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Eco 216: Money And Banking Question Paper

Eco 216: Money And Banking

Course:Bachelor Of Business Management

Institution: Masinde Muliro University Of Science And Technology question papers

Exam Year:2007

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MASINDE MULIRO UNIVERSITY OF
SCIENCE AND TECHNOLOGY
(MMUST)

UNIVERSITY EXAMINATUIONS
2006/2007 ACADEMIC YEAR

SECOND YEAR FIRST SEMESTER EXAMINATIONS

FOR THE DEGREE
OF
BACHELOR OF BUSINESS MANAGEMENT

COURSE CODE: ECO 216

COURSE TITLE: MONEY AND BANKING

DATE: 16TH JANUARY, 2007 TIME: 2:00 P.M.- 5:00 P.M.

INSTRUCTIONS
Answer ANY FOUR questions.
Marks are indicated at the end of each questions.

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Q1 (a) Discuss the special characteristic that distinguish money
from other economic goods. [7 1/2 Marks]

(b) To what extent is the ability of money to fulfill its
functions affected by changes in its value? [5 Marks]

(c) It has been noted that in modern societies money consists
predominantly of claims against certain institutions?
Explain this statement showing the composition of money
supply in Kenya. [5 Marks]

Q2 (a) Explain the five main determinants of demand for money.
[10 Marks]

(b) Explain why people decide to hold money instead of some
other interest saving assets. [7 1/2 Marks]

Q3 (a) Discuss the organization and structure of commercial banks.
[7 1/2 Marks]

(b) Explain the relations of money supply to commercial Bank
reserves. [10 Marks]

Q4 (a) Explain the functions of the Central Bank in a country.
[6 Marks]

(b) Why does the Central Bank seek to control money supply?
[5 Marks]

(c) How does the Central Bank control the lending policy of a
commercial Bank? [6 1/2 Marks]

Q5 Exhaustively discuss the theories of demand for money.
What are some of their relationships? [17 1/2 Marks]

Eco 216: Money And Banking Question Paper

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