Past papers exam questions and answers
Hardcopy Booklet Covering Year 2018 to April 2025 Past Exams Questions and Answers Topically arranged
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Economics Revision Kit – Past exam questions and answers for kasneb CPA, CIFA and CCP courses
This revision kit consists of kasneb past paper questions and their suggested answers to act as a revision guide for those students taking kasneb courses.
PAST PAPERS QUESTIONS
Topic 1: Introduction to economics………………………………………………………11
Topic 2: Demand, Supply and Determination of equilibrium, Supply analysis, Determination of equilibrium ……………………………………………..…..14
Topic 3: The theory of consumer behaviour………………………………………..……23
Topic 4: The theory of a firm(Theory of Production and Theory of Costs) ……..…..…27
Topic 5: Market structures…………………………… ………………………..…………35
Topic 6: National income……………………………………………………………………..40
Topic 7: Economic growth, economic development and economic planning…….……..48
Topic 8: Money and banking……………………………………………………………..54
Topic 9: Inflation and unemployment…………………………… ………………..…….62
Topic 10: Agriculture and Industry………………………………………………….…..66
Topic 11: International trade and finance……………………………………..….………68
PAST PAPERS ANSWERS
Topic 1: Introduction to economics………………………………………………………75
Topic 2: Demand, Supply and Determination of equilibrium, Supply analysis, Determination of equilibrium ………………………….………………….….91
Topic 3: The theory of consumer behaviour………………………………………..….130
Topic 4: The theory of a firm(Theory of Production and Theory of Costs) …………..159
Topic 5: Market structures…………………………… ………………………..………202
Topic 6: National income……………………………………………………………………226
Topic 7: Economic growth, economic development and economic planning……..…..249
Topic 8: Money and banking……………………………………………………….…..278
Topic 9: Inflation and unemployment…………………………… ……………………..314
Topic 10: Agriculture and Industry…………………………………………………….332
Topic 11: International trade and finance………………………………… …..………..342
UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitude to identify the impact and interaction of economic principles in various situations and apply the principles in decision making.
LEARNING OUTCOMES
A candidate who passes this paper should be able to:
Apply basic mathematical and graphical techniques to analyse economic relationships
Apply the knowledge of economics in decision making
Analyse economic problems and suggest possible policy related recommendations
Apply knowledge of economics in international trade and finance
Relate economics to income levels and development in a country
CONTENT
MICROECONOMICS
1. Introduction to economics
Definition of economics
Basic economic concepts: economic resources, human wants, scarcity and choice, opportunity cost, production possibility curves/frontiers
Scope of economics: Micro and macro economics
Methodology of economics: positive and normative economics, scientific methods, economics as a social science.
Economic systems: planned economy, free market economy, mixed economy
Consumers’ sovereignty and its limitations
2. Demand, supply and determination of equilibrium
Demand analysis
Definition
Law of demand
Exceptional demand curves
Individual demand versus market demand
Factors influencing demand
Types of demand
Movement along and shifts of demand curves
Elasticity of demand
Types of elasticity: price, income and cross elasticity
Measurement of elasticity; point and arc elasticity
Factors influencing elasticity of demand
Application of elasticity of demand
3. Supply analysis
Definition
Individual versus market supply
Factors influencing supply
Movements along and shifts of supply curves
Definition of elasticity of supply
Price elasticity of supply
Factors influencing elasticity of supply
Application of elasticity of supply
4. Determination of equilibrium
Interaction of supply and demand, equilibrium price and quantity
Mathematical approach to equilibrium analysis
Stable versus unstable equilibrium
Effects of shifts in demand and supply on market equilibrium
Effect of taxes and subsidies on market equilibrium
Price controls: Maximum and Minimum price control
Price decontrol: Effect of Minimum and Maximum price decontrol
Reasons for price fluctuations in agriculture
5. The theory of consumer behaviour
Approaches to the theory of the consumer – cardinal versus ordinal approach
Utility analysis, marginal utility (MU), law of diminishing marginal utility (DMU)
Limitations of cardinal approach
Indifference curve analysis; Indifference curve and budget line
Consumer equilibrium; effects of changes in prices and incomes on consumer equilibrium
Derivation of a demand curve
Applications of indifference curve analysis: substitution effect and income effect for a normal good, inferior good and a giffen good; derivation of the Engels curve
Consumer surplus/Marshallian surplus
6. The theory of a firm: The theory of production
Factors of production
Mobility of factors of production
Short run analysis
Total product, average and marginal products
Stages in production and the law of variable proportions/the law of diminishing returns
Long run analysis
Isoquant and isocost lines
The concept of producer equilibrium and firm’s expansion curve
Law of diminishing returns to scale
Demand and supply of factors of production
Wage determination: demand and supply for labour
Wage differential
Trade unions: functions, effectiveness and challenges
Transfer earnings and economic rent
7. The theory of costs
Short run costs analysis and size of the firm’s total cost, fixed cost, average cost, variable costs and marginal cost
Long run costs analysis
Optimal size of a firm
Economies and diseconomies of scale
8. Market structures
Definition of a market
Necessary and sufficient conditions for profit maximisation
Mathematical approach to profit maximisation
Output, prices and efficiency of: Perfect competition, monopoly, monopolistic competition, oligopolistic competition
2. MACROECONOMICS
9. National income
Definition of national income
Circular flow of income
Methods/approaches to measuring national income
Concepts of national income: gross domestic product (GDP), gross national product (GNP) and net national product (NNP), net national income (NNI) at market price and factor cost, disposable income
Difficulties in measuring national income
Uses of income statistics
Analysis of consumption, saving and investment and their interaction in a simple economic model
Mathematical approach to the determination of equilibrium national income
Inflationary and deflationary gaps
The multiplier and accelerator concepts
Business cycles/cyclical fluctuations
10. Economic growth, economic development and economic planning
The differences between economic growth and economic development
Actual and potential growth
The benefits and costs of economic growth
Determinants of economic development
Common characteristics of developing countries
Obstacles to economic development
The need for development planning
Short term, medium term and long-term planning tools
Challenges to economic planning in developing countries
11. Money and banking
Money
The nature and functions of money
Demand and supply of money
Theories of demand for money: The quantity theory, the Keynesian liquidity preference theory
The banking system
Definition of commercial banks
The role of commercial banks and non-banking financial institutions in the economy
Credit creation
Definition of central bank
The role of the central bank; traditional and changing role in a liberalised economy, such as financial sector reform, exchange rate reform
Monetary policy, definition, objectives, instruments and limitations
Classical theory of interest rate determination
Interest rates and their effects on the level of investment, output, inflation and employment
Harmonisation of fiscal and monetary policies
Simple IS – LM Model
Partial equilibrium and general equilibrium
12. Inflation and unemployment
Inflation
Definition and types of inflation
Causes of inflation: cost push and demand pull
Effects of inflation
Measures to control inflation
13. Unemployment
Definition of unemployment
Types and causes of unemployment
Control measures of unemployment
Relationship between unemployment and inflation: The Phillips curve
14. Agriculture and Industry
Role of agriculture in economic development
Challenges facing agricultural sector in developing countries
Policies to improve the agricultural sector
Role of industry in economic development
Benefits of small scale industries in developing countries
Obstacles to industrial development in developing countries
Policies to enhance industrial development in developing countries
15. International trade and finance
Definition of International trade, advantages and disadvantages
Theory of absolute advantage and comparative advantage
World trade organisation (WTO) and concerns of developing countries
Protection in international trade
Regional integration organisations, commodity agreements and the relevance to less developed countries (LDCs)
Terms of trade, balance of trade, balance of payments (causes and methods of correcting deficits in balance of payments)
Exchange rates: Types of foreign exchange regimes, factors influencing exchange rates, foreign exchange reserves
Foreign Direct Investment: case for and case against FDI
Foreign Aid: Case for and case against foreign aid
Bretton Woods financial institutions: International Monetary Fund (IMF) and World Bank
Foreign debt management: causes, consequences of excessive debt and interventions
Structural Adjustment Programmes (SAPs) and their impacts on the LDCs
TOPIC 1
INTRODUCTION TO ECONOMICS
QUESTION 1
April 2025 Question One A
Explain THREE basic economic problems. (6 marks)
QUESTION 2
August 2024 Question Five A and C
(a) Explain THREE demerits of the deductive method of economic analysis. (6 marks)
(c) Describe how the concept of opportunity cost is applied in decision making with respect to:
Consumers. (2 marks)
Firms. (2 marks)
Governance. (2 marks)
International trade. (2 marks)
QUESTION 3
December 2023 Question Six A
Describe THREE steps involved in the scientific method of studying economics.
(6 marks)
QUESTION 4
August 2023 Question One A
State FIVE advantages of a planned economy. (5 marks)
QUESTION 5
August 2023 Question Six B
Analyse FOUR challenges that may be encountered by an economy when transitioning from a planned economy to a free enterprise system. (4 marks)
QUESTION 6
April 2023 Question One B
Enumerate FIVE benefits of studying economics. (5 marks)
QUESTION 7
December 2022 Question One C
List FOUR characteristics of economic resources. (4 marks)
QUESTION 8
December 2022 Question Three A
Enumerate FIVE factors that could limit consumer sovereignty. (5 marks)
QUESTION 9
December 2022 Question Six A
Outline FOUR disadvantages of a controlled market system. (4 marks)
QUESTION 10
August 2022 Question One A
Explain five demerits of trade liberalisation in an economy. (5 marks)
QUESTION 11
April 2022 Question One A
Discuss five challenges encountered by planned economic system in their transition to market oriented economies. (10 marks)
QUESTION 12
December 2021 Question One D
Outline seven advantages of a free market economic system. (7 marks)
QUESTION 13
August 2021 Question Six C
(i) Define the term “free enterprise economic system.” (1 mark)
(ii) Highlight four economic advantages of free enterprise economic system.
