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Economic Policy And Analysis: Econ 325 Question Paper

Economic Policy And Analysis: Econ 325

Course:Bachelor Of Economics And Mathematics

Institution: Kabarak University question papers

Exam Year:2010

COURSE CODE: ECON 325
COURSE TITLE: ECONOMIC POLICY
ANALYSIS
STREAM: Y4S2
DAY: FRIDAY
TIME: 2:00 – 4:00 P.M.
DATE: 19/03/2010
INSTRUCTIONS:
1. Question ONE is COMPULSORY and carries 30 marks
2. Attempt any other TWO questions, each carrying 20 marks
3. Your answers should be concise.

QUESTION 1 (COMPULSORY) (30 marks)
a) Write notes on the following:
(i) Policy instruments (1 mark)
(ii) Information asymmetry (1 mark)
(iii) Foreign direct investment (FDI) (1 mark)
(iv) Market failure (1 mark)
(v) Pareto optimality (1 mark)

b) Assume that Kenya is undergoing economic recession as a result of the recent global
economic crunch:
(i) What are some of the manifestations of such a recession? (5 marks)
(ii) What policies would you prescribe to move the economy from such a recession?
(5 marks)
c) (i) Define economic efficiency (1 mark)
(ii) Differentiate between allocative efficiency and X-efficiency. In bringing out the
distinction, use relevant examples (6 marks)
(iii) How are poverty, unemployment and inequality connected? What policies can
address these challenges? (8 marks)

QUESTION 2
Compare and contrast between Kenya policies of Import Substitution Industrialization (ISI) and
Export- promotion. Indicate the successes and/or failures of there policies (20 marks)

QUESTION 3
With respect to the agricultural sector, Kenya has adopted the National Food Policy and more
recently, there is the policy emphasizing commercialization of agricultural production. Do you
consider these policies complimentary or contradictory? Explain your answer. (20 marks)

QUESTION 4
a) Discuss the importance of information in national development (10 marks)
b) Discuss Kenya’s information policy and indicate its strengths and weaknesses, if any
(10 marks)

QUESTION 5
a) Define Multinational Corporation (MNC) (1 mark)
b) Discuss the merits and demerits of MNC in the developing countries. ( 9 marks)
c) In what ways do developing countries; such as Kenya:
(i) Encourage MNC? (5 marks)
(ii) Discourage MNC? (5 marks)

Economic Policy And Analysis: Econ 325 Question Paper

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