Economics Question Paper

Economics

Course:Diploma Course In Management Section 1

Institution: Kenya Institute Of Management (Kim) question papers

Exam Year:2009

Diploma course in management

Section I

June 2009 Examination

Economics

Time: 3 Hours

Instructions
1. Write your index number in the space provided in the answer booklet.
2. Answer any five questions
3. All questions carry equal marks
4. No writing should be done on this question paper
5. Candidates who break KIM examination rules and regulations or commit any malpractice will be Disqualified

1. Give a brief explanation on the following terms as used in economics. (12 marks)

i) Balance of payment
ii) Protectionist
iii) National income
iv) Equilibrium point
v) Discuss y use of a sketch diagram, the phases of business cycle

b) Discuss by use of a sketch diagram, the phases of business cycle. (8 marks)

2. Define the term demand for money (3 marks)

b) Discuss the Keynesian theory of demand for money (9 marks)

c) Explain the functions of central bank of Kenya in the modern world. (8 marks)

3. Discuss using a well labeled diagram the circular flow of income in a closed economy (8 marks)

b) Using a well labeled diagram, explain the difference between movement along and shift in demand curve (12 marks)

4. Differentiate between (12 marks)

i) Marginal revenue and marginal cost
ii) Monetary policy and fiscal policy
iii) Opportunity cost and real cost

b) State the econo9mic circumstances under which a perfectly competitive market may prevail in any economy

5. Discuss difficulties encountered in measuring national income (10 marks)

b) Explain the functions and limitations of IMF (10 marks)

6. Define elasticity of demand (2 marks)

b) Explain areas where the concept of elasticity ids used in policy decision making in Kenya (8 marks)

c) Using well labeled diagrams, explain how a perfectly competitive firm earns normal profits, super normal profits and incur losses in the short tun. (10 marks)

7. Define the term market structure (2 marks)

b) Discuss four types of market structures (8 marks)

c) Discuss using a diagram, the kinked demand curve (10 marks)

b

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