(4 marks)
QUESTION 14
May 2021 Question One A
Evaluate four ways in which the government could influence allocation of resources in a country. (8 marks)
QUESTION 15
May 2021 Question One C
(i) Define the term “Consumer Sovereignty” as used in economics. (2 marks)
(ii) Summarise six limitations of consumer sovereignty in an economy. (6 marks)
QUESTION 16
November 2020 Question One B
Using suitable examples, differentiate between the following terms as used in economics:
“Basic human wants” and “secondary human wants”. (4 marks)
“Public good” and “merit good”. (4 marks)
“Stable equilibrium” and unstable equilibrium”. (4 marks)
QUESTION 17
November 2020 Question Two B
Citing four examples, explain the significance of mobility of factors of production.
(8 marks)
QUESTION 18
November 2019 Question One A
Examine four limitations of a planned economic system. (4 marks)
QUESTION 19
November 2019 Question One B
With the aid of a diagram, explain the concept of production possibility curve.
(5 marks)
QUESTION 20
November 2019 Question Two A
Evaluate three fundamental economic issues that a society has to address to minimise the problem of scarcity of resources. (6 marks)
QUESTION 21
May 2019 Question Two A
(i) Enumerate five characteristics of a free market economic system. (5 marks)
(ii) State five advantages of a free market economic system. (5 marks)
QUESTION 22
November 2018 Question One A
Differentiate between “economic resources” and “non economic resources”. (1 mark)
QUESTION 23
November 2018 Question One B
(i) Explain the term “consumer sovereignty” as used in economics. (1 mark)
(ii) Outline eight factors that hinder consumers’ sovereignty. (8 marks)
QUESTION 24
November 2018 Question Four A
Highlight five characteristics of a mixed economic system. (5 marks)
TOPIC 2
DEMAND, SUPPLY AND DETERMINATION OF EQUILIBRIUM
QUESTION 1
April 2025 Question Three A
Given the demand function:
Q = 350 – 1.5Q + 70/p^2
Required:
Determine the point elasticity of demand when price is Sh.10. (4 marks)
Interpret your results. (2 marks)
QUESTION 2
April 2025 Question Five D
State SIX factors that may influence price elasticity of demand. (6 marks)
QUESTION 3
April 2025 Question Six A and C
Distinguish between “variable costs” and “fixed costs”. (4 marks)
(c) Outline FIVE determinants of supply in an economy. (5 marks)
QUESTION 4
December 2024 Question Three C
Explain FOUR applications of the concept of equilibrium in economics. (4 marks)
QUESTION 5
December 2024 Question Four B
With the aid of a well labelled diagram, explain the relationship between the marginal product curve and the average product curve. (6 marks)
QUESTION 6
December 2024 Question Five A
Using a well labelled diagram, differentiate between “gently sloped supply curve” and “steeply sloped supply curve”. (6 marks)
QUESTION 7
December 2024 Question Six C
Explain the application of price elasticity of demand in making decision by:
Government. (2 marks)
Producers. (2 marks)
Consumers. (2 marks)
QUESTION 8
December 2024 Question Seven B
The demand function for a firm is given as: P = 200 – 40Q
Determine:
Total revenue function. (2 marks)
Average revenue function. (2 marks)
Marginal revenue function. (2 marks)
QUESTION 9
August 2024 Question One A
Explain the concept of “price ceiling”. (2 marks)
Discuss THREE advantages of setting price ceilings. (6 marks)
QUESTION 10
April 2024 Question One A
Highlight FOUR factors that cause a downward shift in the demand curve. (4 marks)
QUESTION 11
April 2024 Question Two A
With an aid of a well labelled diagram, explain the concept of Production Possibility Frontier (PPF). (5 marks)
QUESTION 12
April 2024 Question Four B and C
Examine FOUR reasons why the demand curve is negatively sloped. (4 marks)
Using a well labelled diagram, differentiate between “movements along a supply curve” and “shifts in supply curve”. (6 marks)
QUESTION 13
April 2024 Question Six C
State FIVE circumstances under which price control is necessary. (5 marks)
QUESTION 14
December 2023 Question Five A and B
Explain FOUR assumptions of the law of demand. (8 marks)
The demand function for a certain commodity is given as follows:
Q = 110 – 3P + 75/〖2P〗^2 Where; Q = Quantity demanded
P = Price
Required:
Point price elasticity of demand when the price is Sh.15. (4 marks)
Interpret your results in (b) (i) above. (2 marks)
QUESTION 15
December 2023 Question Six B
Explain the term “dead weight loss” as used in economics. (3 marks)
QUESTION 16
December 2023 Question Seven B
A consumer has a fixed income of Sh.12,000 which must be spent entirely on bread and alcohol. The price per unit of bread is Sh.50 while the price per unit of alcohol is Sh.200.
Required:
Determine the marginal rate of substitution of alcohol for bread. (2 marks)
Suppose the level of consumer’s income is subjected to a housing levy of 1.5% while the price per unit of bread and the price per unit of alcohol increases by 10%, determine the marginal rate of substitution of bread for alcohol. (2 marks)
QUESTION 17
August 2023 Question Five C
Examine THREE factors that influence the elasticity of supply. (6 marks)
QUESTION 18
August 2023 Question Seven B
Analyse THREE benefits of elasticity of demand in economic decision making.(6 marks)
QUESTION 19
April 2023 Question Two C
With the aid of a diagram, explain regressive supply curve. (5 marks)
QUESTION 20
April 2023 Question Six A
The following information relates to the quantity demanded of commodity X at different prices and income levels of a consumer:
Quantity Price (Sh.) Income (Sh.)
1,200 160 60,000
1,000 180 40,000
Required:
Determine price elasticity of commodity X and interpret your answer. (3 marks)
(ii) Determine income elasticity of commodity X and interpret your answer. (3 marks)
QUESTION 21
April 2023 Question Seven A
(i) Differentiate between a “stable equilibrium” and an “unstable equilibrium”. (4 marks)
(ii) With the aid of a well labelled diagram, illustrate an unstable equilibrium. (4 marks)
QUESTION 22
December 2022 Question One D
Outline FIVE ways in which a government could interfere with the price mechanism.
(5 marks)
QUESTION 23
December 2022 Question Two C
Outline FIVE factors that determine the level of demand in an economy. (5 marks)
QUESTION 24
December 2022 Question Four A
Using a well labelled diagram, distinguish between “price floor” and “price ceiling”.
(8 marks)
QUESTION 25
December 2022 Question Six B
The demand and total cost function for a certain firm are represented as follows:
P = 400 – 4q
TC = q2 + 10q + 30
Where:
P is the price
TC is the total cost
q is the quantity
Required:
The marginal cost function. (2 marks)
The marginal revenue function. (2 marks)
The average variable cost function. (2 marks)
The profit maximising level of output. (2 marks)
The maximum profit. (2 marks)
QUESTION 26
December 2022 Question Seven B
The following data relates to the national income of a certain country in billions of shillings:
C = 500 + 0.6Yd
I = 350
G = 250
T = 200
X – M = 280 – 0.1Y
Where:
G = Government expenditure
C = Consumption
I = Investment
T = Taxes
X = Exports
M = Imports
Y = National income
Required:
The equilibrium level of national income. (3 marks)
The equilibrium level of consumption expenditure. (3 marks)
The multiplier. (2 marks)
QUESTION 27
August 2022 Question Four A, B and C
(a) Explain the following terms as used in elasticity analysis:
Price elasticity of demand. (2 marks)
Income elasticity of demand. (2 marks)
Cross elasticity of demand. (2 marks)
(b) Explain four factors that influence the elasticity of demand. (8 marks)
(c) With the aid of a well labelled diagram, explain the production possibility Frontier (PPF). (6 marks)
QUESTION 28
August 2022 Question Seven (c)
A firm operating under perfect competition has the following demand and total cost functions:
P = 75 – 0.5Q
TC = 80 + 20Q
Where:
P = Price in shillings
TC = Total cost
Q = Quantity in units produced and sold
Required:
The level of output that would maximise profits. (5 marks)
The maximum profit. (3 marks)
QUESTION 29
April 2022 Question One B
Explain three exceptions to the law of demand. (6 marks)
QUESTION 30
December 2021 Question One A, B and C
(a) Using a suitable example, explain the term “composite supply”. (2 marks)
(b) Summarise five factors that cause persistent market disequilibrium in an economy.
(5 marks)
(c) Highlight six reasons why the demand of a commodity might not increase following a decrease in the price of the commodity. (6 marks)
QUESTION 31
December 2021 Question Seven B
Explain four causes of a demand-pull inflation in an economy. (8 marks)
QUESTION 32
August 2021 Question One A
Highlight four factors that determine the supply of a good or service. (4 marks)
Using appropriate diagrams, explain the difference between “a movement along a supply curve” and “a shift in a supply curve”. (8 marks)
QUESTION 33
August 2021 Question Two C
The government has given a subsidy on the consumption of commodity Y.
Using a diagram for illustration, explain the effect of the above action on market equilibrium for commodity Y. (5 marks)
QUESTION 34
August 2021 Question Four D
Given the demand function:
Quantity (Q) = 40 + 15Q – 2Q^2 + 10/Q
Required:
(i) Point elasticity of demand
When;
Price (P) = 10
Quantity (Q) = 75 (3 marks)
(ii) Interpret your results. (1 mark)
QUESTION 35
May 2021 Question One B
Explain using formulae, the difference between “arc elasticity” and “point elasticity” of demand. (4 marks)
QUESTION 36
May 2021 Question Two B
Identify four reasons why governments intervene with the operations of price mechanism.
(8 marks)
QUESTION 37
May 2021 Question Two C
Outline seven factors that influence the elasticity of supply of a commodity. (7 marks)
QUESTION 38
November 2020 Question one C
With the aid of a well labelled diagram, illustrate the effect of a simultaneous increase in the income of the consumer and increase in fuel prices. (4 marks)
QUESTION 39
November 2019 Question one D
The following equations are given:
Q=-10+6P …………………equation(i)
Q=20-4P……………………equation(ii)
Required:
(i) Giving reasons identify the demand function and the supply function. (2 marks)
(ii) Determine the equilibrium price and quantity. (4 marks)
QUESTION 40
May 2019 Question Two B
Summarise five factors that could lead to a leftward shift of the supply curve of a commodity. (5 marks)
QUESTION 41
May 2019 Question Three C
Discuss four applications of elasticity of demand in economic decision making.
(8 marks)
QUESTION 42
November 2018 Question One C
Enumerate five factors that determine the price elasticity of demand of a commodity.
(5 marks)
QUESTION 43
November 2018 Question Two A
With the aid of an appropriate diagram, explain the concept of “shortage” as used in market equilibrium. (4 marks)
QUESTION 44
November 2018 Question Two B
Discuss seven effects of price decontrol in an economy. (7 marks)
QUESTION 45
November 2018 Question Two C
The demand and supply functions of commodities x and y are given as:
Q_dx=4 —P_X+0.5 P_Y
Q_dy=10+P_X — P_Y
Q_sx= -3+4P_X
Q_sy=-18+4 P_Y
Where:
Q_dx is the quantity demanded of x in thousands of units.
Q_dy is the quantity demanded of y in thousands of units.
Q_sx is the quantity supplied of x in thousands of units.
Q_syx is the quantity supplied of y in thousands of units.
Px is the price of x in thousands of shillings.
Py is the price of y in thousands of shillings.
Required:
(i) The equilibrium price and quantity of commodity x. (4 marks)
(ii) The equilibrium price and quantity of commodity y. (4 marks)
(iii) Explain the nature of relationship between commodity x and commodity y. (1 mark)
QUESTION 46
May 2018 Question three A
The demand of a certain product is represented by the following function:
Q=200+5P+ P^2
Where:
Q is quantity of the product
P is the price orate product
Required:
(i) Determine the point elasticity of demand at P Sh.20. (5 marks)
(ii) Interpret your result in (a) (i) above, (1 mark)
QUESTION 47
May 2018 Question Five A
Explain the term “partial equilibrium” as used in economics. (2 marks)
QUESTION 48
May 2018 Question Six A
With the aid of well labelled diagrams, distinguish between “price floors” and “price ceilings”. (8 marks)
TOPIC 3
THE THEORY OF CONSUMER BEHAVIOUR
QUESTION 1
April 2025 Question Two A
Outline FOUR assumptions underlying consumer rational behavior. (4 marks)
QUESTION 2
April 2025 Question Three C
Outline FIVE limitations of indifference curve analysis. (5 marks)
QUESTION 3
December 2024 Question Two D
Highlight FOUR assumptions of indifference curve analysis. (4 marks)
QUESTION 4
December 2024 Question Three D
Propose FOUR criticisms of the discounted marginal productivity theory. (4 marks)
QUESTION 5
December 2024 Question Six A
(i) Explain the concept of consumer sovereignty. (2 marks)
(ii) Enumerate FOUR factors that limit consumer sovereignty. (4 marks)
QUESTION 6
August 2024 Question Two B
Explain THREE exceptions to the law of diminishing marginal utility. (6 marks)
QUESTION 7
April 2024 Question Two C
Explain the term “consumer equilibrium”. (2 marks)
Using a well labelled diagram of indifference curves, illustrate the consumer’s equilibrium point. (6 marks)
QUESTION 8
April 2024 Question Three C
Using an appropriate diagram, explain FOUR properties of indifference curves.(8 marks)
QUESTION 9
April 2024 Question Seven A (ii)
Highlight FIVE assumptions of producer surplus. (5 marks)
QUESTION 10
December 2023 Question Two B and C
(b) With the aid of a well labelled diagram, illustrate the substitution and income effect of:
Inferior good. (5 marks)
Normal good. (5 marks)
(c) State FOUR product pricing strategies. (4 marks)
QUESTION 11
December 2023 Question Four B
Differentiate between an “Engel curve” and “Income consumption curve” as used in consumer behaviour analysis. (4 marks)
Using a well labelled diagram, derive the Engel Curve for a normal good using the indifference curve analysis. (8 marks)
QUESTION 12
August 2023 Question One C
Distinguish between “merit goods” and “public goods”. (4 marks)
QUESTION 13
August 2023 Question Four A
With the aid of a diagram, explain the marginal efficiency of capital. (5 marks)
QUESTION 14
August 2023 Question Seven A
Using an appropriate diagram in each case, explain the four properties of isoquants.
(8 marks)
QUESTION 15
April 2023 Question One D
Highlight FOUR assumptions of indifference curve analysis. (4 marks)
QUESTION 16
April 2023 Question Five B
With the aid of a well labelled diagram, explain the law of diminishing marginal utility.
(6 marks)
QUESTION 17
April 2023 Question Seven B and C
(b) Identify SIX criticisms of the marginal productivity theory of wage determination.
(6 marks)
(c) List SIX reasons why mobility of factors of production is important. (6 marks)
QUESTION 18
August 2022 Question Five A
Explain the term “indifference curve” as used in the theory of consumer behaviour. (2 marks)
Outline six application of the indifference curve analysis. (6 marks)
QUESTION 19
April 2022 Question One C
Outline four determinants of the elasticity of supply. (4 marks)
QUESTION 20
December 2021 Question Two B
Using indifference curve analysis, derive the engel curve of a normal good. (8 marks)
QUESTION 21
August 2021 Question Four B
With the help of a diagram, explain the marginal efficiency of capital. (5 marks)
QUESTION 22
May 2021 Question Three A
Using indifference curve analysis, demonstrate how an individual’s equilibrium point is attained. (4 marks)
QUESTION 23
May 2021 Question Three B
With particular interest on inferior goods, use the indifference curve analysis to demonstrate and explain the income and substitution effect of a fall in price. (6 marks)
QUESTION 24
November 2020 Question Two A
With the help of a diagram, discuss the concept of an individual angel curve as applied in the theory of consumer behaviour. (5 marks)
QUESTION 25
November 2019 Question One C
With the help of a diagram, illustrate the concept of surplus as applied in the theory of market equilibrium. (5 marks)
QUESTION 26
November 2019 Question Three A
Highlight four assumptions of consumer rationality. (4 marks)
QUESTION 27
May 2019 Question Three A
(i) Explain the difference between the “cardinal approach” and the “ordinal approach” to measuring utility. (2 marks)
(ii) Outline four limitations of the cardinal approach to measuring utility. (4 marks)
QUESTION 28
November 2018 Question Three B
Examine six applications of indifference curve analysis in an economy. (6 marks)
QUESTION 29
May 2018 Question Four A
With the aid of a well labelled diagram, explain the law of diminishing marginal utility.
(6 marks)
QUESTION 30
May 2018 Question Four B
Outline four properties of indifference curves. (4 marks)
QUESTION 31
May 2018 Question Five D
With the aid of a diagram, explain why isoquants are negatively sloped. (5 marks)
TOPIC 4
THE THEORY OF A FIRM
QUESTION 1
April 2025 Question Two C
Explain FIVE applications of production possibility curves in economics. (10 marks)
QUESTION 2
April 2025 Question Five C
Using an appropriate diagram, illustrate the relationship between marginal product curve (MP) and average product curve (AP). (5 marks)
QUESTION 3
April 2025 Question Seven D
Identify FOUR factors that might influence the price of labour as a factor of production.
(4 marks)
QUESTION 4
December 2024 Question Two B
Identify SIX factors that determine the price of labour as a factor of production.(6 marks)
QUESTION 5
December 2024 Question Three A
Explain SIX causes of wage difference between the “industrial occupation” and the “agricultural occupation”. (6 marks)
QUESTION 6
December 2024 Question Five B
Highlight SIX drawbacks of collective bargaining agreement in relation to trade unions.
(6 marks)
QUESTION 7
December 2024 Question Six B
Summarise FOUR economic implications of rural-urban migration. (4 marks)
QUESTION 8
August 2024 Question One B
Describe FOUR types of labour mobility. (4 marks)
QUESTION 9
August 2024 Question Two A
Using a well labelled diagram, illustrate the regressive supply curve of labour. (6 marks)
QUESTION 10
April 2024 Question Four A
Enumerate FIVE challenges that could contribute to ineffectiveness of trade unions in developing countries. (5 marks)
QUESTION 11
April 2024 Question Five C and D
(c) With the help of a diagram, explain the relationship between the marginal cost curve and the average total cost curve. (5 marks)
(d) Outline FIVE objectives of minimum wage legislation. (5 marks)
QUESTION 12
April 2024 Question Six B
Ubromaxtek University has opened Satellite Campus in a neighbouring country. It has been estimated that the annual fixed cost of the Satellite Campus is USD 48,900. The fees to be charged per student and the variable cost per unit are USD 1,025 and USD 837 respectively.
Required:
Determine the number of students that Satellite Campus should enrol in order to break-even. (2 marks)
Using the level of enrolment in (b) (i) above, calculate the expected level of profits. (2 marks)
QUESTION 13
April 2024 Question Seven A (i) and B
(i) Explain the term “producer equilibrium” as used in economics. (2 marks)
With the help of a well labelled diagram, explain the stages of the law of diminishing returns. (6 marks)
QUESTION 14
December 2023 Question Four A
(i) Explain the term “optimal size of the firm”. (2 marks)
List SIX factors that determine the cost behaviour of a firm. (6 marks)
QUESTION 15
December 2023 Question Six D
Summarise SIX factors that may determine wages and salaries in an economy. (6 marks)
QUESTION 16
December 2023 Question Seven A and D
State FOUR factors that could influence the price of land as a factor of production.
marks)
(d) With the help of a well-labelled diagram, explain the relationship between the “long-run average cost curve” and the “short-run average cost curve”. (6 marks)
QUESTION 17
August 2023 Question Three A and B
(i) Explain the term “wage control”. (2 marks)
(ii) Summarise FIVE consequences of wage control by the government in your country. (5 marks)
Enumerate FIVE economies of scale that may be enjoyed by a manufacturing firm. (5 marks)
QUESTION 18
August 2023 Question Four D
Enumerate FIVE roles of trade unions in an economy. (5 marks)
QUESTION 19
April 2023 Question Five C
Enumerate SIX factors that influence the cost behaviour of a manufacturing firm.
(6 marks)
QUESTION 20
December 2022 Question One A
Enumerate FIVE functions of the World Trade Organisation (WTO). (5 marks)
QUESTION 21
December 2022 Question Three B
With the aid of a well labeled diagram, explain the THREE stages of production according to the law of diminishing marginal returns. (9 marks)
QUESTION 22
December 2022 Question Five D
Outline FOUR features of isoquant curves. (4 marks)
QUESTION 23
December 2022 Question Seven C
(i) Explain the law of variable proportions. (2 marks)
(ii) Enumerate FOUR assumptions underlying the law of variable proportions. (4 marks)
QUESTION 24
August 2022 Question Five B
Explain the term “optimal size of the firm” as used in the theory of cost. (2 marks)
Using a well labelled diagram, illustrate the optimal size of the firm. (3 marks)
QUESTION 25
August 2022 Question Five (c)
Explain the term “production function”. (2 marks)
Highlight five factors that influence the production function. (5 marks)
QUESTION 26
April 2022 Question Six A
(i) Describe three economic characteristics of enterprise as a factor of production.
(6 marks)
(ii) Explain four importance of profits in a market economy. (4 marks)
QUESTION 27
April 2022 Question Seven B
Summarise six demerits of minimum wage legislation in an economy. (6 marks)
QUESTION 28
December 2021 Question Two A
Examine six features of capital as a factor of production. (6 marks)
QUESTION 29
December 2021 Question Three C
Discuss five technical economies of scale. (10 marks)
QUESTION 30
December 2021 Question Four C
The marginal cost function of a certain firm is given by:
MC = 6Q + 4
Where = MC is the marginal cost function
Q is the level of output
Required:
(i) The total cost function. (2 marks)
(ii) The average fixed cost function. (2 marks)
(iii) The average variable cost function. (2 marks)
(iv) The level of output that would minimise the average variable cost. (3 marks)
(v) The level of output that would minimise the average total cost. (4 marks)
QUESTION 31
August 2021 Question One B
Explain the following terms in relation to labour as a factor of production:
Participation rate. (2 marks)
Real wages. (2 marks)
Labour productivity. (2 marks)
Derived demand. (2 marks)
QUESTION 32
August 2021 Question Two A
Explain the term “marginal factor cost”. (2 marks)
QUESTION 33
August 2021 Question Two D
With the help of a well labelled diagram, distinguish between “economic rent” and “quasi rent”. (6 marks)
QUESTION 34
May 2021 Question Five A
The total cost and demand functions of a firm operating under monopolistic competition are represented as follows:
TC=850-8Q+〖10Q〗^2
P=200
Where;
TC = Total Cost
Q = Output
P = +Price
Required:
Fixed cost function. (1 mark)
Variable cost function. (1 mark)
Average cost function. (1 mark)
Marginal cost function. (2 marks)
Marginal revenue function. (2 marks)
The level of output at which the firm breaks-even. (3 marks)
QUESTION 35
May 2021 Question Six C
With the use of a diagram, illustrate the optimal point of a firm. (4 marks)
QUESTION 36
May 2021 Question Seven B
(i) With a well labelled diagram, illustrate the concept of economic rent. (5 marks)
(ii) Explain how economic rent might be used as a good base for taxation. (3 marks)
QUESTION 37
November 2020 Question five C
Summarise four factors that might lead to an inward shift in the optimal point of a firm.
(4 marks)
QUESTION 38
November 2019 Question Two B
Explain five factors that lead to the external economies of scale in an economy.
(10 marks)
QUESTION 39
November 2019 Question Two C
Describe two assumptions of the law of variable proportions. (4 marks)
QUESTION 40
November 2019 Question three B
With the aid of a well labelled diagram, explain the concept of a backward bending supply curve of labour. (6 Marks)
QUESTION 41
May 2019 Question one C
Highlight six factors that might lead to a rightward shift of the optimal point of a firm.
(6 marks)
QUESTION 42
May 2019 Question Two C
The demand and average cost functions of a hypothetical firm are represented by the following functions (in thousands):
P=50 —Q
AC=100/Q —16 +2Q
Where:
P is the unit price in shillings.
Q is the quantity of output in units.
AC is the average cost in shillings.
Required:
(1) The total cost function. (1 mark)
(ii) The variable cost function. (1 mark)
(iii) The total profit of the firm When Q=10 units. (3 marks)
QUESTION 43
May 2019 Question Three B
Highlight six factors that determine the effectiveness of trade unions in a society.
(6 marks)
QUESTION 44
May 2019 Question Four C
Suggest five policy measures that could be adopted by a government to enhance geographical mobility of labour within a country. (5 marks)
QUESTION 45
May 2019 Question Four D
The table below shows the quantity of units produced by a certain firm and the corresponding total cost:
Units produced Total cost (Sh.”000″)
0 77
2 216
4 235
6 319
8 348
10 382
Required:
(i) The average variable costs when the units produced are 2, 6 and 10 respectively.
(3 marks)
(ii) The marginal costs of production for the 4th and 8th units respectively. (2 marks)
QUESTION 46
May 2019 Question seven B
With the aid of an appropriate diagram, explain the relationship between the short run average cost curve and the long run average cost curve. (4 marks)
QUESTION 47
November 2018 Question one D
Highlight five barriers to occupational mobility of labour. (5 marks)
QUESTION 48
November 2018 Question Three A
Summarise six characteristics of capital as a factor of production. (6 marks)
QUESTION 49
November 2018 Question Three C
Discuss four cases advanced by trade unions for increase in the wages of their members.
(8 marks)
QUESTION 50
May 2018 Question Seven C
The demand and total cost functions for a hypothetical firm are represented as follows:
P=100
TC=50 + 8Q^2
Where:
P is the price
TC is the total cost
Q is the quantity
Required:
(i) The marginal cost function. (2 marks)
(ii) The average fixed cost function. (2 marks)
(iii) The marginal revenue function. (2 marks)
(iv) The profit maximising level of output. (4 marks)
TOPIC 5
MARKET STRUCTURES
QUESTION 1
April 2025 Question Two B
Highlight SIX features of monopolistic competitive firms. (6 marks)
QUESTION 2
April 2025 Question Four A and C
Identify FIVE conditions that are necessary for effective use of price discrimination in an economy. (5 marks)
(c) Outline FIVE advantages of a perfectly competitive market. (5 marks)
QUESTION 3
December 2024 Question Five C
Outline FOUR features of monopolist competition. (4 marks)
QUESTION 4
August 2024 Question Six C
Using a well labelled diagram, illustrate the long-run equilibrium of a monopoly firm.
(7 marks)
QUESTION 5
August 2024 Question Seven C
A firm operating in a perfectly competitive market has the demand and total cost functions represented by the following:
P = 40 – 60Q
TC = 100 + 50Q – 80Q2
Where:
P = Price
Q = Quantity
TC = Total cost
Determine:
Average fixed cost function. (2 marks)
Average variable cost function. (2 marks)
Marginal cost function. (2 marks)
QUESTION 6
April 2024 Question One D
State FOUR disadvantages of a perfectly competitive market. (4 marks)
QUESTION 7
December 2023 Question One C
Describe FOUR characteristics of a perfectly competitive market. (4 marks)
QUESTION 8
December 2023 Question Six C
With the aid of a diagram, explain why the marginal revenue curve lies below the average revenue curve under monopoly. (5 marks)
QUESTION 9
August 2023 Question Two C
Using a well labelled diagram, illustrate the shutdown point of a firm operating under perfect competition. (7 marks)
QUESTION 10
August 2023 Question Four B
The demand and total cost function of a firm operating under perfect competition are given as: P = 45 – 4Q
TC = 44 + 15Q
Where;
P represents price
Q represents quantity
TC represents total cost
Required:
Determine the sufficient condition for profit maximisation of the firm. (3 marks)
Determine the firm’s price for profit maximisation. (2 marks)
QUESTION 11
April 2023 Question One A
Identify SIX conditions necessary for price discrimination under monopoly.
(6 marks)
QUESTION 12
April 2022 Question Two
With the aid of appropriate diagrams, describe three properties of indifference curves. (9 marks)
With reference to the theory of consumer behaviour, highlight five assumptions of maximisation of utility. (5 marks)
Examine three applications of the concept of consumer surplus in economies.
(6 marks)
QUESTION 13
December 2021 Question Two C
State six conditions that are necessary for effective price discrimination by a monopolist.
(6 marks)
QUESTION 14
December 2021 Question Six A
Discuss five differences between monopoly and monopolistic market structures.
(10 marks)
QUESTION 15
August 2021 Question Five A and B
(a) Collusion may be a feature of an oligopolistic market.
With reference to the above statement, explain the term “collusion”. (2 marks)
(b) Collusive practices may be undermined by price wars.
Assess three benefits that might accrue to consumers as a result of price wars by firms. (6 marks)
QUESTION 16
August 2021 Question Six A
(i) Explain the term “price discrimination”. (2 marks)
(ii) Using examples in each case, examine three types of price discrimination.
(9 marks)
QUESTION 17
November 2020 Question Three A
Examine three sources of monopoly power. (6 marks)
QUESTION 18
November 2020 Question Three B
With the aid of a well labeled diagram, explain the equilibrium level of a firm operating under monopolistic market structure in the long run. (6 marks)
QUESTION 19
November 2019 Question Three C
A firm operating under perfect competition observed that:
1. At a unit price of Sh.20 of product “R”, 600 units were sold.
2. At an increased price of Sh.70, the sales of product “R” decreased by 500 units.
3. The relationship between the price of product “R” and the quantity sold of product “R” is linear.
4. The total cost (TC) of product “R” is given by the function:
TC=0.9q^2 + 30q + 1,000
Where q is the quantity of product “R” produced and sold.
Required:
(i) The revenue function of product “R”. (4 marks)
(ii) The profit earned at equilibrium. (4 marks)
(iii) The equilibrium price. (2 marks)
QUESTION 20
May 2019 Question One B
(i) Distinguish between “perfect oligopoly” and “imperfect oligopoly”. (2 marks)
(ii) Describe three methods used in fixing prices under the oligopoly market structure.
(6 marks)
QUESTION 21
May 2019 Question Four A
With the aid of a well labeled diagram, explain the equilibrium level of a firm operating under an oligopostic market structure
QUESTION 22
November 2018 Question Four B
State four advantages and four disadvantages of a monopoly market structure in an economy. (8 marks)
QUESTION 23
November 2018 Question Four D
A firm operating under a monopoly market structure has the following demand and cost functions:
P = 140 – 2Q
TC = 10 + 5Q^2
Where:
P is the price in thousands of shillings.
Q is the quantity of output in thousands of units. TC is the total cost in thousands of shillings.
Required:
The maximum level of profit of the firm. (4 marks)
QUESTION 24
November 2018 Question Five C
Using appropriate diagrams, analyse the following levels of output of a monopolist firm in the short-run period:
(i) The profit maximising level of output. (5 marks)
(ii) The loss making level of output. (5 marks)
QUESTION 25
May 2018 Question Three C
With the aid of a well labelled diagram, explain a normal profit making firm under oligopoly in the short-run. (5 marks)
QUESTION 26
May 2018 Question Six C
With the help of a diagram, justify why the condition that marginal revenue equals to marginal cost (MR= MC) is only a necessary but not a sufficient condition for maximisation. (6 marks)
TOPIC 6
NATIONAL INCOME
QUESTION 1
April 2025 Question Three D
Distinguish between the “fiscal multiplier” and the “export multiplier”. (4 marks)
QUESTION 2
April 2025 Question Seven A
The following data represents estimated national income of an economy in millions of shillings:
Gross national product (at market prices) = 498.5
Depreciation allowance = 56.0
Indirect taxes less subsidies = 52.4
Business taxes = 13.5
Personal income taxes = 76.2
Government transfers = 68.2
Retained profits = 15.0
Required:
Determine the following:
Net National Product at market price. (2 marks)
Disposable income. (2 marks)
Personal income. (2 marks)
Net National Income at factor cost. (2 marks)
QUESTION 3
August 2024 Question Three C
The following information represents the national income of country X in billions of shillings. C = 220 + 0.8Y^d
T = 30 + 0.1Y
I = 70
G = 20
Where: C = Consumption expenditure
T = Taxes
G = Government expenditure
Y^d = Disposable income
Required:
The marginal propensity to save. (2 marks)
The multiplier. (2 marks)
The consumption expenditure. (2 marks)
The equilibrium level of national income and taxes. (2 marks)
QUESTION 4
August 2024 Question Seven A
Using well labelled diagrams, distinguish between “inflationary gap” and “deflationary gap” as used in national income statistics. (10 marks)
QUESTION 5
April 2024 Question One C
Using a well labelled diagram, illustrate the circular flow of income in an open economy with no government interference. (6 marks)
QUESTION 6
April 2024 Question Three B
The following information relates to a given economy:
Marginal prospensity to save (MPS) = 0.2
Autonomous consumption = 400
Required:
Formulate the consumption function. (3 marks)
Determine the change in National Income if the Government’s expenditure was to increase by 50%. (3 marks)
QUESTION 7
April 2024 Question Six D
The following information relate to the national income figures of a certain economy in billions of shillings:
Year Nominal Gross National Product (GNP) Real GNP
2000 1,359 1,359
2010 2,857 1,623
Required:
Determine the GNP implicit price deflator. (3 marks)
Calculate the rate of inflation. (3 marks)
QUESTION 8
August 2023 Question Two A
Outline FIVE challenges that economic planners are likely to encounter when using the income approach to estimate the level of national income in least developed countries.
(5 marks)
QUESTION 9
August 2023 Question Four C
Identify FIVE factors that limit the application of the accelerator principle in an economy. (5 marks)
QUESTION 10
August 2023 Question Five A
The following information relates to a hypothetical economy:
Autonomous consumption = 8000
Marginal propensity to save (MPS) = 0.45
Required:
Derive the savings function. (3 marks)
If the level of government expenditure increases by 250%, determine the change in equilibrium level of national income. (2 marks)
QUESTION 11
April 2023 Question Two A
(a) (i) Explain the term “Gini Coefficient” as used in economics. (2 marks)
(ii) Describe THREE principles of the Gini Coefficient. (6 marks)
QUESTION 12
December 2022 Question Two A
List FOUR components of disposable national income. (4 marks)
QUESTION 13
August 2022 Question Six B
The data provided below represent the national income model of a certain economy in billions of shillings:
Y = C + I + G + (X – M)
C = 200 + 0.8Y^d
T = 20 + 0.2Y
I = 70
G = 50
X = 40
M = 60
Where:
Y = National income
C = Consumption expenditure
I = Investment
G = Government expenditure
Y^d = Disposable income
T = Taxes
X = Export
M = Import
Required:
The equilibrium level of:
National income. (5 marks)
Consumption. (3 marks)
Taxes. (2 marks)
QUESTION 14
April 2022 Question Three
(i) Explain four assumptions underlying the theory of imperfect competition.
(8 marks)
(ii) With an aid of a diagram, explain the long run equilibrium of a firm operating in imperfect competition. (6 marks)
Explain six factors that influence the mobility of labour as a factor of production.
(6 marks)
QUESTION 15
December 2021 Question Six B
The following data relate to the nominal and real gross national product (GNP) levels for a hypothetical economy for
the years 2011 and 2019:
Year Nominal GNP Real GNP
“Sh.billion” “Sh.billion”
2011 1,185.90 1,185.90
2019 2,633.00 1,474.00
Required:
The implicit GNP price deflator for the years 2011 and 2019. Interpret your results. (5 marks)
The inflation rate of the economy, using year 2011 as the base year. (5 marks)
QUESTION 16
August 2021 Question Three B
With the aid of an illustration, describe the circular flow of income for a closed economy with the existence of the government. (8 marks)
QUESTION 17
August 2021 Question Four A and C
(a) Identify three uses of consumer surplus. (6 marks)
(c) Highlight five implications of a deflationary gap in an economy. (5 marks)
QUESTION 18
August 2021 Question Five C
You have been provided with the following data for country Z:
Gross national product at current market prices $400 million
Price subsidies $10 million
Depreciation $24 million
Indirect taxes $60 million
Required:
Determine the value of each of the following:
(i) Gross national product at factor cost. (3 marks)
(ii) Net national product at factor cost. (3 marks)
QUESTION 19
August 2021 Question Seven B
The data below represents the national income of a certain economy in trillions of shillings:
Y = C+I+G+ (X – M)
C = 100 + 0.6Y^d
T= 10+0.2Y
I = 40
G = 50
(X — M) = 30
Where: Y = National Income
C = Consumption expenditure
I = Investment
G = Government expenditure
Y^d = Disposable income
T = Taxes
X = Exports
M = Imports
Required:
The equilibrium level of:
(i) National income. (5 marks)
(ii) Consumption. (3 marks)
(iii) Taxes. (2 marks)
QUESTION 20
November 2020 Question Five B
Explain the relationship between the multiplier and the accelerator. (4 marks)
Evaluate four benefits that might accrue to an economy as a result of accelerator effect. (8 marks)
QUESTION 21
November 2019 Question Four A
The per capita income of a hypothetical country increased by 20% from the year 2015 to year 2018.
Despite this increase in per capita income, the residents of the country felt that their living standards were deteriorating.
Required:
Discuss five reasons that might have led to this feeling by the residents. (10 marks)
QUESTION 22
November 2019 Question Four B
Describe three methods that could be used to measure the national income of a country.
(6 marks)
QUESTION 23
November 2019 Question Four B
The following are the consumption and investment functions of country Y in Sh. “Billion”.
C=200+0.8Y
I=400
Where:
C is Consumption
Y is Income
I is Investment
Required:
Calculate the aggregate spending at equilibrium level. (4 marks)
QUESTION 24
May 2019 Question Five D
The following data relate to the consumption function of a hypothetical economy in millions of shillings:
C=300+0.6y
Where:
C is the consumption function
Y is the national income.
Required:
(i) The investment function. (1 marks)
(ii) Discuss seven factors that determine the level of consumption in an economy.
(7 marks)
QUESTION 25
May 2019 Question seven A
Argue six cases against the use of national income statistics to compare the standards of living between countries. (6 marks)
QUESTION 26
November 2018 Question Four C
The marginal propensity to save of a certain hypothetical economy is given as 0.25.
Required:
The change in the equilibrium level of national income, if the level of investments for the economy increases by Sh.300 million. (3 marks)
QUESTION 27
November 2018 Question Six B
Examine seven determinants of the level of national income of a country. (7 marks)
QUESTION 28
November 2018 Question seven C
The data provided below represent economic transactions for a hypothetical country in billions of shillings:
Total output Intermediate purchases
Agricultural sector 55,000 24,000
Manufacturing sector 96,000 63,000
Service sector 71,000 42,000
The indirect taxes and fixed assets depreciation amount to Sh.22,000 billion and Sh.26,000 billion respectively.
Required:
(i) The Gross National Product using the value added approach. (2 marks)
(ii) Net Domestic Product at market price. (2 marks)
(iii) Net Domestic Product at factor cost. (2 marks)
QUESTION 29
May 2018 Question Six B
In a hypothetical economy X. autonomous consumption equals to 800 and the marginal propensity to save equals to 0.25.
Required:
(i) Formulate the consumption function. (2 marks)
(ii) If the level of investment increased by Sh.1,000 million, determine the change in equilibrium national income. (4 marks)
TOPIC 7
ECONOMIC GROWTH, ECONOMIC DEVELOPMENT AND ECONOMIC PLANNING
QUESTION 1
April 2025 Question One C
Identify EIGHT policy measures that could be adopted by developing countries to encourage industrial development. (8 marks)
QUESTION 2
April 2025 Question Five A
Highlight FIVE limitations of economic planning in developing countries. (5 marks)
QUESTION 3
April 2025 Question Six B
Describe FIVE ways in which a government may influence allocation of resources.
(5 marks)
QUESTION 4
December 2024 Question One B
State FOUR challenges associated with regional economic integration in developing countries. (4 marks)
QUESTION 5
December 2024 Question Three B
Summarise SIX measures that the governments in developing countries may put in place to spur growth in the informal sector. (6 marks)
QUESTION 6
December 2024 Question Five D
Explain FOUR positive environmental impacts of economic growth. (4 marks)
QUESTION 7
December 2024 Question Seven A
Outline SIX challenges developing countries face due to over reliance on foreign aid.
(6 marks)
QUESTION 8
August 2024 Question Two C and D
Enumerate FOUR challenges of capping interest rates in a country. (4 marks)
Describe FOUR strategies that developing countries might apply to correct the balance of payment deficit. (4 marks)
QUESTION 9
August 2024 Question Four A
State FIVE factors that limit the success of economic integration in developing countries.
(5 marks)
QUESTION 10
April 2024 Question Four D
Propose FIVE policy measures that the government of a country could take to accelerate economic development. (5 marks)
QUESTION 11
April 2024 Question Five B
Outline FIVE reasons why the high cost of living is a major policy issue in developing countries. (5 marks)
QUESTION 12
April 2024 Question Six A
Identify FIVE obstacles to economic growth and development in developing countries.
(5 marks)
QUESTION 13
December 2023 Question One A
(i) Explain the term “economic planning”. (2 marks)
(ii) Argue FOUR cases in favour of government investment in the process of economic planning. (4 marks)
QUESTION 14
December 2023 Question Three B
Describe SIX roles of industry in economic development of the least developed countries. (6 marks)
QUESTION 15
August 2023 Question One D
State THREE determinants of economic development. (3 marks)
QUESTION 16
April 2023 Question Six C
Explain FOUR negative effects of increased government spending on economic growth.
(8 marks)
QUESTION 17
December 2022 Question Two B
Explain SIX problems that an economist could encounter when comparing welfare between different countries. (6 marks)
QUESTION 18
December 2022 Question Four C
State SIX policy measures that a country could adopt to avoid the risk of not being able to honour her foreign debts. (6 marks)
QUESTION 19
December 2022 Question Seven A
Outline SIX characteristics of a good economic development plan. (6 marks)
QUESTION 20
August 2022 Question One B
Explain five reasons why income inequalities are a major policy issue in developing countries. (10 marks)
QUESTION 21
August 2022 Question Two A
Identify five requirements for proper economic planning. (5 marks)
QUESTION 22
August 2022 Question Three A
Evaluate five causes of market failure in an economy. (10 marks)
QUESTION 23
August 2022 Question Seven A
Explain six roles played by foreign investment in least developed countries. (6 marks)
QUESTION 24
August 2022 Question Seven B
Highlight six policy measures that may be put in place to combat unemployment in developing countries. (6 marks)
QUESTION 25
April 2022 Question Four B
The table below shows the total variable cost of a firm at different production levels:
Level of output Total variable cost
Sh.
0 0
1 60,000
2 110,000
3 140,000
4 150,000
5 150,000
6 170,000
7 210,000
8 260,000
The total fixed cost of the company is Sh.150,000.
Required:
The average cost of production for each output level. (4 marks)
The marginal cost of production for each output level. (4 marks)
The profit maximising level of output. (2 marks)
QUESTION 26
April 2022 Question Seven A and C
(i) With reference to economic growth and development, explain the term “potential growth”. (2 marks)
ii) Examine six benefits of economic growth and development. (6 marks)
(c) Identify six strategies that the government may adopt to promote the informal sector in developing countries. (6 marks)
QUESTION 27
December 2021 Question Four B
Outline five factors that determine the economic development of a country. (5 marks)
QUESTION 28
August 2021 Question Six B
Identify four effects of Covid-19 pandemic on the world economy. (4 marks)
QUESTION 29
May 2021 Question Three C
Kenya, which is currently ranked as a developing country, came up with an economic blueprint geared towards realising economic development by the year 2030.
Required:
Describe five factors that might hinder Kenya from realising the above objective.
(5 marks)
Outline measures, that might be put in place in order to overcome the impediments in (c) (i) above. (5 marks)
QUESTION 30
May 2021 Question Six A
(i) Describe the term “economic integration”. (2 marks)
(ii) Highlight six factors that limit successful economic integration in developing countries. (6 marks)
QUESTION 31
May 2021 Question Seven C
With the aid of a diagram distinguish between “actual economic growth” and “potential economic growth”. (5 marks)
QUESTION 32
November 2020 Question Four C
Explain the term “economic planning”. (2 marks)
QUESTION 33
November 2020 Question Four D
Highlight six characteristics of a good economic (6 marks)
QUESTION 34
November 2019 Question Seven A
Enumerate five causes of inequalities in the distribution of income and wealth in an economy. (5 marks)
QUESTION 35
November 2019 Question Seven B
Explain five benefits of development planning in an economy. (5 marks)
QUESTION 36
May 2019 Question Six C
Explain six causes of high levels of external debt in developing countries. (6 marks)
QUESTION 37
November 2018 Question seven B
Analyse six obstacles to industrial development in developing countries. (6 marks)
QUESTION 38
May 2018 Question Three D
Highlight five determinants of economic development in a country. (5 marks)
TOPIC 8
MONEY AND BANKING
QUESTION 1
April 2025 Question One B
Analyse the THREE motives of holding money as advanced by the Keynesian liquidity preference theory. (6 marks)
QUESTION 2
April 2025 Question Three B
Identify FIVE positive effects of high interest rates in an economy. (5 marks)
QUESTION 3
April 2025 Question Four B and D
Explain FOUR functions of money. (4 marks)
(d) Summarise SIX factors that might determine the exchange rate of a country’s currency. (6 marks)
QUESTION 4
April 2025 Question Six D
Explain THREE conditions necessary for devaluation of a currency to be effective.
