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Eco 111/102: Introduction To Macroeconomics Question Paper

Eco 111/102: Introduction To Macroeconomics

Course:Bachelor Of Commerce

Institution: Kaimosi Friends University College question papers

Exam Year:2017

KAIMOSI FRIENDS UNIVERSITY COLLEGE
( KAFUCO)

UNIVERSITY EXAMINATIONS
2016/2017 ACADEMIC YEAR

FIRST YEAR SECOND SEMESTER EXAMINATIONS FOR THE DEGREE OF COMMERCE

COURSE CODE:ECO 111/112

COURSE TITLE: INTRODUCTION TO MACROECONOMICS

DATE:21ST JULY,2017
TIME:2-4 PM

INSTRUCTIONS TO CANDIDATES

ANSWER QUESTION ONE( COMPULSORY) AND ANY OTHER TWO QUESTIONS

QUESTION ONE

a. An open economy is described by the following function

C= 56+0.8Y^d

G=800

I=400

T=20+ 0.1Y

X= 20

M=80+ 0.2Y

Determine its national income. 8 marks

b. State and explain any two factors that cause the shifts in the balance of payments curve. 4 marks

c. What are the policies that can be used to curb unemployment in Kenya. 5 marks

d. State the principal functions of money. 4 marks

e. A certain economy has got the following consumption function,
C=100+0.75Y,determine the multiplier and interpret your answer. 5 marks

f. Explain two determinants of investments. 4 marks

QUESTION TWO

a. National income accounting is very paramount to any country that is conscious about its growth and development.Discuss five limitations in estimation of national income. 10 marks

b. Explain five options that can be used by Kenyan government in dealing with excess money in circulation. 10 marks

QUESTION THREE

a. State and explain the methods that can be used by a country to correct the trade deficit. 10 marks

b. Sometimes countries that are developing can resort to taking up measures to protect their young industries against foreign multinational.Discuss the forms of protection that can be used by such a country. 10 marks

QUESTION FOUR
a. In the recent years Kenya has been experiencing inflation tendencies that have eroded the value of money thereby making people worse off
i. Discuss by use of examples the various types of inflation. 10 marks

ii. Explain the various ways of dealing with the above problem. 10 marks

Eco 111/102: Introduction To Macroeconomics Question Paper

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