Paper 1

SECTION A

1. (a) (i) What is meant by the term elasticity of demand?
(ii)Mention any three factors which determine the elasticity of demand for a commodity

(b) (i)Distinguish between lateral integration and conglomerate integration of firms
(ii)Give any two conditions necessary for the success of lateral integration of firms

(c) (i)Differentiate between average propensity to consume (APC) and marginal propensity to consume (MPC)
(ii) Given that a country’s total income is shs 60,000 billion and its total consumption is sh 48,000 billion, calculate its APC

(d) (i)Distinguish between import substitution and export promotion strategies of industrial development
(ii)Mention any two merits of import substitution strategy of industrial development

(e) (i)Distinguish between piece rate and time rate methods of wage payment
(ii)State any two merits of piece rate method of wage payment

(f) Mention any four causes of under employment in an economy

(g) (i) Differentiate between cash ratio and reserve ratio
(ii)Give any two reasons why the reserve ratio may be increased

(h) (i)What is meant by dumping?
(ii)Give any two effects of hyper inflation in an economy

(i) (i)Distinguish between suppressed inflation and hyper inflation
(ii)Give any two effects of hyper inflation in an economy

(j) (i)Differentiate between taxable income and taxable capacity
(ii)Mention any two principles of taxation

SECTION B

2. (a) Distinguish between maximum and minimum price legislation
(b)Why may the use of price controls be avoided in an economy?

3. (a)Describe the features of monopolistic competition
(b)Describe the features of monopolistic competition

4. (a)What is meant by the term ‘’economic development strategy’’?
(b)Explain the merits of diversification in production as an economic development strategy

5. (a)Explain the factors that determine the level of wages in an economy
((b)What are the limitations of the marginal productivity theory of wage determination?

6. (a)Explain the functions of a central bank
(b)How does a central bank control credit creation in a multi-banks system?

7. (a)Distinguish between partial planning and decentralized planning
(b)Why is development planning necessary in an economy?

8. (a)What is public corporation?
(b)Assess the role of public corporations in an economy


 PAPER 2

SECTION A
1. (a) (i)What is meant by the term ‘’labour mobility’’?
(ii)Suggest any three ways of increasing geographical mobility of labour in your country

(b) (i) What is meant by Marginal propensity of save (MPS)
(ii)Given that initial nation income of a country is sh 22 billion and the MPS is 40%, calculate the final income in that country

(c) (i)Define the term ‘’subsistence production’’
(ii)Give any three demerits of a large subsistence sector in your country

(d) (i)What is meant by the term ‘’tied aid’’?
(ii)Give any three problems of relying on foreign aid in your country

(e) (i)Define the term ‘’under population’’
(ii)Mention any three disadvantages of under population in your country

(f) (i)What is meant by monetary policy?
(ii) Give any three tools of monetary policy in your country

(g) (i)Differentiate between balance of trade and terms of trade
(ii)Suggest any two ways of improving terms of trade in your country

(h) (i)What is structural inflation?
(ii)Give any three causes of structural inflation

(i) (i)Define the term ‘’economic integration’’
(ii)State any three merits of economic integration

(j) (i)What is meant by public debt management?

(ii)Give any three objectives of public debt management in your country.


SECTION B

2. (a)Differentiate between internal economics and external economics of scale
(b)Account for the continued existence of small scale firms in your country

3. (a)Distinguish between balanced growth and unbalanced growth strategies
(b)Account for the low- level of economic development in your country

4. (a)What is meant by the term ‘’agricultural modernization’’?
(b) Explain the factors limiting agricultural modernization in your country

5. (a)Differentiate between voluntary unemployment and involuntary unemployment
(b)Suggest possible measures of reducing the unemployment problem in your country

6. (a)How do commercial banks create credit? (illustrate your answer)
(b)Explain the factors which limit credit creation by commercial banks in your country

7. (a)What is meant by ‘’vent for surplus theory’’ as used in international trade?
(b)Asses the role of international trade in the development of your country

8. (a)Distinguish between tax evasion and tax avoidance
(b)Assess the impact of indirect taxes on the economy of your country

PAPER 1

1. (a) (i)What is meant by a laissez-fair economy?
(ii)State any two demerits of a laissez-fair economy

(b)(i)Differentiate between an operating cost and an overhead cost.
(ii)State any two overhead costs in an economy

(c)(i)What is meant by aggregate demand?
(ii)Mention any three components of aggregate demand in an open economy

(d)State any four features of economic development in your country

(e)(i)Distinguish between optimum population and over population
(ii)State any two demerits of over population

(f)What is meant by the term ‘foreign exchange rate control?’
(ii)Mention any three objectives of foreign exchange rate control

(g)(i)State the law of comparative cost advantage
(ii)Give any three assumptions of the law of comparative cost advantage

(h)(i)Define the term ‘’currency depreciation’’
(ii)Mention any three effects of currency depreciation in an economy

(i)(i)What is meant by a funded debt?
(ii)Mention any three reasons for raising money through public

(j)State any four ways which public enterprises are privatized.