(6 marks)
QUESTION 5
December 2024 Question One A and C
(i) Explain the term “credit creation”. (2 marks)
Describe THREE factors that limit the effectiveness of credit creation by commercial banks. (6 marks)
(c) (i) Enumerate FOUR causes of a budget deficit in an economy. (4 marks)
(ii) Highlight FOUR policy measures that could be adopted to correct a budget deficit. (4 marks)
QUESTION 6
December 2024 Question Two C
Outline FIVE functions of financial intermediaries. (5 marks)
QUESTION 7
December 2024 Question Four A
The commodity and money market for a certain economy is given by the following functions: Commodity market
C = 500 + 0.64Y
I = 1720 + 12r
Money market
M_S1,400
M_DT = 0.5Y
M_DS = 600 – 10r
Required:
Derive the IS function. (5 marks)
Derive the LM function. (5 marks)
Determine the equilibrium rate of interest and equilibrium level of national income. (4 marks)
QUESTION 8
August 2024 Question One C
Enumerate FOUR challenges of capping interest rates in a country. (4 marks)
QUESTION 9
August 2024 Question Three A
Outline SIX roles played by commercial banks in the economic development of a country. (6 marks)
QUESTION 10
August 2024 Question Four D
Highlight FIVE limitations of the quantity theory of money. (5 marks)
QUESTION 11
August 2024 Question Six B
Explain FOUR determinants of money supply in an economy. (8 marks)
QUESTION 12
April 2024 Question Three A
Explain the term “monetary policy”. (2 marks)
Identify FOUR objectives of fiscal policies. (4 marks)
QUESTION 13
April 2024 Question Seven C
Explain FOUR monetary policies that the central bank of a country might apply to control inflation. (4 marks)
QUESTION 14
December 2023 Question One B
Examine FIVE roles of the central bank in an economy. (5 marks)
QUESTION 15
December 2023 Question Seven C
Using an appropriate diagram, explain how a fiscal policy may be used to control a deflationary gap in an economy. (6 marks)
QUESTION 16
August 2023 Question Two B
Explain the term “credit creation”. (2 marks)
Describe THREE factors that limit the effectiveness of credit creation by commercial banks in your country. (6 marks)
QUESTION 17
August 2023 Question Five D
Identify FOUR objectives of fiscal policies. (4 marks)
QUESTION 18
August 2023 Question Six C
Explain the term “legal tender”. (2 marks)
With the aid of a diagram, explain the concept of liquidity trap. (6 marks)
QUESTION 19
April 2023 Question Three A
Describe FOUR factors that determine the supply of money in an economy. (8 marks)
QUESTION 20
April 2023 Question Four
(a) The commodity and money markets for a certain economy is given by the following functions:
Commodity market
C = 400 + 0.45y
I = 1700 + 18r
Money market
MS = 1600
M_DT = 0.25y
M_DS = 800 – 12r
Required:
Derive the IS function. (3 marks)
Derive the LM function. (5 marks)
Determine the equilibrium rate of interest. (2 marks)
Determine the equilibrium level of national income. (2 marks)
(b) Explain the following types of multipliers as used in economics:
Investment multiplier. (2 marks)
Government multiplier. (2 marks)
Export multiplier. (2 marks)
Consumption multiplier. (2 marks)
QUESTION 21
December 2022 Question One B
Describe THREE Ways in which banks create credit (10 Marks)
QUESTION 22
December 2022 Question Four B
Explain THREE factors that influence the level of interest rates in an economy.(6 marks)
QUESTION 23
December 2022 Question Six C
Discuss THREE motives of holding money as advanced by the Keynesian liquidity preference theory. (6 marks)
QUESTION 24
August 2022 Question One C
Highlight five factors that determine the transactionary and precautionary demand for money. (5 marks)
QUESTION 25
August 2022 Question two B
Discuss five criticisms of liquidity preference theory (10 Marks)
QUESTION 26
August 2022 Question Three B
Explain the term “money illusion”. (2 marks)
QUESTION 27
April 2022 Question Six B
Summarise four impacts of expansionary monetary policy in an economy. (4 marks)
QUESTION 28
December 2021 Question Three A and B
(a) Summarise four effects of expansionary fiscal policy in an economy. (4 marks)
(b) Describe six qualities of money as a medium of exchange. (6 marks)
QUESTION 29
December 2021 Question Five C
Explain four limitations of the loanable funds theory of interest rates. (8 marks)
QUESTION 30
August 2021 Question Three C
Analyse three factors that may limit independence of the central bank in carrying out its mandate in an economy. (6 marks)
QUESTION 31
August 2021 Question Seven A
(a) (i) Explain the term “credit creation”. (2 marks)
(ii) Evaluate four factors that limit the effectiveness of credit creation by commercial banks. (8 marks)
QUESTION 32
May 2021 Question Two A
Highlight the effects of removing interest rate capping in an economy. (5 marks)
QUESTION 33
May 2021 Question Four A
Examine six causes of a deflationary gap in an economy. (6 marks)
QUESTION 34
May 2021 Question Four B
(i) Define the term “monetary policy”. (2 marks)
(ii) Explain five objectives of monetary policy in an economy. (5 marks)
QUESTION 35
May 2021 Question seven A
Enumerate seven roles of commercial banks in an economy (7 marks)
QUESTION 36
November 2020 Question Five A
Enumerate four factors that determine the velocity of money in circulation. (4 marks)
QUESTION 37
November 2020 Question Six A
Justify five reasons for differential interest rates in an economy. (5 marks)
QUESTION 38
November 2020 Question Six B
With the aid of a diagram, describe the concept of liquidity trap. (4 marks)
QUESTION 39
November 2020 Question Six C
Using suitable examples, provide three reasons for interest rate decontrol in an economy.
marks)
QUESTION 40
November 2020 Question Six D
Summarise five reasons that make it possible for commercial banks to create credit.
(5 marks)
QUESTION 41
November 2019 Question Five A
Examine four benefits of a contractionary monetary policy to an economy. (4 marks)
QUESTION 42
May 2019 Question One A
(i) Explain the Keynesian liquidity preference theory of demand for money. (1 mark)
(ii) Outline five criticisms of the theory in (a) (i) above. (5 marks)
QUESTION 43
May 2019 Question Six D
Analyse five functions of non-banking financial institutions in an economy. (5 marks)
QUESTION 44
May 2019 Question seven C
The following information relates to the commodity and money markets of a certain closed economy in millions of shillings:
Commodity market
C = 200 + 0.4y
I=1,900-12r
Money market
MDT = 0.5y
MDS = 100-l0r
MS=1,500
Where:
C = Consumption function
Y = National income
I = Investment function
R = Rate of interest
MDT = Precautionary and transactionary demand for money
MDS=Speculative demand for money
MS =Money supply
Required:
(i) The IS function. (3 marks)
(ii) The LM function. (3 marks)
(iii) The equilibrium level of interest rate. (2 marks)
(iv) The equilibrium level of national income. (2 marks)
QUESTION 45
November 2018 Question Five A
Explain five negative effects of a contractionary monetary policy in an economy.
(5 marks)
QUESTION 46
May 2018 Question Two A
Examine four determinants of’ money supply in an economy. (8 marks)
QUESTION 47
May 2018 Question Five B
Suggest three methods that the government of a country might adopt to strengthen its currency. (3 marks)
QUESTION 48
May 2018 Question Five C
Explain five differences between the “quantity theory of money” and the “liquidity preference theory of money”. (10 marks)
TOPIC 9
INFLATION AND UNEMPLOYMENT
QUESTION 1
April 2025 Question Seven B
Outline THREE causes of cost-push inflation. (3 marks)
QUESTION 2
April 2024 Question Two D
Summarise FOUR types of unemployment in least developed countries. (4 marks)
QUESTION 3
December 2023 Question Three C
Outline FIVE reasons why urban unemployment is a major policy issue in developing countries. (6 marks)
QUESTION 4
August 2023 Question One B
Explain FOUR types of unemployment. (8 marks)
QUESTION 5
April 2023 Question Three C
Outline SEVEN demerits of inflation targeting. (7 marks)
QUESTION 6
December 2022 Question Two D
Identify FIVE reasons why unemployment is a major policy issue in developing countries. (5 marks)
QUESTION 7
December 2022 Question Three C
Explain THREE limitations of the consumer price index. (6 marks)
QUESTION 8
December 2022 Question Five A and B
Explain the following types of inflation:
Cost push. (2 marks)
Credit. (2 marks)
Demand pull. (2 marks)
State SIX policy measures that could be adopted by developing countries to encourage industrial development. (6 marks)
QUESTION 9
August 2022 Question Three C
Assess four ways in which inflation affects the functions of money. (8 marks)
QUESTION 10
April 2022 Question Five
(a) The following table shows the level of National income (Y), Consumption (C), Investment (I), Government Spending (G), Exports (X) and Imports (M) of an utopian country for the years 2020 and 2021:
Year Y C I G X M
$ $ $ $ $ $
2020 80,000 ? 10,000 40,000 100,000 120,000
2021 90,000 56,000 15,000 34,000 110,000 ?
Required:
Compute the following:
The level of consumption in the year 2020. (3 marks)
The marginal propensity to consume. (2 marks)
The level of imports for the year 2021. (3 marks)
The marginal propensity to import. (2 marks)
(b) (i) Explain the term “per capita income”. (2 marks)
(ii) Enumerate four limitations of using per capita income as a measure of welfare.
(4 marks)
(c) Highlight four factors that limit the effectiveness of the multiplier in developing countries. (4 marks)
QUESTION 11
April 2022 Question Six C
Citing real life examples, distinguish between the following types of unemployment:
(i) “Seasonal unemployment” and “casual unemployment”. (3 marks)
(ii) “Disguised unemployment” and “unproductive unemployment”. (3 marks)
QUESTION 12
December 2021 Question Four A
Citing an example, explain the term “hidden unemployment”. (2 marks)
QUESTION 13
December 2021 Question Seven A
(i) Define the term “inflation targeting”. (1 mark)
(ii) State four disadvantages of inflation targeting in a country. (4 marks)
QUESTION 14
August 2021 Question Two C
Justify five reasons why devaluation in developing countries tends to be inflationary.
(5 marks)
QUESTION 15
May 2021 Question Four C
Assess seven reasons why developing countries are concerned about the high rate of unemployment in their countries. (7 marks)
QUESTION 16
November 2020 Question Four B
Differentiate between “seasonal unemployment” and “frictional unemployment”.
