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