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Eco 111: Introduction To Macroeconomics Question Paper

Eco 111: Introduction To Macroeconomics

Course:Bachelor Of Business Administration

Institution: University Of Kabianga question papers

Exam Year:2016

SCHOOL OF BUSINESS AND ECONOMICS

Department of Accounting, Finance and Economics.

2016/2017 Academic Year

FIRST YEAR FIRST SEMESTER EXAMINATION

FOR THE DEGREE OF BACHELOR OF BUSINESS MANAGEMENT.

ECO 111: INTRODUCTION TO MACROECONOMICS.

INSTRICTIONS:

Answer question ONE and any other THREE questions.

1.Question One (Compulsory)25 Marks

(a) Explain the meaning of the following terms as used in economics.

(i) Philips's curve. (2 Marks)

(ii) Paradox of Thrift (2 Marks)

(iii) Leakages. (2 Marks)

(iv) Injections (2 Marks)

(v) Ratchet effect. (2 Marks)

(b) Briefly explain the major aims of macro economics. (5 Marks)

(c) Using a well labelled diagram, illustrate the circular flow of income in a closed economy. (4 Marks)

(d) Consider the following consumption function.

C=300+0.65Y

(i) Define and plot the consumption function. (2 Marks)

(ii) Define and explain what 300 represents. (2 Marks)

(iii) Derive the savings function. (2 Marks)

2.Question Two: 15 Marks

(a) Using the expenditure approach,derive the IS equation. (5 Marks)

(b) The Kenyan economy has been recording a positive and an increasing trend in its economic growth from 2003,explain whether this reflects an improvement in the material well being of its people. (10 Marks)

3.Question Three: 15 Marks

(a) Distinguish between classical and Keynesian theories of money. (6 Marks)

(b) Explain any three types of inflation. (6 Marks)

(c) State determinants of the amount of money held for transaction purposes. (6 Marks)

4.Question Four: 15 Marks

(a) Define money markets.Describe four roles of commercial banks in an economy. (9 Marks)

(b) Discuss three ways of alleviating the unemployment problems in developing economies. (6 Marks)

5.Question Five: 15 Marks

(a) Differentiate between monetary and fiscal policy. (4 Marks)

(b) What is meant by the term balance of payment? (3 Marks)

(c) Discuss four problems experienced by a country with a balance of payment deficit. (8 Marks)

Eco 111: Introduction To Macroeconomics Question Paper

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