MAASAI MARA UNIVERSITY
REGULAR UNIVERSITY EXAMINATIONS 
2016/2017 ACADEMIC YEAR
SECOND YEAR SECOND SEMESTER 

SCHOOL OF BUSINESS AND ECONOMICS
BACHELOR OF BUSINESS MANAGEMENT
COURSE CODE: BBM 212
COURSE TITLE: INTERMEDIATE MACRO
                                ECONOMICS

DATE: 28TH APRIL 2017			                                                 TIME: 8.30AM-10.30AM
INSTRUCTIONS TO CANDIDATES
•	Answer question ONE (compulsory) and any other THREE 
•	Question one carries 25 marks
•	All other questions carry 15 marks
                                            This paper consists of 2 printed pages. Please turn over

QUESTION 1	

a)	Outline the relationship between macroeconomics and micro-economics 
                                                                                                                                           (4marks)

b)	Briefly state the relationship between consumption and permanent income 
                                                                                                                                           (5marks)

c)	State the criticism of employment according to Keynes                                   (4marks)

d)	Distinguish between autonomous investment and induced investment    (6marks) 

e)	Describe the term inflation and state two types of inflation                            (6marks)

QUESTION 2	

a)	Highlight and explain the components of social accounting                   (7marks)

b)	Discuss the Keynesian theory of employment                                              (8marks)

QUESTION 3	

a)	Explain in detail the comparison between classical model and Keynesian model of income determination                                                                                       (6marks)

b)	Discuss the motives for holding money according to Keynes                (5marks)

c)	 What are the factors that determine the money held under these motives in (b) above                                                                                                                (4marks)

QUESTION 4	

a)	Distinguish between current account and capital account of the balance of payment and its relevance to the economy                                                     (15marks)

QUESTION 5	

a)	Explain the factors that influence the level of investment in economy    (8marks)

b)	Critically examine Domar’s steady growth model                                            (7marks)