Category: Economics
Arguments for emphasis on agriculture development in LDCs
It is the source of employment for LDCs for unskilled and semiskilled workers. It is the source of food It the source of raw materials ... Read More
State and explain the ways in which agriculture is dominant in Uganda’s economy
Agriculture is the major sources of food for rapidly growing population both in urban and rural areas Agriculture contributes the biggest percentage to Uganda’s GDP. ... Read More
Challenges/problems of measuring national income
(i) Income approach. Here the incomes received by factors of production are added. Such incomes include rent, salaries, wages, interest and profits. Problems faced in ... Read More
What are sources of public revenue?
Direct and indirect taxation are the major sources of government revenue. Fees; these are charged on services rendered by the government e.g. license fee, stamp ... Read More
Explain how national income is estimated/methods used to compute national income and indicate three problems of each method.
(i) Income approach. Here nation income is obtained by adding up all incomes received by factors of production in a given period of time, usually ... Read More
What is national income? state the uses of national income statistics.
National income is the measure of the total monetary value of all goods and services which arise from the economic activities of the country in ... Read More
State and explain four reasons firms of different sizes may exist in the same industry.
When the Long-Run Average Cost curve (LRACC) has a flat bottom over a wide range of output, then firms of different sizes producing at any ... Read More
A shutdown point of firm
A shut down point is a point below which a firm cannot covers its average variable costs (AR = AVC) Or It is a point ... Read More
Distinguish between breakeven point and shutdown point of a firm?
The break-even point is the point at which total cost and total revenue are equal, meaning there is no loss or gain for your small business. ... Read More
Explain why indirect taxes are said to be convenient.
They are difficult to evade They are comprehensive i.e. cover wider areas Their burden are not felt because they are voluntary taxes They are not ... Read More
Distinguish between a tax and fee.
A tax is compulsory payment to the state by individuals and business enterprises. Or it is a payment for non-direct exchange of goods and service. ... Read More
State and explain two arguments in favor of exchange control.
Stabilize the forex market by avoiding constant appreciation and depreciations of currency. It effective in dealing with a problem of capital movements in that the ... Read More
What is meant by economic policy?
Economic policy refers to the strategies and measured adopted by the government to manage the economy as a means of achieving its economic objectives such ... Read More
At what point of the demand curve does the monopolist fix his price?
The monopolist fixes his price at a point where the output line meets the demand curve (AR) or the consumers' willingness to pay which yield ... Read More
What are foreign reserves?
Foreign reserves refer to the money in foreign currency held by the country’s central bank Or Foreign exchange reserves are assets held on reserve by a ... Read More
What is meant by special drawing rights (SDRS)?
Special Drawing Rights (SDRs) The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. The SDR ... Read More
Distinguish between demand deposits and time deposits
Demand deposits are deposits on a demand deposit account (DDA) that can be withdrawn at any time without advance notice. Time deposit is where a ... Read More
Distinguish between dividends and profits.
Dividends refer to the part of the company’s profit that a firm pays periodically to shareholders as a reward from capital invested. Profits refer ... Read More
What is meant by capital consumption allowance?
Capital consumption allowance refers to the amount of money deducted or put aside for the purpose of recovering the depreciation of assets that occur during ... Read More
Given gross national product at market price, what adjustments are required to obtain net national product at factor cost?
GNPFC = GNPMP – Net indirect taxes NNPFC = GNPFC – Depreciation Read More
Define supplementary requirements
Supplementary requirements (special deposits) refer to the deposits above the cash and liquid assets of a commercial bank that are kept in frozen form by ... Read More
Apply the concept of price elasticity of demand to subsidies.
Its applicability depends on the degree of elasticity and can be explained in terms of how the benefits from subsidy are shared between the producer ... Read More
Explain the law of demand; 7 reasons why demand curve slopes down from left to right
The law of diminishing marginal utility. As a person consumes more units of a commodity, the extra satisfaction derived from extra units of the same ... Read More
Short run equilibrium of a monopoly/monopolistic competition
Short-run refers to that period in which a monopolist cannot change the fixed factors. However, the monopolist is free in determining price due to lack ... Read More
Short run equilibrium position of a firm under perfect competition
Equilibrium is attained when MC= MR=AR and MC curve cuts the MR curve from below. Three possibilities: Normal profit (MC = MR = AR =AC= ... Read More
Characteristics of free goods
A free good is a good that is not scarce, and therefore is available without limit. A free good is available in as great a quantity ... Read More
Characteristics of a public good.
Non-excludable means that it is costly or impossible for one user to exclude others from using a good such as road, streetlights. Non-rivalrous means that ... Read More
Characteristics of economic good.
It has money value i.e. marketable It yields utility to an individual or society It is relatively scarce It has opportunity cost Read More
Examine the role of foreign capital in the economic development of your country.
