Category: Economics
Contributions of multinational corporations to economic development in Uganda
Filling the savings/investment gap. Filling the manpower gap Filling the technological gap/promoting technological transfer Filling the foreign exchange gap Increase government revenue through taxation. Create ... Read More
Multi-national/multinational corporation
Multi-national corporation is an enterprise/firm with/which has headquarter in one country but with branches/subsidiaries in many countries. Read More
Factors that influence production costs in Uganda.
The quantity of output produced/ the scale of production. The wage rate and the number of workers employed. The cost of raw material input/ the ... Read More
Features of good economic development plan.
A good plan should be compatible. It should have a good sequence/should be sequenced. It should have clear objectives to all people involved in plan ... Read More
Disadvantages/demerits of indirect taxes
They are regressive in nature i.e. the rich and the poor pay the same price for commodities / widen income inequality. They tend to be ... Read More
Why do developing countries rely more on indirect taxes as a source of revenue?
They are relatively easy and cheap to collect / economical. They are difficult to evade because people do not have alternative but to pay them ... Read More
Factors that influence the effective operation of monetary policy in developing countries.
Nature of distribution of commercial banks. Level of accountability in the banking sector. Level of coordination of goverm11ent objectives. Level of liquidity preference among the ... Read More
Profit determination in monopolistic competition
Short run equilibrium position of a firm under monopolistic competition The monopolistically competitive firm earns super normal profits (abnormal profits) in the short run. Equilibrium ... Read More
Characteristics of a monopolistic competitive market
Existence of many firms. There are many sellers and buyers involved in the exchange of closely related products. There is use of persuasive advertisement. ... Read More
The marginal productivity theory of wages
The marginal productivity theory of wages states that labour should be paid a wage that is equal to the value of its marginal revenue product. ... Read More
Advantages of informal sector in an economy.
Widens tax base i increases government revenue. Promote development of entrepreneurial skill /abilities. Facilitates the process of industrialization/increased output/ GDP / Economic growth. Promotes resource ... Read More
Investment expenditure
Investment expenditure is amount of money devoted to creation of/increasing the existing capital stock Read More
Challenges in implementing development plans in developing countries
e Inadequate funds / limited capital Inadequate/ limited necessary data information Limited good will by the people , conservatism Natural calamities Presence of non-responsive private ... Read More
Principle of economic development planning.
Principle of comprehensiveness- should cover the whole economy/all sectors of the economy. Consistency- should be in line with targets and objective of development Sequencing - ... Read More
progressive tax meaning
A progressive tax involves a tax rate that increases (or progresses) as taxable income increases. Read More
Conditions necessary for the success of the balanced growth theory in an economy
Availability of enough capital / sufficient / Adequate capital. Availability of skilled labour /man power. Presence of entrepreneurial abilities/ skills Favourable political climate Favourable government ... Read More
Factors limiting agricultural modernization in Uganda.
Under development infrastructures. Unfavorable/ unpredictable natural factors/ natural hazards. Limited labour skills. Small market (size) Unfavourable climate political climate Limited funds. Poor techniques of production. ... Read More
Need to modernize the agricultural sector in Uganda
To increase output / hence economic growth. To increase employment opportunities/to minimize seasonal unemployment. To reduce income inequality To increase economic activities in the country ... Read More
Causes of tax evasion in Uganda
The desire (by the tax payer) to retain or keep all income. Ignorance of the tax payers of the advantage of paying taxes. High level ... Read More
Effects of young population on Uganda’s economy.
High dependency burden / low savings. Low effective demand. High government expenditure on provision of social services. Low labour supply /small size of labour force. ... Read More
Factors limiting effective demand for goods and services in Uganda
High prices of goods and services / high price Low consumer(s) Unfavourable tastes and preferences / low quality of Expectation of lower prices I fall ... Read More
Determinants of economic rent
The elasticity of supply of the factor. The supply price of the factor. The elasticity of demand for the factor. The (degree of) substitutability ... Read More
Role of National Budget in an economy
Creation of employment opportunities Attains price stability/ controls inflation. Protection of infant industries. Reducing income inequality / ensures equitable distribution of income. Discourages production and ... Read More
Measures to reduce open-urban unemployment in an economy.
Advertise / publish the available jobs. Widen markets. Population control to reduce high population growth rate, Education reform/ proper man power planning. Under take land ... Read More
Causes of open-urban unemployment in an economy.
Rural to urban migration. High population growth ratio. Poor education system which prepares people for white collar jobs. Technological advisement. Limited skills among job seekers. ... Read More
Implications of over population in an economy.
Benefits of over population It increases the size of the domestic market for both the manufactured and agricultural products. Encourages investment It stimulates rapid economic growth. ... Read More
Optimum population
Optimum population refers to the size of the population which provides the labour force that yields the highest possible output per capita given the available ... Read More
Over population
This refers to the population size where there are more people than resources can sustain resulting in fall in average output as the population grows. ... Read More
The problems faced by the industrial sector in less developed countries.
Limited capital stock/ funds. Poor infrastructure. Limited entrepreneurial skills. Limited skilled manpower. Limited domestic and foreign markets , high MPM / competitor imports. Under developed ... Read More
Factors that determine the level of national income in an economy.
The level of investment both domestically and externally. The higher the level of investment, the higher the level of national income but a low level ... Read More
Why may government impose price control in an economy?
