Hbc2213:Intermediate Macro Economics Question Paper
Hbc2213:Intermediate Macro Economics
Course:Bachelor Of Commerce
Institution: Meru University Of Science And Technology question papers
Exam Year:2014
QUESTION ONE – (30MARKS)
(a) The following information is given for an hypothetical economy: = 400 + 0.85 : = 1400 100 : = 1000 : = 800 : = 0.1 : = 0.2 50 : = 850
Required (i) Determine the equation for I-S curve. (4 Marks) (ii) Determine the equation for LM curve. (4 Marks) (iii) Determine the equilibrium income and interest rate. (6 Marks)
(b) With the aid of a diagram explain the derivation of IS – LM curves. (10 Marks) (c) Using diagrams distinguish between savings and consumption functions. (6 Marks)
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QUESTION TWO – (20 MARKS)
(a) Investment is a key macroeconomic variable in a country’s growth and development. Discuss the theories of investment. (10 Marks) (b) Explain the macroeconomic concerns that afflict today’s modern economics. (10 Marks)
QUESTION THREE – (20 MARKS)
(a) A given economy has the following information; = 12,400 + 0.82 : = 3500 = 4200 : = 2,800 : = 1800 + 0.1 : = 2200 : = 1400 + 0.2
(i) Determine equilibrium level of national income. (4 Marks) (ii) Determine consumption level of equilibrium income. (4 Marks) (iii) Determine the balance of payment. (4 Marks) (iv) Calculate: - Investment multiplier (2 Marks) - Imports multiplier (2 Marks) - Transfer payment multiplier (2 Marks) - Tax multiplier (2 Marks)
QUESTION FOUR – (20 MARKS)
(a) Discuss Keynes contribution to modern day economic policy making. (10 Marks) (b) Compare and contrast the classical school of economic thought and the neo-classical economics. (10 Marks)
QUESTION FIVE – (20 MARKS)
(a) Distinguish between Keynes theory of consumption; Life cycle and permanent consumption theories. (10 Marks) (b) Explain the determinants of consumption demand in an economy. (10 Marks)
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