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Bcom202:Intermediate Macroeconomics Question Paper

Bcom202:Intermediate Macroeconomics

Course:Bachelor Of Commerce

Institution: Chuka University question papers

Exam Year:2011

INSTRUCTIONS:
o Answer question One and other two questions. o Do not write on the question paper.
1. (a) Explain the main objectives of macroeconomics. [4 marks]
(b) Explain the main monetary policy instruments. [4 marks]
(c) Write short notes on the following:
(i) Supply side economics [2 marks] (ii) Keynesian economics [2 marks] (iii) Say’s Law of Markets [2 marks]
(d) The following data characterize the macroeconomic conditions of a hypothetical economy.
Y = C + I + q C = 100 + 0.8 Yd T = 10 + 0.1 Y I = 50 G = 30
Required: (i) Find equilibrium income, consumption and tax given the above model. [4 marks]
(ii) What is the value of multiplier? [1 mark]
2
(e) Explain the Keynesian theory of consumption. [5 marks]
(f) Consider the following investment equation
Kt – Kt-1 = V(Yt – Yt-1)
(i) What does Kt – Kt-1 represent? [1 mark] (ii) What does V stand for? [1 mark] (iii) Interpret the above equation when V = 3. [1 mark]
(g) (i) Explain Keynes’s theory of demand for money. [3 marks] (ii) Explain Keynes’s view of aggregate demand for money. [1 mark]
2. (a) Explain the importance of money supply. [2 marks] (b) Explain the concept of money supply. [2 marks] (c) Describe four measures of money supply. [8 marks] (d) Discuss the determinants of money supply. [8 marks]
3. (a) Explain the terms balance of trade and balance of payments. [2 marks]
(b) Discuss the causes of disequilibrium in the balance of payments. [8 marks]
(c) Explain how disequilibrium in the balance of payments can be corrected. [6 marks]
(d) Differentiate the terms flexible and fixed exchange rate. [2 marks]
(e) Explain the effects of depreciation on imports and exports of a country. [2 marks]
4. (a) Discuss the effects of inflation in an economy. [10 marks]
(b) Explain measures that can be put in place to control inflation in your country. [10 marks]
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Bcom202:Intermediate Macroeconomics Question Paper

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