eet 101 - Kenyatta University Eet 101 Macroeconomic Theory...

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Kenyatta University Eet 101: Macroeconomic Theory 1 Question Paper Exam Name: Eet 101: Macroeconomic Theory 1 Course: Institution/Board: Kenyatta University Exam Year: INSTRUCTIONS ANSWER QUESTION ONE AND ANY OTHER TWO QUESTION ONE a) In the recent past, Kenya has faced a sharp depreciation of its shillings to major foreign currencies resulting in a balance of payment disequilibrium. Discuss any FIVE measures that would be applied to help correct the disequilibrium (10 marks) b) Briefly explain FIVE types of unemployment an economy can face (10 marks) c) Explain the meaning of the following terms as used in Economics. i. Ratchet effect ii. Liquidity trap iii. Crowding out iv. Money illusion v. Phillips curve (5 marks) d) Explain the goals of macroeconomics as explained in the Economic theory (5 marks) e) Suppose that consumption, C=10+0.85Y and Equilibrium level of investment, = KSHS.540. compute the Equilibrium Income and Consumption (5 marks) QUESTION TWO
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