Management Economics End Of Stage Exam Question Paper
Management Economics End Of Stage Exam
Course:Diploma In Business Administration
Institution: Machakos University question papers
Exam Year:2012
MACHAKOS TECHNICAL TRAINING INSTITUTE
END OF STAGE EXAMINATION
DIPLOMA II IN BUSINESS ADMINSTRATION AND CO – OPERATIVE
MANAGEMENT ECONOMICS.
INSTRUCTIONS
TIME ALLOWED: 3 HOURS
1. Answer only five questions
2. All questions carry equal marks
3. Make your work, illustration and concepts clear as possible.
1. a) define and explain with an illustration the concept credit creation. Use a cash ratio of 10%
(4 marks)
b) Discuss the various ways in which the central bank uses to control credit
(4 marks)
c) What are the major objectives of monetary policy. Give two objectives
(2 marks)
2. a) Define the term inflation
(2 marks)
b) Give and explain two types of inflation depending on the rates and depending on causes
(4 marks)
c) State and explain seven (7) causes of inflation in an economy.
(4 marks)
3. a) Define the term value for money.
(1 mark)
b) Value for money is explained variously. Discuss the three major theories.
(9 marks)
c) What are the major assumptions of fishers theory of money.
(5 marks)
d) What are the critisms of fishers theory of money.
(5 marks)
4. a) State the ideal conditions for perfect competition in a market.
(14 marks)
b) Give the two conditions for profit maximization.
(2 marks)
c) Illustrate by use of a diagram the equilibrium position and sufficient conditions for profit maximization in this market.
(4 marks)
5. a) Differentiate between economies and diseconomies of scale.
(4 marks)
b) As a firm growth and expands, it enjoys various benefits. Give and explain seven internal economies of scale.
(14 marks)
c) Differentiate between isoquate and isocost
(2 marks)
6. a) Explain any four major types of unemployment experienced in your country,
(8 marks)
b) Give ways and means of alleviating the unemployment problem in developing countries.
(8 marks)
c) What are the major consequences of unemployment?
(4 marks)
7.
a) Give four properties of indifference curves.
(4 marks)
b) State and explain three methods of measuring national income.
(6 marks)
c) Give five reasons why N.I statistics is important.
(5 marks)
d) What challenges do economists encounter when measuring national income?
(5 marks)
8. a) Money is not just paper printed and given value, it has qualities, State them
(9 marks)
b) State and explain two principles used by the central Bank to issue currency.
(6 marks)
c) Commercial banks are on increase in Kenya, what are their major functions.
(5 marks)
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