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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:2013

QUESTION ONE – (30 MARKS)
(a) (4 Marks) (b) The simple Kyenesian model of employment is based on several assumptions briefly explain five of these assumptions? (10 Marks) (c) (4 Marks) (ii) With the aid of a well labeled diagram explain the multiplier effect of an increase in tax on National income? (6 Marks) (d) Define the following terms as applied in consumption and investment analysis? (i) The accelerator theory (2 Marks) (ii) (2 Marks) (iii) (2 Marks)
QUESTION TWO – (20 MARKS)
(a) (i) With the aid of a well labeled diagram illustrate the negative relationship between injections and interest rates and the positive relationship between withdrawals and National income. (6 Marks) (ii) Graphically derive the LM curve. (6 Marks) (b) Describe general equilibrium in the IS-LM model. (2 Marks) (c) Illustrate the effect of an increase in autonomous investment on the IS curve? (3 Marks) (d) Graphically show how the in money supply affects the LM curve. (3 Marks)
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QUESTION THREE – (20 MARKS)
(a) Discuss why economic models are important in the study of macroeconomic theory? (5 Marks) (b) (i) Differentiate between static and dynamic macroeconomic models. (6 Marks) (ii) State three types of macroeconomic models and their areas of application? (6 Marks) (iii) What do the abbreviations D.S.G.E and C.G.E mean in macro models. (3 Marks)
QUESTION FOUR – (20 MARKS)
(a) Using necessary tools of analysis advice the ministry of finance how monetary policies can be used to increase national policies can be used to increase national income and reduce a prevailing high interest rate? (10 Marks) (b) Subsequently advice how fiscal policies can be employed to increase both the National income and rate of interest? (10 Marks)
QUESTION FIVE – (20 MARKS)
(a) Differentiate between anticipated inflation and unanticipated inflation? (4 Marks) (b) Describe four groups of stake holders that will be affected by the redistribution effect in case of an unanticipated inflation situation? (8 Marks) (c) Using well labeled diagrams, explain demand-pull and cost-push inflation under the (8 Marks)

Hbc2213:Intermediate Macro Economics Question Paper

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