(4 marks)
QUESTION 17
November 2019 Question Five D
With the aid of a well labelled diagram, explain the trade-off between inflation and unemployment level (4 marks)
QUESTION 18
May 2019 Question A
Differentiate between “demand deficient unemployment” and “disguised unemployment” as used in economics. (2 Marks)
QUESTION 19
May 2019 Question B
Enumerate four effects of inflation on the functions of money. (4 marks)
QUESTION 20
November 2018 Question Six A
Suggest six measures that developing countries could adopt to curb against high levels of urban unemployment. (6 marks)
QUESTION 21
November 2018 Question Seven A
(i) Explain the term “hyperinflation” as used in economics. (1 mark)
(ii) With the help of a diagram, describe demand pull inflation. (4 marks)
(iii) Highlight three causes of demand pull inflation in an economy. (3 marks)
QUESTION 22
May 2018 Question One A
Discuss five negative effects of inflation in an economy. (10 marks)
QUESTION 23
May 2018 Question One A
Explain five conditions that could favour effective use of price discrimination in an economy. (10 marks)
QUESTION 24
May 2018 Question Four C
Discuss five ways in which inflation ‘night cause unemployment in an economy.
(10 marks)
QUESTION 25
May 2018 Question seven A
Highlight five negative effects of unemployment in an economy. (5 marks)
QUESTION 26
May 2018 Question seven B
Summarise five consequences of wage control. (5 marks)
TOPIC 10
AGRICULTURE AND INDUSTRY
QUESTION 1
April 2025 Question Five B
Explain FOUR advantages of localisation of industries in a country. (4 marks)
QUESTION 2
December 2024 Question Seven D
Explain FOUR challenges facing the agricultural sector in developing countries.
(4 marks)
QUESTION 3
August 2024 Question Seven B
Highlight FOUR principles of a good tax system. (4 marks)
QUESTION 4
April 2024 Question One B
Explain THREE reasons for the fluctuation of commodity prices in the agricultural sector. (6 marks)
QUESTION 5
April 2024 Question Seven D
Outline THREE measures that developing countries might use to promote agricultural production. (3 marks)
QUESTION 6
December 2023 Question Five C
Outline SIX demerits of delocalisation of industries. (6 marks)
QUESTION 7
April 2023 Question Three B
Identify FIVE tax measures that a government could adopt to spur growth in the agricultural sector. (5 marks)
QUESTION 8
August 2022 Question Six A
Outline five challenges faced by the agricultural sector in developing countries.
(5 marks)
Suggest five policy measures that should be put in place by developing countries to help improve the agricultural sector. (5 marks)
QUESTION 9
August 2021 Question Two E
Using a suitable example, explain the term “transfer payments”. (2 marks)
QUESTION 10
August 2021 Question Three A
Highlight six economic factors that may contribute to poor performance of the agricultural sector in developing countries. (6 marks)
QUESTION 11
November 2020 Question one A
Explain four methods used by the government to stabilise agricultural prices. (4 marks)
QUESTION 12
May 2019 Question Four B
Summarise five reasons why the prices of agricultural products fluctuate more than the prices of manufactured products. (5 marks)
QUESTION 13
May 2018 Question three B
Suggest your reasons why waves in the agricultural sector tend to be lower than wages in the industrial sector. (1 marks)
TOPIC 11
INTERNATIONAL TRADE AND FINANCE
QUESTION 1
April 2025 Question Seven C
Explain FIVE arguments against international trade restrictions. (5 marks)
QUESTION 2
December 2024 Question Two A
Explain FIVE disadvantages of adopting a dual exchange rate regime in an economy.
(5 marks)
QUESTION 3
December 2024 Question Six D
Analyse FOUR causes of unfavourable balance of payment in developing countries.
(4 marks)
QUESTION 4
December 2024 Question Seven C
Discuss FOUR restrictions to international trade. (4 marks)
QUESTION 5
August 2024 Question One D
Describe FOUR strategies that developing countries might apply to correct the balance of payment deficit. (4 marks)
QUESTION 6
August 2024 Question Three B
Argue SIX cases for restrictions in international trade. (6 marks)
QUESTION 7
August 2024 Question Four B and C
(b) Distinguish between “debt distress” and “debt conversion”. (4 marks)
Outline SIX methods that may be adopted to clear external debts in developing countries. (6 marks)
QUESTION 8
August 2024 Question Five B
Discuss THREE forms of economic integration in relation to international trade.
(6 marks)
QUESTION 9
August 2024 Question Six A
State FIVE features that influence the level of Foreign Direct Investment (FDI).(5 marks)
QUESTION 10
April 2024 Question Two B
Argue THREE cases in favour of Foreign Direct Investment (FDI) in least developed countries. (3 marks)
QUESTION 11
April 2024 Question Five A
Explain FIVE disadvantages of a managed floating exchange rate. (5 marks)
QUESTION 12
December 2023 Question One D
Explain FIVE causes of rising foreign debt in least developed countries. (5 marks)
QUESTION 13
December 2023 Question Two A
Highlight SIX causes of deficits in the balance of payment. (6 marks)
QUESTION 14
December 2023 Question Three A
Discuss FOUR sets of economic reforms that the Bretton Woods financial institution may impose on a country. (8 marks)
QUESTION 15
August 2023 Question Three C
Describe FOUR ways in which a government might restrict international trade. (8 marks)
QUESTION 16
August 2023 Question Five B
Outline FIVE advantages of trade liberalisation to traders. (5 marks)
QUESTION 17
August 2023 Question Six A
(i) Explain the term “Structural Adjustment Programmes” (SAPs). (2 marks)
Discuss THREE criticisms of SAPs in least developed countries. (6 marks)
QUESTION 18
August 2023 Question Seven C
Describe SIX arguments in favour of regional integration in relation to international trade. (6 marks)
QUESTION 19
April 2023 Question One C
List FIVE measures that may be adopted to correct income inequalities in developing countries. (5 marks)
QUESTION 20
April 2023 Question Two B
State SEVEN roles of the World Bank Group to a member state. (7 marks)
QUESTION 21
April 2023 Question Five A
Most developing countries are faced with a problem of high external debts.
As an economist, outline EIGHT policy measures that the developing countries could put in place to minimise the problem of rising external debt. (8 marks)
QUESTION 22
April 2023 Question Six B
Identify SIX advantages of economic integration to the member states. (6 marks)
QUESTION 23
December 2022 Question Five C
Enumerate FOUR factors that could determine the effectiveness of trade unions.
(4 marks)
QUESTION 24
August 2022 Question Two C
Examine five disadvantages of trade unions in an economy. (5 marks)
QUESTION 25
April 2022 Question Four A
Assess five forms of economic integration as used in international trade. (10 marks)
QUESTION 26
December 2021 Question Five A and B
Highlight five advantages of using a free exchange rate system in an economy.
(5 marks)
Enumerate seven criticisms levelled against the theory of comparative advantage.
(7 marks)
QUESTION 27
December 2021 Question Seven C
Outline seven limitations of regional economic integration in developing countries.
(7 marks)
QUESTION 28
August 2021 Question Five D
Discuss three roles played by the International Monetary Fund (IMF) in the world economy. (6 marks)
QUESTION 29
May 2021 Question Five B
Examine five reasons for deteriorating terms of trade for developing countries.
(10 marks)
QUESTION 30
May 2021 Question Six B
Examine four advantages of currency devaluation to a country’s economy. (8 marks)
QUESTION 31
November 2020 Question seven A
Summarise six corrective measures that developing countries should institute to correct the persistent deficits in their balance of payments position. (6 marks)
QUESTION 32
November 2020 Question seven B
Discuss four policy recommendations that developing countries should institute to reduce regional imbalances in their economies. (8 marks)
QUESTION 33
November 2020 Question seven C
Justify six reasons why external debt problems is a major policy issue in developing countries. (6 marks)
QUESTION 34
November 2019 Question Five B and C
Explain six factors that determine the level of induced investments in an economy.
(6 marks)
QUESTION 35
November 2019 Question Five C
The value of money varies inversely with the level of prices.
With reference to the above statement, justify six positive economic effects of a prolonged fall in the value of money in an economy. (6 marks)
QUESTION 36
November 2019 Question Six A B and C
Identify four reasons against international trade restrictions. (8 marks)
QUESTION 37
November 2019 Question Six B
Summarise four functions of World Trade Organisation (WTO). (4 marks)
QUESTION 38
November 2019 Question Six C
The citizens of your country have raised concern over the increased rate of Foreign Direct Investment in your country.
Required:
Assess four cases in favour of and four cases against Foreign Direct Investment in an economy. (8 marks)
QUESTION 39
November 2019 Question Seven C
Distinguish between “depreciation of a currency” and “demonetisation of the currency”.
(4 marks)
QUESTION 40
November 2019 Question Seven C
Highlight six possible effects of demonetisation of the currency, (6 marks)
QUESTION 41
May 2019 Question Five C
Outline six limitations of the theory of comparative advantage as used in international trade. (6 marks)
QUESTION 42
May 2019 Question Six A
Examine three roles of foreign exchange reserves in an economy. (3 marks)
QUESTION 43
May 2019 Question Six B
Describe six factors that determine the terms of trade in a country. (6 marks)
QUESTION 44
November 2018 Question Five B
Outline five limitations of adopting export promotion strategy in developing countries.
(5 marks)
QUESTION 45
November 2018 Question Six C
Discuss seven disadvantages of adopting an import substitution strategy to control unfavourable balance of payments in a developing country. (7 marks)
QUESTION 46
May 2018 Question Two B
Explain six reasons why a country might impose international trade restrictions.
(6 marks)
QUESTION 47
May 2018 Question Two C
Analyse three roles of International Monetary Fund (IMF) to member countries.
(6 marks)