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Money And Banking Question Paper

Money And Banking

Course:Bachelor Of Commerce (Commerce)

Institution: Kabarak University question papers

Exam Year:2012

KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2011/2012 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF BUSINESS EDUCATION
BUSED 421: MONEY AND BANKING
DAY: FRIDAY

DATE: 17/08/2012
TIME: 8.00 – 10.00 A.M.
STREAM: Y4S2
INSTRUCTIONS:
? Attempt question ONE and any other TWO questions.
QUESTION ONE
a) There are various types of legal tender money. Citing examples, distinguish between them
in currency used in Kenya. (6 mks)
b) The central bank of Kenya’s monetary policy committee has been making certain
pronouncements regarding certain banking policies. Discuss the goals of monetary policy
(8 mks)
c) In its static role, the importance of the money lies in removing the difficulties barter. Discuss
how the use of money overcomes those difficulties. (6 mks)

d) In the budget read in parliament by the minister of finance for the year 2012/2013, there is
a budget deficit. Explain in detail how the government intends to bridge this gap (10 mks)
(30 mks)

Page 1 of 2

QUESTION TWO
a) The inflation rates in Kenya had reached a high of about 20% towards the end
of 2011.Discuss the causes and effects of this high inflation on the economy of Kenya
(10 mks)
b) There are various ways that can be employed to control inflation. Discuss the various ways which
can be employed by the monetary authority or government to control inflation (10 mks)
(20 mks)

QUESTION THREE
a) Commercial banks not only perform the core functions of accepting deposits and lending but
also offer other services such as the agency services. Explain the main agency services they
offer to their clients. (4mks)
b) Among the recent innovations in the banking sector is the introduction of mobile money.
Discuss the possible effects of this innovation on Kenya’s banking industry (6mks )
c) Commercial banks perform a variety of functions in Kenya’s economy. Discuss them
(10 mks)

QUESTION FOUR
a) The central bank in a developing economy performs both traditional and non-traditional
functions. Discuss the role of central bank in a developing economy. (12 mks)
b) The central bank and commercial banks are important institutions that deal with money.
Discuss the differences between central bank and commercial banks (8 mks)
(20 mks)

Page 2 of 2

Money And Banking Question Paper

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