Free vs Central Planning Economic Systems Q1

Q.
(a) Explain the difference between macroeconomics and microeconomics. (5 marks)

(b) Describe the three (3) characteristic differences between free economic system and central planning economic system. (15 marks)

(20 marks, 2015 Q1)

A.

Ref:

Effect of government intervention in stabilizing economy Q2

Q.
(a) Explain how government intervention is done in stabilizing the economy. (6 marks)

(b) Describe the difference between Domestic Trade and International Trade. (8 marks)

(c) "Government intervention in the current economy can lower the price of goods." Give your opinion. (6 marks)

(20 marks, 2015 Q2)

A.

Ref:

Firm Industry Product Input Consumer and Capital Goods Q4

Q.
(a) Explain the difference between consumer goods and capital goods. (8 marks)

(b) Explain the following 'term' with suitable examples.

(i) Firm (4 marks)

(ii) Industry (4 marks)

(iii) Production input (4 marks)

(20 marks, 2015 Q4)

A.

Ref:

Deflation and Inflation Cost-push and Demand-push Q3

Q.
(a) Explain the difference between deflation and inflation. (4 marks)

(b) Explain two (2) of the following factors as causes of inflation.

(i) Cost-push inflation (4 marks)

(ii) Demand-push inflation (4 marks)

(c) Describe the following two (2) methods to tackle inflation.

(i) Monetory Policy (4 marks)

(ii) Fiscal Policy (4 marks)

(20 marks, 2015 Q3)

A.

Ref:

Implicit and Explicit Costs Q5

Q.
(a) Describe the difference between explicit costs and implicit costs by definition, concept and appropriate examples. (12 marks)

(b) Describe the difference between Gross Domestic Product (GDP) and Gross National Product (GNP) in measuring national income. (8 marks)

(20 marks, 2015 Q5)

A.


Ref:

Effects of Competition on Demand Curve Q6

Q.

(a) The above diagram shows the demand curve (DD) and the supply curve (SS) for a perfectly competitive industry. Discuss the relationship that occurs with P if D1Q1 switches to D2Q2. (10 marks)

(b) Describe the price elasticity of supply and price elasticity of demand, as well as the differences that exist between them. (10 marks)

(20 marks, 2015 Q6)

A.

Ref:

Market Structures and Perfect Competition Q7

Q.
(a) Explain the following terms in the context of the market structure.

(i) Monopolistic (3 marks)

(ii) Oligopoly (3 marks)

(iii) Monopsony (3 marks)

(iv) Oligopsony (3 marks)

(b) Describe the basic criteria of perfect competition in the market structure. (8 marks)

(20 marks, 2015 Q7)

A.

Ref:

Functions of commercial banks Q8

Q.
(a) Describe the main functions of commercial banks based on the following three (3) aspects

(i) Acceptance of deposits (4 marks)

(ii) Loan facilities (4 marks)

(iii) Banking services and facilities (4 marks)

(b) Explain two (2) methods / approaches in computing the national income

(i) Income Method (4 marks)

(ii) Expenditure Method (4 marks)

(20 marks, 2015 Q8)

A.

Ref: