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Kasneb Cpa Part 1 Section 2Cps Part I Section 2Csia Part 1 Section 2Ccp Part I Section 2Economics Question Paper

Kasneb Cpa Part 1 Section 2Cps Part I Section 2Csia Part 1 Section 2Ccp Part I Section 2Economics

Course:

Exam Year:2010

KASNEB
CPA PART 1 SECTION 2
CPS PART I SECTION 2
CSIA PART 1 SECTION 2
CCP PART I SECTION 2
ECONOMICSMONDAY: 29 November 2010. Time Allowed: 3 hours
Answer any FIVE questions. ALL questions carry equal marks.

QUESTION ONE
(a) Briefly explain the challenges encountered by planned economic systemsin their transition to market oriented economics. (10 marks)
(b) Discuss the key features of a mixed economic system. (10 marks)
(Total: 20marks)
QUESTION TWO
(a) Outline four factors that determine price elasticity of demand for acommodity. (4 marks)
(b) Explain the importance of elasticity of supply in economic decision making.(8 marks)
(c)
(i) With the aid of a well labeled diagram, distinguish between shifts indemand curve and movements along the demand curve. (4 marks)
(ii) Highlight four factors that could lead to a rightward shift in thedemand curve. (4 marks)
(Total: 20 marks)

QUESTION THREE
(a) Distinguish between perfect oligopoly and imperfect oligopoly . (4 marks)
(b) Briefly explain the economic effects of the oligopolistic market conditions inan economy. (8 MKS

(c) Outline the characteristics of an oligopolistic market structure. (8 marks)
(Total: 20 marks)
QUESTION FOUR
(a)

(i) With the aid of a diagram, briefly explain the characteristics of indifference curves. (8 marks)
(ii) Highlight the limitation of indifference curves in economic analysis.(6 marks)

(b)Identity six characteristics of a good development plan. (6 marks)(
Total: 20 mark)
QUESTION FIVE

(a)
(i) Define the term “multiplier.” (2 marks)
(ii) Outline the factors that limit the application. (8 marks)
(b) The following data relate to the commodity and money markets of theeconomy of country XYZ.
Y = C+1
C = 1,000+0.5Y
1 = 20,000-200r
MDT = 0.2Y
MDS= 350-400r
Ms = 2,500
Where: Y is the national income
C is the consumption function
I is the investment functionr is the interest
MDT is the precautionary and transactionary demand for moneyMs is the money supply
MDS is the speculative demand for money

Required:
(i) Equilibrium level of national income. (5 marks)
(ii) Equilibrium level of interest rate. (5 marks)

(Total: 20 Marks)
QUESTION SIX
(a) Outline four demerits of direct taxation to an economy. (4 marks)

(b) Briefly describe four factors that determine the supply of labour in an
economy. (8 marks)
(c) Identify and briefly explain the functions of trade unions. (8 marks)
(Total: 20 marks)

QUESTION SEVEN
(a) Distinguish between economic growth and economic development. (4 marks)
(b)Discuss the causes of the high external debts experienced in the developingcountries. (4 marks)
(c) Outline the economic policy measures that should be applied to minimize theproblem of external debt in developing countries. (8 marks)
(Total: 20marks)

Kasneb Cpa Part 1 Section 2Cps Part I Section 2Csia Part 1 Section 2Ccp Part I Section 2Economics Question Paper

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