Using appropriate diagrams discuss any two motives of holding money

QUESTION ONE COMPULSORY
a)Define the following terms:
a) The multiplier (3 marks)
b) Inflation (3 marks)
c) GNP (3 marks)
d) Labor force (3 marks)
e) GDP (3 marks)
b) Distinguish using appropriate diagrams the LM and the IS curves (5 marks)
c) Discuss the effectiveness of fiscal and monetary policies in Kenya (5 marks)
d) Compare and contrast the classical and Keynes theories of employment (5 marks)
QUESTION TWO
a) Using appropriate diagrams, demonstrate how equilibrium is achieved in the product and the money market respectively (12 marks)
b) In reference to Kenya, examine any five (5) problems that one may encounter in the measurement of National Income (8 marks)
QUESTION THREE
a) Using appropriate diagrams discuss any two motives of holding money (8 marks)
b) State and discuss the methods of measuring national income (12 marks)
QUESTION FOUR
Developing countries have experienced persistent and rising inflation and unemployment problems
a) Define each problem, explain any three of the major causes (12 marks)
b) Suggest any four economic policies that may be used to reduce the magnitude of their major problem (8 marks)

 

 

 

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