❖ Population policy to control growth/ have a labour force that the economy can absorb
❖ To improve infrastructure in order to have suitable economic activities /accept e gs of infrastructure as a rating.
❖ Increase government expenditure to expand the size of the economy/ to finance development projects.
❖ Effective use of natural resources to increase production activities
❖ Income /wage policy to harmonize differences between regions/ sectors
❖ Attract (Local /foreign) investments through vision incentives/ to grow the economy
❖ Reviving collapsed industries/ projects by injector, funds/ selling them / increased production activities
No.15.The following balances were extracted from the books of Highlife General Stores on 31st December 2015.
Required: Prepare the balance sheet of Highlite General Stores as at 31st December 2015. (4 marks)
No.16..Outline four circumstances in which the government may be involved in business. (4 marks)
❖ When a business venture requires investment of large sums of money which individual entrepreneurs may not provide.
❖ When the goods or services to be provided are essential to the welfare of the citizens.
❖ When there is need to protect citizens from exploitation by private entrepreneurs.
❖ When the government desires to create employment for the citizens.
❖ When the government needs to generate income through revenue collection.
❖ When there is need to safeguard national security.
❖ When the venture is strategic but provides low profits hence unattractive to private investors.
❖ Where there are monopolies in the economy, the government gets involved in business to increase competition.
❖ Where there is need to balance regional development.
❖ To reduce foreign dominance in the economy.
❖ Where there is need to attract foreign investment.
No.17..Identify the ledgers in which the following accounts are kept.(4mks)
PP1 No.18.The following diagram represents the circular flow of income in a two sector closed economy
Identify two factors represented by each of the arrows labelled a and b. (4 marks)
(a) (i) Payment for goods and services.
(ii) Factor services / inputs / factors of production.
b) (i) Payment for factor inputs,
(ii) Goods and services.
No.19.State four reasons for privatising public corporations. (4 marks)
❖ To improve efficiency in their operations.
❖ To generate revenue to the government through sale of shares and taxes.
❖ To enhance competition.
❖ To increase public participation in economic activities of the country.
❖ To reduce government expenditure.
❖ To comply with conditions set by development partners and international donor agencies.
❖ To enable the government to concentrate on other state responsibilities.
❖ To minimize political interference.
No.20..State four reasons for the increased use of cell phones in banking. (4 marks)
❖ Easy to transact / easy ownership
❖ It saves on time since there is no traveling and queuing for the services.
❖ The speed of transaction is fast / quick feedback.
❖ It reduces paper- work by eliminating the need for physical files and other documentations.
❖ The use of PIN enhances security
❖ Increased ownership of mobile phones
❖ Transactions can be conducted any time
❖ Reduce transaction costs (travel and bank charges)
❖ Easy access to transaction records
❖ It is a requirement by service providers (utility bills)
❖ Easy to obtain credit facilities e.g. M-Shwari loan
No.21.List four sources of public finance. (4 marks)
❖ Taxes
❖ Licenses
❖ Court fines
❖ Donor aid
❖ Fees
❖ Treasury bonds and bills
No.22.State two situations in which each of the following types of inflation may occur.
(i) Creeping inflation (2 marks)
❖ When the general price levels rise gradually/ single digit over a period of time usually at single digit. Where the value of money tends to be stable over time the effects on the economy is not severe.
(ii) Hyperinflation (2 marks)
❖ Where the general price rise at high rate/ usually more than two digits.
Where there is drastic loss in the value of money effect on the economy is very severe
No.23..Outline four factors that may make a producer to by-pass the wholesaler when distributing goods. (4 marks)
❖ Having own retail outlet.
❖ Dealing in perishable goods like bread which require shorter channels.
❖ Dealing in technical goods which require elaborate after sales services.
❖ Consumers and retailers buying in large quantities.
❖ Need to keep price of goods low.
❖ Limited geographical spread of the market.
❖ Government policy.
❖ When the production is in small quantity.
❖ Where the producer has enough storage facilities.
❖ When goods are produced on order
No.24.Outline four goals of development to a country. (4 marks)
❖ Alleviation of poverty
❖ Attainment of high and sustainable economic growth
❖ Provision of adequate social amenities e.g. health
❖ Diversification of the economy to reduce over-reliance on a few products
❖ Alleviation of unemployment
❖ Attainment of more equitable distribution of incomes
❖ Enhancement / upholding of human freedom, rights and self esteem / democracy
❖ Provision of security
❖ Maintenance of political sustainability / good governance.
❖ Attainment of food security for population
❖ Alleviation of illiteracy
❖ Elimination of harmful cultural practices
❖ Improvement of infrastructure e.g. transport, communication, water
No.25..Outline four characteristics of services. (4 mark)
❖ Difficult standardize/ heterogeneous give to varying quality (over time)/ the quality cannot be uniform (from time to time) may be offered by sufficient people.
❖ Service cannot be stored for future/ service is only consumed at the time it is being offered/ service capacity cannot be stored.
❖ Service cannot be touched/ it is intangible/ invisible can only be felt/ experienced
❖ Services cannot be separated from service properties the provider must directly offer the service to the user
❖ Service is perishable service can only be enjoyed at the time the provider is available/ it expires after it is provided.
❖ Services cannot be owned by the buyer/ ownership cannot be transferred as the buyer only pays for the experience
❖ Services/ have utility to satisfy wants.
❖ Services are mobile since they can be received/ provided at different places/ locations
