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Eco 414: International Economics 1 Question Paper

Eco 414: International Economics 1

Course:Bachelor Of Arts In Economics

Institution: University Of Kabianga question papers

Exam Year:2017

SCHOOL OF BUSINESS AND ECONOMICS.

Department of Accounting, Finance and Economics.

2016/2017 Academic Year.

FOURTH YEAR FIRST SEMESTER EXAMINATION.

FOR THE DEGREE OF BACHELOR OF ARTS (ECONOMICS)

ECO 414: INTERNATIONAL ECONOMICS 1

Instructions: Answer Question ONE and any other THREE.

Question One [25 Marks]

a). Outline any five assumptions of the Ricardian model. (5 Marks)

b). Discuss the weaknesses of the mercantilist theory of trade as pointed out by David Hume that laid the basis for free trade. (4 Marks)

c). Discuss four dynamic benefits that a country may gain by joining a custom union. (8 Marks)

d). Explain any four reasons inhibiting the East Africa community from achieving full integration status- Level Five. (8 Marks)

Question Two [15 Marks]

a). " Globalization is a euphemism for present day free trade crusade of neo-classical economists." Discuss this statement in view of what you have learnt in international economics. (5 Marks)

b). Discuss with relevant examples five reasons why the international trade may be harmful to a country like Kenya. (10 Marks)

Question Three (15 Marks)

a). Using relevant examples discuss five methods of protectionism. (10 Marks)

b). Explain the difference between trade creating and trade diverting custom unions. (5 Marks)

Question Four (15 Marks)

a). Use graphs to show how, from a point of specialization, country A. Can transform its production of good Y into good X through domestic production and trade the surplus good X with surplus o good Y from country B. (7 Marks)

b). Using the assumptions of the Rivardian Model, critically analyze the relevance of the theory to international trade. (8 Marks)

Question Five (15 Marks)

a). " The role of International Monetary Fund has faced several pitfalls in developing countries. " Discuss this statement citing the criticism that have been raised against IMF. (10 Marks)

b). Outline five major contribution of mercantilists to the theory of international trade. (5 Marks)

Eco 414: International Economics 1 Question Paper

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