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Aec 307 Public Finance Question Paper

Aec 307 Public Finance

Course:Alternative Dispute Resolution

Institution: Kenyatta University question papers

Exam Year:2009

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2008/2009
INSTITUTE OF OPEN LEARNING (IOL)
EXAMINATION FOR THE DEGREE OF BACHELOR OF ECONOMICS

AEC 307:
PUBLIC FINANCE

DATE: Monday, 10th August, 2009
TIME: 11.00 a.m. ? 1.00p.m.
------------------------------------------------------------------------------------------------------------
INSTRUCTIONS:
Answer question ONE and any other TWO questions.
Q.1
a)
Explain in details the following objectives of the government suggesting
possible policies that can be adopted in each case
i)
Allocation
(4
marks)
ii)
Distribution
(4
marks)
iii)
Stabilization
(4
marks)
iv)
Economic
growth
(4
marks)

b)
Explain the reasons that justify the allocation function of the government

(14 marks)

Q.2
a)
Discuss the economic consequence of the growth of public expenditure in
an
economy
(10
marks)
b)
What are the sources and restraint to the growth of public expenditure
(10 marks)

Q.3
a)
The two main theories of taxation are the benefit and ability to pay. With
reference to Kenya explain each one of the m stating its limitations

(10 marks)
Page 1 of 2

b)
Explain the factors that determines the taxable capacity of a country
(10 marks)

Q.4
a)
Explain the determinants and financing of the public sector borrowing
Requirements
(10
marks)

b)
Discuss the various costs associated with a development project of an
irrigation
scheme
(10
marks)

Q.5
Write short notes on the following:-

i)
Tax incidence

(4 marks)
ii)
Tax
burden
(4
marks)
iii)
Market
failure
(4
marks)
iv)
Free-rider
problem
(4
marks)
v)
Non-rival
ness
(4
marks)

Page 2 of 2

Aec 307 Public Finance Question Paper

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