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Econ 325: Economic Policy Analysis Question Paper

Econ 325: Economic Policy Analysis

Course:Bachelor Of Commerce

Institution: Kabarak University question papers

Exam Year:2009

COURSE CODE: ECON 325
COURSE TITLE: ECONOMIC POLICY ANALYSIS
STREAM: Y4S2
INSTRUCTIONS:
1. Question ONE is COMPULSORY
2. Attempt any other TWO (2) Questions
3. Question ONE carries 30 marks while the other questions carry 20 marks each
4. Concise answers provide competitive advantage to the candidate
QUESTION ONE COMPULSORY (30 marks)
a) Define the following concepts:
i. Policy formulation (1 mark)
ii. Economic efficiency (1 mark)
iii. Market failure (1 mark)
iv. Information asymmetry (1 mark)
v. Policy implementation (1 mark)
b) Distinguish between the following paired concepts
i. Pareto efficiency and allocative efficiency (3 marks)
ii. Policy instruments and target variables (3 marks)
c) Explain the criteria for assessing policy instrument? (6 marks)
d) Most developing countries have very sound policy prescriptions to the many problems
that bedevil them yet they never seem to overcome these problems. What explains
this situation? (8 marks)
e) Why would you consider unemployment as a macroeconomic problem? What policy
actions would you recommend to solve the unemployment problem?
(5 marks)
QUESTION TWO
Assume a hypothetical country that is pursuing an inward-looking strategy, with
extensive controls on prices, wages, interest rates, imports, capital movements and
extensive state participation in the productive system. Further assume that this country
has serious balance of payments and inflationary difficulties, static or declining per capita
incomes with falling savings and investment levels.
Required:
Discuss the package of policies that you would prescribe to improve the economic
performance of this hypothetical country. (20 marks)
QUESTION THREE
i. With reference to Kenya’s vision 2030, discuss the policies that the Government has
put in place to attain the objectives of Vision 2030.
(10 marks)
ii. What factors may inhibit Kenya from attaining the objectives of Vision 2030?
(10 marks)QUESTION FOUR
“Most developing countries have designed very good and eloquent policies to address the
many problems that they face. However, these countries still remain trapped in the
vicious circle of poverty”. Discuss (20 marks)
QUESTION FIVE
Developing countries have experienced persistent and rising external debt for decades
now.
a) Explain the causes of the problem (10 marks)
b) Suggest economic policy measures which may be used to ameliorate this problem.
(10 marks)

Econ 325: Economic Policy Analysis Question Paper

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