SECTION B

2. Explain the role of price mechanism in the allocation of resources in an economy
(b)Discuss the implications of relying on price mechanism in the allocation of resources in an economy

3. (a)Differentiate between disposable income and per capital income
(b)What are the limitations of using per capital income to compare standards of living between countries?

4. (a)Differentiate between bi-lateral and multi-lateral aid
(b)Asses the impact of foreign aid on the developmental of an economy

5. (a)Explain the role of agriculture in the development of an economy
(b)What measures can be taken to improve the agricultural sector in an economy?

6. (a)What are the causes of unemployment in an economy?
(b)Explain the effects of unemployment in an economy

7. (a)Explain the benefits of regional economic integration
(b)What factors have undermined the achievement of regional economic integration in developing countries?

8. (a)What is meant by the term ‘’fiscal policy’’?
(b)Explain the objectives of fiscal policy in an economy


PAPER 2

1. (a) (i)Define the term ‘’composite demand’’
(ii)Give any three examples of composite demand in your country

b(i)Distinguish between horizontal and vertical merging of firms
(ii)State any two reasons for the merging of firms in your country

c. Mention any four factors of the informal sector in your country

(d)(i)Differentiate between economic dependence and economic interdependence
(ii)Give any two forms of economic dependence in your country

(e)(i)Define the term trade union
(ii)Mention any three methods used by trade unions to settle industrial disputes in your country

(f)(i)Distinguish between oligopoly and duopoly
(ii)State any two advantages of oligopoly markets in your country

g(i)What is meant by the term ‘’credit multiplier’’

(ii)Given that the initial deposit in a bank is Uganda shillings 10,000,000 and the cash ratio is 20%. Calculate the total amount of credit that will be created in a multi-bank system.

h(i)What is meant by a ‘’tariff’’?
(ii)Mention any three non-tariff barriers in your country

(i)(ii)Differentiate between capital gains tax and corporation tax
(ii)State any two demerits of cooperation tax in your country

j. State any four forms of structural adjustment programs (SAP) that have been implemented in your country

SECTION B

2. (a)Differentiate between Gross domestic product and Net National product.
(b)Explain the factors that influence the level of national income in your country

3. (a)Describe the features of the industrial sector in your country
(b)Explain the measures being taken to improve the industrial sector in your country

4. Why is it necessary to compute consumer price indices in your country?
(b)Discuss difficulties encountered when computing consumer price rises in your country

5. Explain the causes of inflation in your country
(b)Suggest measures that should be taken to reduce inflation in your country

6. What are the features of a good economic development plan?
(b)Explain the challenges faced during the implementation of economic development plans in your country

7. Explain the role of the national budget in your country
(b)Account for the persisted budget deficits in your country

8. Distinguish between privatization and nationalization of public enterprises
(b)Account for the privatization of public enterprises in your country

PAPER 1

1. (a) (i) Define the term effective demand
(ii) Give any three factors that limit effective demand in an economy

(b) (i) Distinguish between producers, surplus and consumers surplus
(ii) Given that the market price of a commodity is Uganda Shs 65,000, calculate the producer’s surplus in the table below

(c) (i) Differentiate between casual and residual unemployment
(ii) State any two effects of unemployed I an economy

(d) (i) What is meant by the term ‘’marginal propensity to import?’’

(e) (i)Distinguish between a reproductive debt and a dead weight debt
(ii)state any two ways in which a public debt can be redeemed.

2. (a)How does a firm in a monopolistic competitive market determine output, price and profits in the long run?
(b) Explain the merits and demerits of monopolistic competition

3. (a)why may a country adopt an export promotion strategy of industrial development?
(b)explain the limitations of the export promotion strategy of industrial development

4. Distinguish between labour supply and labour force
(b)Explain the factors that determine labour supply in economy

5. Given that the volume of money in an economy is $20 billion, total level of transactions is $250 million and the transactions velocity of money is 20; calculate the general price level in the economy.

