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Bcom 331: Money And Banking Question Paper

Bcom 331: Money And Banking

Course:Bachelor Of Commerce

Institution: Chuka University question papers

Exam Year:2013

CHUKA

UNIVERSITY

UNIVERSITY EXAMINATIONS

THIRD YEAR EXAMINATION FOR THE AWARD OF DEGREE OF
BACHELOR OF COMMERCE

BCOM 331: MONEY AND BANKING

STREAMS: BCOM Y3S1 TIME: 2 HOURS

DAY/DATE: MONDAY 12/8/2013 2.30 P.M. – 4.30 P.M.
INSTRUCTIONS:

1. Answer question 1 (compulsory) and any other two questions.
2. Question 1 carries (30 marks) while the other questions carry (20 marks) each.
3. Do not write on the question paper.

1. (a) “Money is what money does”, critically examine the statement. [10 marks]

(b) Explain the evolution of money. What are the important stages in the
evolution of money? [10 marks]

(c) Using Pigou’s equation in the Cambridge approach or Cash balance,
find out P and total quantity of money given K = ¼, C = ½, H = , R = 2000 quintals of rice, M = Kshs 550. Express the equation diagrammatically too.
[10 marks]

2. (a) Money is a good servant, but a bad master. Comment. [10 marks]

(b) Using the Fisher’s equation or Transactions approach calculate the value of money given M = 100, V = 8, M’ = Ksh 200, V’ = 400. Calculate too the
value of money when M is doubled. [10 marks]

3. (a) Explain the overall responsibility of a Central Bank and discuss the various
functions of Central Bank. [10 marks]

(b) explain the instruments of monetary policy. What are their limitations in developing countries? [10 marks]

4. (a) Equity bank started out as a non-banking institution, What are their roles in
Kenya.? [10 marks]

(b) Trace the development and impact of the banking system in Kenya. [10 marks]

Bcom 331: Money And Banking Question Paper

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