Positive role of foreign capital It increases the flow of capital stock which helpful in breaking the vicious circle of poverty. It supplements domestic savings ... Read More
Reproductive debt
Reproductive debt is money borrowed and used to purchase real assets and equipment intended for capital investment Read More
Dead weight debt
Dead weight debt is money borrowed to finance unproductive activities such financing war or it is a debt which is not covered by any corresponding ... Read More
Why does your country depend more on indirect taxes.
Indirect taxes are cheap to collect Indirect taxes are difficult to evade Indirect taxes tend to form a major source of revenue. Indirect taxes can ... Read More
Examine the policies adopted to curb inflation in your country.
Uganda has adopted the following policies to curb inflation Limited government expenditure. By introducing cost sharing in healthy and education; hence controlling money supply in ... Read More
What steps may be taken to minimize open urban employment.
Rural-urban migration should be controlled through rural development, increasing wages for rural workers There is a need for manpower planning so that matches with labour ... Read More
Examine the causes of open urban unemployment in your country.
Open unemployment is the situation when a person is willing to work, is educated but is unable to get a job and work Large number of ... Read More
What is open unemployment?
Open unemployment is the situation when a person is willing to work, is educated but is unable to get a job and work Read More
Examine the factors affecting the development of industrial sector in your country.
Low level of technology. Most industries in the country employ poor methods of production, mostly labour intensive that limits the capacity of production. Limited market ... Read More
Examine the policies that have been adopted to promote the private sector in your country.
Expansion of credit facilities. Government has expanded and extended loan facilities through banking system and adoption of expansionary monetary policy. Redistribution of income. The government ... Read More
What is the role of the private sector in the development of an economy
Creation of employment Delivers good and services Undertakes investment Encourage capital inflow contributes to tax revenue Encourage diversification Increase the DGP of the economy Improves ... Read More
Account for the failure to establish the prices of consumer products in your country.
Availability of consumer goods. Scarcity of goods leads to high process and vice versa. Trade liberalization. Prices are determined by demand and supply. Production ... Read More
Account for the failure to establish the prices of agricultural products
Long gestation period of agricultural products. Agricultural products take long time to mature such that in case of high prices in short run, supply cannot ... Read More
Determinants of the bank deposit multiplier
Reserve ratio Level of interest/bank rate Investment climate Liquid preference Level of cash ratio Public propensity to deposit Government policy on lending Level of credit ... Read More
What is meant by bank deposit multiplier?
The deposit multiplier is the maximum amount of money that a bank can create for each unit of money it holds in reserves. Or The deposit ... Read More
What factors influence the level of liquidity preference in your country?
The price level Level of speculation The degree of uncertainty investment climate conservativeness Level of transaction in an economy Level of interest rate, low interest ... Read More
Distinguish between cash ratio and liquid ratio
Cash ratio is the proportion or percentage of the commercial bank deposits kept in cash form to meet the day demands of their customers and ... Read More
Reasons for voluntary unemployment in a country
High preference for leisure to work Poor attitude towards work Cultural factors Expectation of a better paying job in future Existence of past saving The ... Read More
Define voluntary unemployment
Voluntary unemployment is a situation where jobs are available but a person chooses not take up a job at the going wage rate. Or Voluntary ... Read More
State the socio-economic relationship between the level of occupational hazards and the wages in your country
The higher the occupational hazards, the higher the wages because people do not like such jobs. Read More
What is meant by time-rate wage?
Time rate is a system of wages payment where labour is paid on the basis of time spent at work place. Or Time rates are ... Read More
Localization of industries
Localization of industries refers to concentration of industries in particular area such as industrial area or region such as capital city Read More
Industrial inertia
Industrial inertia refers to the tendency of an industry or industries to remain located in an area even after the advantage of its location in ... Read More
Major development goals in your country.
Attainment of full employment Achieving a high rate of economic growth Minimizing inflation Reducing income inequality and poverty Gender equity Balance of payment stability Reducing ... Read More
How does the degree of specificity of a factor of production
The specificity and mobility of a factor of production are inversely related, i.e. the higher the degree of specificity of a factor of production, the ... Read More
What is meant by specificity of a factor of production?
Specificity a facto of production refers to the degree to which a factor of production is specialized in performing a given function in production. The ... Read More
Average variabale costs
Average variable cost (AVC) is variable cost incurred while producing one unit of output. It is calculated by dividing variable cost by the quantity produced. ... Read More
Average fixed costs
The average fixed cost (AFC) is the fixed cost per unit and is calculated by dividing the total fixed cost by the output level. AFC = ... Read More
Prime costs; definition and examples
Prime costs are the costs directly incurred to create a product or service such as cost of raw materials, wages directly involved in the production of ... Read More
Overhead costs, definition, examples
Overhead refers to the fixed costs of running a business that are not directly related to producing a good or service. They are the expenses the ... Read More
What is meant by non-price competition?, give examples
Non-price competition is a competitive strategy to attract customers and increasing sales by methods other than adjusting (lowering) prices. (ii) Give three forms of non-price ... Read More
Factors that lead to accumulation of national debt?
What are the Countries incur debts because Inadequate tax revenue. Poor countries incur debts because of inadequate collections of revenues from taxes to finance government ... Read More