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Hbc 2242: Intermediate Macroeconomics Question Paper

Hbc 2242: Intermediate Macroeconomics

Course:Bachelor Of Commerce

Institution: Jomo Kenyatta University Of Agriculture And Technology question papers

Exam Year:2007

JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY
University Examinations 2007/2008
SECOND YEAR FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE
HBC 2242: INTERMEDIATE MACROECONOMICS
DATE: AUGUST TIME 2 HOURS
INSTRUCTIONS: Answer question one and any other two questions
Question one
a.) Explain the meaning of the following terms used in consumption theory:
i. Cross section or household budget studies. (5 marks)
ii. Time series or long run studies. (5 marks)
iii. Demonstration effect. (5 marks)
iv. Ratchet effect. (5 marks)
b.) Explain the life cycle hypothesis. (10 marks)

Question Two
a.) Define an IS curve and show how it is derived. What is the relationship between the demand and supply of products of such an IS curve? (15 marks)
b.) Explain why the LM curve is positively sloped. (5 marks)

Question Three
a.) Define general equilibrium and use a diagram to show an economy which is in a general equilibrium. (10 marks)
b.) Explain why fiscal policy is more desirable in a country than monetary policy.(10 marks)

Question four
a.) Explain the various types of inflation and their causes. (10 marks)
b.) What are the consequences of inflation? (10 marks)

Question five
a.) What is the structuralist explanation of the causes of economic instability in developing countries? (10 marks)
b.) Explain the main policy instruments used by the government. (10 marks)

Hbc 2242: Intermediate Macroeconomics Question Paper

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