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Economics Question Paper

Economics

Course:

Institution: Nairobi Technical Training Institute question papers

Exam Year:2013

this paper consist of seven questions
answer any five questions from this opaper.

1.(a) Highlight the funcions of the central bank in a country. (12 marks)

(b) The world bank has reduced its assuistance to some less developed countries in the
the recent past. Explain the reasons that may account for this situation. (8 marks)

2.(a) The price of commodity X has been rising in the past four months, yet its supply has
increased. Explain the factors that m,ay account for this trend. (10 marks)

(b) One of the basic economic question is what to produce. Highlight the factors that may
influence the choice of what to produce. (10 marks)

3.(a) Explain the reasopns that mauy make firms to encourage its labour to specialise in a
particular ara of skill. (10 marks)

(b) With the aid of a diagram, explain the relationship between marginal revenue and
average revenue of a firm operating under perfect competition. (10 marks)

4.(a) The rural communities in Kenya have a reputation of low savings with commercial banks.
Highlight the measures that the banks should take to encourage savings among these
communities. (10 marks)

(b) Explain the disadvantages of raising government revenue through direct taxes. (10 marks)

5.(a) Explain the reasons why firms may choose to operate in small scale despite the benefits
of larg scale operation. (10 marks)

(b) Explain the circumstances under which the government may find it necessary to impose
restrictions on its imports. (10 marks)

6.(a) Outline the assumptions of the law of diminishing returns to scale. (10 marks)

(b) Explain the reasons why a less developed economy would wish to engage in international
trade. (10 marks)

7.(a) The industrial distribution in less developed countries tend to be highly localised in
the major urban centres. Highlight the factors that may account for this situation. (8 marks)

(b) Explain the measures that a government would take to stimulate investment in an
economy. (12 marks)

Economics Question Paper

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