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Hps2208:Mechandise Question Paper

Hps2208:Mechandise

Course:Bachelor Of Supplies Management

Institution: Meru University Of Science And Technology question papers

Exam Year:2011

QUESTION ONE – 30 MARKS
a. Differentiate between macro-economic and micro-economics. (4 Marks) b. You are given the following equations C = 100 + 0.8Yd I = 200 G = 100 X = 10 M = 2 + 0.25Y
Required:
i. Determine the equilibrium income. (6 Marks) ii. Determine the level of consumption at equilibrium income. (4 Marks) iii. Determine the level of net exports. (4 Marks) c. Calculate the following i. Government expenditure multiplier (3 Marks) ii. Tax multiplier (3 Marks) d. Define the following terms as used in consumption and investment analysis? i. The accelerator theory (2 Marks) ii. Crowding out effect (2 Marks) iii. National income accounting (2 Marks)
2
QUESTION TWO – 20 MARKS
a. Discuss the circular flow of incomes. (4 Marks) b. Briefly explain the stages of macro-economic development. (10 Marks) c. Explain the differences between consumer price index (CPI) and the gross domestic product deflators (GDP Deflator) (6 Marks)
QUESTION THREE – 20 MARKS
a. Discuss the four key macro-economic policy problems. (12 Marks) b. Define the term investment. (2 Marks) c. Discuss the theories of investment. (6 Marks)
QUESTION FOUR – 20 MARKS
a. Consider our 15 –LM model. The money supply is fixed and the interest rate is determined in the model. The economy is described by the following equations: C = 950 + 0.65Y (Consumption I = 350 + 0.1Y – 20r (Investment) Md = 0.6v – 120Y (Money demand) Ms = 2196 (Money Supply)
Determine: i. The equation that describes the IS schedule (3 Marks) ii. The equation that describes the LM schedule (3 Marks) iii. The equilibrium level of income and the equilibrium rate of interest. (4 Marks) iv. The money demand equilibrium (3 Marks) v. The velocity of money at the equilibrium level and interest rate. (3 Marks) vi. Highlight the difference between IS curve and LM curve. (4 Marks)
QUESTION FIVE – 20 MARKS
a. Discuss the theories of demand for money. (6 Marks) b. Discuss the factors that determine the level of investment demand. (6 Marks) c. Explain the following terms as used in an economy. i. Monetary policies (4 Marks) ii. Fiscal policies (4 Marks)

Hps2208:Mechandise Question Paper

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