COURSE CODE: ECO 102
1. Explain four difficulties which economists encounter while estimating the Nation
Income of a country. (8mks)
(b) The table below represents economic transactions for a country in billions of
dollars: -
Total Output Intermediate Purchases
Agriculture 30 10
Manufacturing 70 45
Services 55 25
Required
(i) Calculate the Gross National Product of this economy using the value-
added approach. (4mks)
(ii) If depreciation and indirect taxes equal 8 billion and 7 billion dollars respectively,
find the Net Domestic product both at market prices and at factor cost. (5mks)
(c) Explain four limitations to the application of the multiplier principle. (8mks)
2. (a) What is macro-economic? (2mks)
(b) Explain four distinctions between microeconomics and macro-economics. (8mks)
(c ) Macroeconomics as a subject has limitations. Explain five of them. (10mks)
(d) Explain the importance of macro-economics. (5mks)
3. (a) A Central Bank is commonly referred to as the bank at the apex with monetary
authority. Clearly explain five functions of a Central Bank. (10mks)
(b) Explain three roles of the money market in the economy. (6mks)
(c) Explain five objectives of the monetary policy.
4. (a) Mention three leakages from the circular flow of income. (3mks)
1. Explain four difficulties which economists encounter while estimating the Nation
Income of a country. (8mks)
(b) The table below represents economic transactions for a country in billions of
dollars: -
Total Output Intermediate Purchases
Agriculture 30 10
Manufacturing 70 45
Services 55 25
Required
(i) Calculate the Gross National Product of this economy using the value-
added approach. (4mks)
(ii) If depreciation and indirect taxes equal 8 billion and 7 billion dollars respectively,
find the Net Domestic product both at market prices and at factor cost. (5mks)
(c) Explain four limitations to the application of the multiplier principle. (8mks)
2. (a) What is macro-economic? (2mks)
(b) Explain four distinctions between microeconomics and macro-economics. (8mks)
(c ) Macroeconomics as a subject has limitations. Explain five of them. (10mks)
(d) Explain the importance of macro-economics. (5mks)
3. (a) A Central Bank is commonly referred to as the bank at the apex with monetary
authority. Clearly explain five functions of a Central Bank. (10mks)
(b) Explain three roles of the money market in the economy. (6mks)
(c) Explain five objectives of the monetary policy.
4. (a) Mention three leakages from the circular flow of income. (3mks)
