Correct Answer: D. Differences in natural resources

Explanation

One of the major reasons for trade is the difference in the natural resources of each country. No country is an island of its own, no matter how efficient its production factors may have been utilized. There is always going to be something the region needs and may have to source for it from its neighbors.

Correct Answer: D. face value

Correct Answer: A. Textiles

Correct Answer: C. minimum lending rate

Explanation

(a) Characteristics of a limited liability company are:

(i) The liability of the owners is limited to their investment in the company.

(ii) The company is a legal entity; as a result, it can sue and be sued.

(iii) The affairs of the company is managed by Board of Directors as ownership is separated from management.

(iv) In case of liquidation, the company's assets will be used to settle debts.

(v) The company's authorized capital is divided into shares.

(vi) The affairs of the company are governed by memorandum and article of association, formation or incorporation.

(vii) Dividend is based on the number of shares owned/Return on investment is called dividend.

(viii) The shares are quoted on the stock exchange in case of Public Limited Company while the shares are not quoted in case of Private Limited Company.

(ix) The company must have a registered office.

(x) Death of a shareholder will not lead to the end of the company.

(xi) The owners are called shareholders.

(b) Sources of funds to a public limited company are:

(i)Debentures: This is a loan which had security backing it up. Debenture holders are creditors.

(ii)Retained Earnings: Companies may decide not to distribute all their profits as dividend so that they can plough back the money for growth.

(iii)Leasing: This is a method of buying equipment through a company/bank. The bank will buy the equipment in its own name and lend the equipment out for lease or rent.

(iv) Trade Credit: This is a process of buying items for sale on credit from suppliers.

(v) Borrowing from Banks could be through loans or overdraft.

(vi) Factoring of debt: This is the process of companies selling off their debts for cash now.

(vii) Raising of funds from the Capital Market/Selling of shares.

(viii) Selling of company's asset: A company can sell any of its assets to raise funds.

Correct Answer: C. exchange of goods for goods

Explanation

(A) Transport is important to commerce in the following ways:

(i) Transport facilitates the movement of goods and persons.

(ii) It conveys raw materials and capital goods to production sites.

(iii) It increases the volume of trade by widening the markets for various products thereby leading to economic growth and development.

(iv) It facilitates import and export of goods and services.

(v) It influences the location of industries in a particular place.

(vi) It encourages specialization which results in more and cheaper goods, thus increasing the standard of living.

(B) The Advantages of Air Transport are:

(i) It is a fast method of transport.

(ii) The danger of damage to delicate fragile and perishable goods is reduced.

(iii) The cost of insurance of goods by air is reduced because of the shorter time the insurance company is at risk.

(iv) It is a more comfortable means of transport hence suitable for long journeys.

(v) Less handling is required for goods being transported by air/pilfering is reduced.

(vi) Markets are extended as distant markets are reached in matters of minutes or hours by air transport.

(vii) The rate of accident is minimal.

Disadvantages of Air Transport are:

(i) It is a very expensive method of transport/high cost of freight.

(ii) The speed of air transport is often offset by delays at the air terminals.

(iii) Weather conditions can severally upset air transport.

(iv) Flights are usually on fixed schedule, not flexible, which may not always suit the businessman.

(v) It is unsuitable for the transport of certain kinds of goods, e.g. heavy machinery.

(vi) Accidents, when they occur, are generally disastrous.

(vii) It requires trans-shipment/It does not provide door-to-door services.

(viii) it is capital intensive as much capital is needed to buy aircraft, build and maintain airports.

Correct Answer: B. creation of utility

Correct Answer: D. bill of exchange

Correct Answer: D. Quality of product