Get premium membership and access revision papers, questions with answers as well as video lessons.

Got a question or eager to learn? Discover limitless learning on WhatsApp now - Start Now!

Bbm 212: Intermediate Macroeconomics Question Paper

Bbm 212: Intermediate Macroeconomics

Course:Intermediate Macroeconomics

Institution: Maasai Mara University question papers

Exam Year:2013

MAASAI MARA UNIVERSITY
REGULAR UNIVERSITY EXAMINATIONS
2013/2014 ACADEMIC YEAR
SECOND YEAR SECOND SEMESTER

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

INTRUCTIONS TO CANDIDATES
Answer Question ONE and any other TWO questions
QUESTION ONE
(a)-What is a balanced-budget multiplier? (2mks)
-Show that the balanced budget multiplier is always equal to unity (4mks)
(b)-Suppose the product-market model is given as C=100+0.75Y; S=-100+0.25Y; and I=120-0.5i,and money-market model is given as Ms=150 and Md=0.2Y-4i. Find equilibrium Y and i. Assume a lump-sum tax of 20, find the effect of tax eqiilibrium level of Y and i. (8mks)
-Explain the relationship between money market and product market. (6mks)
(c)Explain the monetary policy transmission mechanism in the process of attaining monetary goals. (10mks)
QUESTION TWO
For the following statements,state if TRUE,FALSE,UNCERTAIN, and explain your answer.
-The marginal propensity to consume and marginal propensity to save sum up to one. (4mks)
-The marginal propensity to consume is less than the average propensity to consume as the consumer income increases. (4mks)
-Ratchet effect is same as demonstration effect. (4mks)
-At the sunset years of an individual''s life,consumption is greater than income. (4mks)
-Transitory income and Transitory consumption are correlated. (4mks)
QUESTION THREE
(a)Using Mundell-Fleming Model,explain the effect of expenditure switching policy on national income under a fixed exchange regime and perfect capital mobility. (12mks)
(b)-Distinguish between natural rate of unemployment and cyclical unemployment. (4mks)
-Illustrate the trade-off between inflation and unemployment. (4mks)
QUESTION FOUR
(a)By providing a clear criteria for investment decisions,discuss the following investment theories
-Marginal Efficiency of Capital (5mks)
-Tobin''s-q Theory of investment (5mks)
(b)Illustrate the derivation of the goods market (10mks)

……………………………END………………………

Bbm 212: Intermediate Macroeconomics Question Paper

More Question Papers

Popular Exams