(b)Explain the limitations of Irying Fisher’s quality theory of money

6. Distinguish between mild inflation and hyper inflation
(b) explain the effects of hyper inflation in an economy

7. Differentiate between taxation financing and debt financing
(b)why may a government rely more on debt financing than taxation financing




PAPER 2

1. (a)Distinguish between economics profits and normal profits
(ii) Mention any two factors that influence the lever of profits in your country

(b)What is meant by a development goal?
(ii)Mention any three development goals in your country

(c)State any four factors which limit the effective operation of trade unions in your country

(d)What is meant by economic development planning?
(ii)Give any three factors that affect the implementation of development plans in your country

(e)Differentiate between taxable capacity and tax base
(ii)State any two reasons for the narrow tax base in your country

SECTION B
2. (a)Describe the features of an oligopolistic market
(b)Examine the merits and demerits of oligopolistic markets

3. Explain the role of the private sector in the development of your country
(b)What measures have been taken to promote the development of the private sector in your country?

4. What is meant by Foreign Aid?
(b)Asses the impact of Foreign Aid on the development of your country

5. (a)Outline the objectives of the monetary policy in your country
(b)Examine the factors that limit the success of the monetary policy in your country

6. What is meant by the term ‘’trade liberalization’’?
(b)Examine the merits and demerits of trade liberalization in your country

Explain the contribution of public enterprises to the development of your country
(b)What are the problems faced by public enterprises in your country?

PAPER 1

1. Given that an increase in the price of commodity X from shs 1500 to shs 1800 resulted into change in quantity demanded for commodity Y from 600 units; calculate the cross electricity brand.

(ii)state the relationship between commodities X and Y

(b) (i)What is meant by a mixed economy?
(ii)Give any three merits of a mixed economy

(c)(i)Distinguish between average product and marginal product
(ii)State any two factors that may lead to an increase in marginal product of labour

(d)(I)state Irying Fisher’s equation of exchange
(ii)How is the value of money determined in fisher’s equation of exchange?

(e)(i)Define the term regressive tax
(ii)State any three effects of regressive taxes in an economy

SECTION B

2. (a)State the Malthusian population theory
(b)Explain five ways in which the Malthusian population theory is relevant to developing countries

(c)state six limitations of the theory

3. (a)Why do prices of agricultural products fluctuate
(b)What are the effects of agricultural price fluctuations in an economy?

4. Explain the differences and similarities between pure monopoly and monopolistic competitive markets
(b)How does the existence of monopolistic competitive markets affect producers in your country?

5. (a)What are the features of an economic union?
(b)Explain the factors that limit regional economic integration among the development countries

6. What is meant by centralized planning?
(b)Explain the rationale for centralized planning in an economy

7. Define the term ‘’nationalisation of enterprises’’
(b)Explain the merits and demerits of nationalization of enterprises in an economy.


PAPER 2

1. (a) (ii)Differentiate between nominal and real Gross Domestic product (GDP)
(ii)Given that a country’s GPD is shs400 billion, net income from abroad is shs 40 billion and depreciation is shs 20 billion; calculate the Net National product (NNP)

(b)Mention any two
(i)factors that have influenced the level
(ii)benefits
of foreign direct investment in your country

(c)State any four features of dualism in your country

(c) (i)Distinguish between cost-push inflation and bottleneck inflation
(ii) Mention any two causes of bottleneck inflation in your country

(c)(i)What is meant by labour –saving techniques of production?
(ii)Mention any two merits of the labour –saving techniques of production in an economy

SECTION B
2. (a) Differentiate between competitive supply and joint supply
(b)Explain the conditions that may lead to a decrease in the supply of commodity in your country

3. (a) Distinguish between economic growth and economic development
(b)Explain the costs of economic growth in your country

(4)(a)Explain the causes of Voluntary unemployment
(b)Suggest measures that should be taken to reduce the level of unemployment in your country

(5)(a)Distinguish between banking financial institutions and non-banking financial institutions
(b)Explain the functions of banking financial institutions in your country

(6)(a) What is meant by the term balance of payment?
(b)Account for the persistent balance of payments deficit in your country

(7)(a)Distinguish between the government recurrent expenditure and development expenditure
(b)Account for the increase in public expenditure in your country

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