PRINCIPLES OF ECONOMICS DECEMBER 2023 PAST PAPER

MONDAY: 4 December 2023. Morning Paper. Time Allowed: 3 hours.

This paper has seven (7) questions. Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper.

QUESTION ONE

1. List SIX factors that determine the efficiency of labour as a factor of production. (6 marks)

2. Distinguish between “deductive” and “inductive” method of economic analysis. (4 marks)

3. Explain FIVE objectives of demonetisation of a currency. (10 marks)

(Total: 20 marks)

 

QUESTION TWO

1. State FIVE exceptions to the law of demand. (4 marks)

2. Distinguish between “macroeconomic theory” and microeconomic theory”. (4 marks)

3. Identify SIX merits of a planned economic system. (6 marks)

4. Explain SIX reasons for government involvement in business activities. (6 marks)

(Total: 20 marks)

 

QUESTION THREE

1. Explain FIVE effects of appreciation of a currency in an economy. (10 marks)

2. Explain the term “own price elasticity of demand”. (2 marks)

3. The following information relates to a consumer in a certain market:

Required:

Determine the income elasticity of demand. (4 marks)

Outline FOUR applications of the concept of elasticity of supply. (4 marks)

(Total: 20 marks)

 

QUESTION FOUR

1. Outline FIVE demerits of barter system of exchange. (5 marks)

2. Highlight FIVE disadvantages of a monetary economy. (5 marks)

3. With the help of a diagram, explain changes in supply. (6 marks)

4. Enumerate FOUR characteristics of income consumption curve. (4 marks)

(Total: 20 marks)

 

QUESTION FIVE

1. List FIVE factors that might lead to leftward shift in the optimal point of a firm. (5 marks)

2. Analyse THREE limitations of the marginal productivity theory of interest rate determination. (6 marks)

3. Outline FOUR disadvantages of mobility of labour in an economy. (4 marks)

4. Summarise FIVE benefits of monopoly to an economy. (5 marks)

(Total: 20 marks)

 

QUESTION SIX

1. Explain the term “debt-to GDP ratio”. (2 marks)

2. Describe FIVE forms of foreign aid to developing countries. (5 marks)

3. Explain the term “galloping inflation”. (2 marks)

Enumerate FIVE merits of creeping inflation. (5 marks)

4. Discuss SIX causes of unemployment in developing countries. (6 marks)

(Total: 20 marks)

 

QUESTION SEVEN

1. Outline FOUR components of the balance of payment accounts. (4 marks)

2. Highlight FIVE reasons why the liquidity-money (LM) curve is positively sloped. (5 marks)

3. Explain FIVE methods that may be used to promote exports in developing countries. (5 marks)

4. Using a diagram, describe the circular flow of income of a closed economy with government intervention. (6 marks)

(Total: 20 marks)

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