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Cfu 103: Introduction To Macroeconomics (Weekend Class) Question Paper

Cfu 103: Introduction To Macroeconomics (Weekend Class)

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

1
UNIVERSITY EXAMINATIONS: 2008/2009
FIRST YEAR STAGE III EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFU 103: INTRODUCTION TO MACROECONOMICS (WEEKEND CLASS)
DATE: APRIL 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Explain the problems experienced in estimating national income (6 Marks)
b) Using a diagram explain the circular flow of income in a two sector model (6 Marks)
c) Highlight the fiscal policies a country can adopt to control inflation (8 Marks)
d) Define the term multiplier effect (2 Marks)
e) The following information is from the national income accounting for hypothetical
country for the year 2009
Billions
Gross Domestic Product (GDP) $1692
Net Factor Income Abroad $58
Depreciation Allowance $180
Indirect Taxes Less Subsidies $163
Social Security Contribution $123
Business Tax $65
Undistributed Corporate Profit $18
Government Transfer Payment $232
Personal Income Taxes $ 192
Required
i) Gross national product (GNP) (2 Marks)
2
ii) Net national product (NNP) (2 Marks)
iii) Personal income (PI) (2 Marks)
iv) Disposable Income (DI) (2 Marks)
QUESTION TWO
a) Argue for and against international trade protectionism (10Marks)
b) Clearly highlight the advantages and disadvantages of the free floating exchange rate
(10Marks)
QUESTION THREE
a) Describe the main roles played by the commercial banks (8Marks)
b) Explain three types of inflation commonly found in developing countries (8Marks)
c) Using a diagram explain the Phillips curve. (4Marks)
QUESTION FOUR
Write brief notes on the following concepts:-
a) Accelerator principle
b) Comparative advantage
c) Monetary policy
d) Fiscal policy
e) Custom union
(20 Marks)
QUESTION FIVE
a) Recently the government has been emphasizing the concept of export growth led .this has been
well covered by the press and media.
i) What is export led growth (4 Marks)
ii) Explain the impact of export led growth on balance of payment and terms of trade
(8 Marks)
b) In the content of international trade explain the concept of absolute advantage (8 Marks)

Cfu 103: Introduction To Macroeconomics (Weekend Class) Question Paper

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