Economics entrance exam, 2012 E.C. (2020)

The two big earners of foreign currency in Ethiopia's service sector are Ethiopian Airlines and Ethiopian Shipping Lines. They sell transport to foreigners, so the payments come in as hard currency. In 2008/09 the service sector as a whole brought in close to 2 billion dollars, more than the export of goods that year.

The National Museum and the National Lottery earn small amounts and mostly in birr, and Ethio telecom serves domestic subscribers, so none of the other pairs can match those two.

Textbook: Economics Grade 10, Unit 7 The Ethiopian Economy, section 7.5 The Service Sector in the Ethiopian Economy.

Proclamation No. 14/1992 was a liberalisation measure. It ended the tight state control of the Derg era, deregulated the freight transport industry, and allowed free entry into existing transport associations, licensing of new associations, and the promotion of efficiency and equitable distribution of transport services.

The question asks for what the proclamation does not do. Regulation of the freight transport industry belongs to the earlier Proclamation No. 107/1976, so option C is the exception.

Textbook: Economics Grade 11, Unit 7 Main Sectors, Sectorial Policies and Strategies of Ethiopia, section 7.5.3 The Transport Sector.

Ethiopia's clearest transport success is air transport and civil aviation. Ethiopian Airlines flies to more destinations than any other African carrier, runs a large cargo business and has made Addis Ababa the main air hub of the continent.

Road density is still low by African standards, the railway network is short and new, and the light rail is a single city service, so none of the other three can be described as a lead over other African countries.

Ethiopia is a landlocked country. Since it lost direct access to the sea, it moves almost all of its overseas trade through the ports of neighbouring countries, mainly Djibouti, and pays port and transit charges for it. A sea port is therefore not part of the country's resource base.

Rivers and lakes, valuable minerals such as gold and platinum, and a large hydroelectric and geothermal potential are all real Ethiopian resources, so A, C and D are true.

In the population census the two sexes came out almost even: about 50.5 percent male and 49.5 percent female. So the share of females is close to 50 percent, which makes option A the safe statement.

The other three fail on well known facts. Most Ethiopians still live in rural areas, the population is young rather than old, and the literacy rate is far below 80 percent.

The bi modal strategy runs small peasant farms and large commercial farms side by side. Its listed advantages are that it supports individual rights to acquire land, invites capital and technology into farming, promotes large scale diversification and allows the transfer of technology.

Creating off farm jobs is not on that list. The textbook puts the lack of off farm job opportunities among the limitations of the bi modal approach, because peasants pushed off the land have nowhere else to work. That is why A is the exception.

Textbook: Economics Grade 11, Unit 7 Main Sectors, Sectorial Policies and Strategies of Ethiopia, section 7.1.2 Bi-Modal Agricultural Strategy.