To protect consumers from exploitation. To protect producers from exploitation. To maintain price stability/ control inflation. To increase production/ output/ economic growth To make commodities ... Read More
Benefits/advantages/merits of adopting the Big-push theory in developing countries
Increased employment opportunities. Promotes economic diversification. Development of infrastructure Increased government revenue. Improved balance of payments position. Increased exploitation and utilization of resources. Promotes linkages/ ... Read More
The Big-push theory (development strategy)
The Big-push theory states that, for a backward economy (Le. LCD) to take off into a self-sustained growth a massive investment program in industries and ... Read More
Challenges faced by a developing country when providing public goods.
Inadequate funds/capital Corruption and embezzlement of funds by public officials. Poor infrastructure. Political Limited political commitment. Political interference in Inadequate skills. High rates of inflation ... Read More
Negative effects/disadvantages/demerits of public borrowing
It encourages dependency / laziness. Undermines capital formation due to debt repayment It is inflationary i.e. a case with external borrowing Worsens the Balance of ... Read More
Means/measures to improve economic planning in Uganda
Raise sufficient funds Ensure proper data collection Promote autonomy of the planning authority / discourage political interference in planning Ensure government commitment in planning· Ensure ... Read More
Tools/instruments of fiscal policy
Tax at ion Government expenditure Subsidization Fees fines Licensing Public borrowing Debt repayment Read More
Factors that limit the principle of cooperative advantage.
Assumes two countries while there are many countries /dealings with many trading partners/ multilateral trade Assumes two commodities but there are many commodities in Uganda/diversification ... Read More
Causes of low labour productivity
Low wages /poor remuneration of workers Use of poor technology/underdeveloped technology Low levels of skills Poor supervision of workers/management/entrepreneurship Poor health conditions or the workers ... Read More
Indicators of economic development
Increased supply of skilled labour reduced illiteracy Increased incomes. increased investment / entrepreneurship/capita accumulation Reducing political instability I improved political atmosphere Increased economic growth rates/output ... Read More
Causes of youth unemployment in developing countries
Technological progress and increased use of capital intensive methods Changes in seasons especially in agriculture/changes in climatic conditions Unfavourable changes in tastes/limited Markets/fall in demand/falling ... Read More
Statistical challenges faced during the computation of national income
Inadequate statistical data/information Problem of double counting Difficulty of calculating the value of capital depreciation Difficulty of valuing subsistence /Non - marketed output Difficulty of ... Read More
Three methods/approaches to the computation of national income.
Output /product /value added approach It involves summing up the contributions (value added) of all firms or sectors at each stage of production of ... Read More
Distinguish between elasticity of demand and price elasticity of demand.
Elastic of demand is the measure of the degree of responsiveness of quantity demanded of a commodity to changes in the factors that affect demand. ... Read More
Factors that may limit the adoption of the Big-push strategy in developing countries.
Limited capital Limited skills /Education and training Small markets Poor technology Limited basic infrastructure Poor investment climate - high taxes. limited subsidization Poor land tenure ... Read More
Benefits/merits/advantages of oligopolistic markets to a consumer.
Low prices Eases customers budgeting due to stable prices Widens customers choices due to production of wide variety of good Production of high quality goods ... Read More
The Big push development theory/strategy
The Big push theory sates that for a backward economy (i.e. LDC) to take off into self-sustained growth, a massive investment program in industries and ... Read More
Benefits of economic development planning
bb Ensures proper resource allocation/utilization. Ensures equitable distribution of resource/income/regional balance. Reduces the level of unemployment problem. Corrects BOP problems. Ensures stability in prices. Ensures ... Read More
How are salaries and wages determined in Uganda
b Through market forces of demand and supply of labour. Through collective bargaining. By employers setting the salaries/wages. Through individual bargaining. Using the piece ... Read More
Limitations of capital intensive technology
Limited funds/stock of capital. Limited skilled labour Limited entrepreneurship skills Low level of innovations and inventions/research. Cultural rigidities/conservatism. Poor topography. Small/limited market for technology and ... Read More
Forms/types of economic dependence in LDCs
Sectoral dependence. Trade dependence. External resource dependence. Direct economic dependence. Read More
Disadvantages/demerits of imposing taxes
Discourages saving; Encourages malpractices for example smuggling corruption, etc. Discourages effort and initiatives. It is inflationary - (the case with indirect taxes). Causes resentment of ... Read More
Trade unions
Trade unions are labour organizations formed to maximize the well-being of their members by negotiating for better wages and improved working conditions through collective bargaining ... Read More
Factors that influence capital accumulation
The level of income The rate of inflation The level of infrastructural development The entrepreneurial ability The existing capital stock / .the availability of capital. ... Read More
Impact of localization of industries in in an economy
Positive impact of localization in my country. Facilitates infrastructural development in the area Creation of more employment opportunities in the area Leads to cooperation of ... Read More
Customs Union
Customs Union is a form of economic integration in which member countries have free trade among themselves and common external barriers / tariffs. Read More
Distinguish between a deficit budget and a surplus budget
A deficit budget is one where government expected /estimated/ anticipated/ projected/ planned expenditure in a greater than the government planned/ anticipated/ expected revenue in ... Read More
Causes of cost push inflation
Rising costs (prices) of fuel/ power/ energy. Depreciation / devaluation of the local currency against foreign currencies. Rising costs (prices) of imported in puts / ... Read More
Implications/Advantages/benefits/Merits and disadvantages/demerits of trade liberalization
Positive implications /Advantages/benefits/Merits of trade liberalization in Uganda are: increased employment opportunities Increased level of output hence increased growth rates Encourages resource utilization. Encourages inventions ... Read More