SECTION A : (20marks)
Answer ALL parts in this question
ii) Mention two factors that influence price elasticity of demand. (02mks)
b) (i) Distinguish between labour mobility and efficiency of labour.(02mks)
ii) State any two factors which influence the efficiency of labour in an economy.(02mks)
c) (i) What is meant by a development goal.(01mk)
ii) Mention any three development goals in an economy.(03mks)
d) (i) Distinguish between trade creation and trade diversion.(02mks)
ii) State any two effects of trade diversion. (02mks)
e) (i) State Irving fishers’ equation of exchange.(01mk)
ii) How is the value of money determined in fishers’ equation of exchange?
SECTION B (80marks)
Answer any four questions from this section
b) Discuss the implications of relying on price mechanism in the allocation of resources in an economy.(10mks)
b) Explain the merits and demerits of monopolistic competition.(16mks)
b) Explain the factors that influence the level of National Income in an economy.(16mks)
b) “Developing countries should adopt capital saving techniques of production if they are to achieve faster rates of economic growth”.
b) To what extent is this theory relevant in developing countries?
b) When are employees justified to demand for wages increase?(16mks)