Buss 322: Money Banking And Finance Question Paper
Buss 322: Money Banking And Finance
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2010
FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS
Answer Question ONE and any Other TWO Questions
Question 1
a) Describe several approaches to definition of money. (6 marks)
b) Discuss the three motives of Money Demand. (9 marks)
c) Central Bank is mandated by the state to deal with monetary policy formulation and implementation. Explain the major function of Central Bank. (5marks)
d) Even with all the ability to create credit, the commercials Bank are constrained to make as much profit as they would have wished. Discuss. (7 marks)
Question 2
a) Non Bank Financial institutions NBFI are major contributor in development of an economy. Briefly explain their main role in this development. (6 marks)
b) Discuss any three functions performed by money in a modern economy (6marks)
c) In securing long-term financing for capital investment one requires to understand how the capital market operates. Describe five main functions of capital markets. (8marks)
Question 3
a) Commercial Banking is one of most important aid to trade and economic development in an economy. Its structure is the key to this development. Discuss the advantages of branch banking structure in a developing country. (10 marks)
b) A modern economy should have a well developed money market. Describe the major function of a money market in Kenya. (10 marks)
Question 4
a) To deal in international money, it requires country to be a member of the Bretons Woods Institutions. Briefly explain the main functions IMF. (8 marks)
b) An open economy maintains a flexible foreign exchange regime. Highlight the main advantages of this regime. (7 marks)
c) Discuss the factors that made barter system inappropriate in exchange as the economies developed. (5 marks)
Question 5
a) What is cash reserve ratio? (4 marks)
b) Briefly explain how money supply is endogenously determined in an economy. (6 marks)
c) Development of monetary system has been very essential in development of trade and finance. Illustrate how monetary system has evolved up to the current trends. (10marks)
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