation of a fall in prices of securities

Stag:A stag is a speculator who applies for new issues of shares and stock in large quantity with the feeling or anticipation that price of the shares will rise above the offer price. The stag hopes to make profit after selling.

[Choose any two]
(i) Acceptance of deposit :mortgage banks accept deposit from customers in order to encourage savings towards owning a house
(ii) Provision of long term loan: They also provide long term loans to people or to estate developers to build house.
(iii) Development of mortgage institution : They supervise and  encourage the development of mortgage institutions
(iv) Provision of houses: Mortgage banks also involved in the construction of houses and offer them for sales to the people



Balance of trade refers to the total value of goods sold and brought by a country during a given period ,usually a year WHILE balance of payments is a statement or  record showing the relationship between a country’s total payments to other countries and its total receipt from them in a year.

(i) preventing and suppressing smuggling.
(ii) Revenue collection
(iii) collection of trade statistics
(iv) preventing illegal imports and exports.

A budget may be defined as a financial statement of the total estimated revenue and the proposed expenditure of a government in a given period of time,usually a year.

(i)Balance budget:A balance budget of a government is a budget with revenue equal to expenditure. In other words,balance budget occurs when the total estimated revenue of a government equal to the proposed expenditure.

(ii)Surplus budget: A budget surplus occurs when government spending is less than government revenue in a given period of time. In order words,a budget is called surplus,when the total estimated revenue is more than the proposed expenditure.

(iii)Deficit budget: A budget deficit occurs when the government spending exceeds government revenue in a given period of time,usually a year. In other words,a budget is called deficit when the government’s total proposed expenditure for a period of time is more than the total estimated revenue.

Fiscal policy may be defined as the use of income and expenditure instruments or policies to control or regulate the economic activities in a country.

(i) Taxes:Government generates income or revenue by taxing individuals or corporate bodies
(ii) loans :Government can obtain loans from both the internal and external sources e.g World bank
(iii) Grants and aids:Government can recieve grants and aids as revenue from wealthy or developed countries
(iv) licence: Government can generate revenue through licence e.g drivers licence.
(v)Rents and rates: Earnings from water,properties ,housing etc owned by the government are sources of income to the government.

Air waybill (AWB): Airway bill is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked. The bill has multiple copies so that each party involved in the shipment can document it. An air waybill (AWB), also known as an air consignment note, is a type of bill of lading.

Certificate of insurance (COI): Certificate of insurance  is issued by an insurance company or broker. The COI verifies the existence of an insurance policy and summarizes the key aspects and conditions of the policy. For example, a standard COI lists the policyholder’s name, policy effective date, the type of coverage, policy limits, and other important details of the policy.

Shipping note:Shipping note is a document sent to the shipping agent by the exporter. The document contains instructions for transporting the goods. It is request to the shipping company to transport the goods to a named destination at a particular time. If the forwarding agent handles shipment ,it has to obtain a shipping note to request a shipping company to transport the goods.

Dock warrant is an instrument issued by a ware housekeeper, licensed by the state to traders who deposit goods with them. A dock warrant certifies that the holder is entitled to goods imported and warehoused in the docks. It transfers the absolute right to the goods described in it. This document is also known as dock receipt.

(i) To protect infant industries:Tariffs are imposed to protect infant industries from undue competition with foreign firms

(ii)Generation of revenue: Tariffs are also imposed to generate revenue for the country. Many countries derive their revenue from import and export duties

(iii)To prevent dumping: Tariffs are imposed to prevent dumping of goods from foreign countries. This is to prevent foreign goods from  being sold at prices lower than the home price.

(iv)To improve balance of payments deficit: By imposing tariffs on imported goods,the unfavourable balance of payments can be corrected because importation will be discouraged.


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