Answer all question correctly and give references please

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Question 2

(a) (i) Define a transformation curve (1 mark)

(ii) Explain the assumptions on which a transformation curve works? (4 marks)

(b) With the aid of an illustration, explain the reasons why the transformation curve may shift outwards. (4 marks)

(c) Katono Boniface is an investor based in Kazo. His friends in Canada gave him a grant which he used to establish an industry that manufactures shoes, bags and belts and another one which processes fruits to make juice. He employs people from the community. He buys hides, skins, mangoes and other fruits from the local people. His products are of good quality and affordable. The competition in the market for his products keeps him creative, innovative and hardworking. He pays value added tax, corporate tax and local administration tax. He is a good environmentalist so he safely disposes the wastes from the factories so that he doesn't affect the communities' welfare.

Required:

Describe the benefits of Katono's enterprise to Uganda as a mixed economy. (5 marks)

(d) Explain the reasons why government finds it necessary to intervene in the economic activities of Uganda. (6 marks) (Total 20 marks)

Question 3

By 2001, Uganda Electricity Board (UEB), which for a long time was an ailing monopoly ceased its operations. Faced with multiple problems like low levels of household access to electricity, shortage of supply, fluctuations in water levels at the power generation points as well as the high unit price for electricity, it was paramount for the government to privatise UEB, even when it was a hard decision to take. In April 2001, UEB was dismantled creating Uganda Electricity Distribution Company Limited (UEGCL, Uganda Electricity Transmission Company Limited (UETCL), and Uganda Electricity Generation Company. In January 2003, Eskom Enterprises took over UEGCL's holdings and in 2005; Eskom enterprise deepened its presence in Uganda under the company name UMEME under a 20- year concession from the government. UMEME is now a monopoly in Uganda's Hydro-electricity sub sector with the mandate of generating, transmitting and distributing hydroelectricity power in Uganda. The Uganda Electricity Regulatory Authority (ERA) is supposed to oversee its activities. Other firms that could enter the Electricity generation, transmission and distribution have not been able to infiltrate the sector because of the binding agreement that UMEME has with the government, in addition to other barriers such as high initial costs and the narrow market for electricity.

Required:

(a) Explain the barriers to entry of new firms into the Hydro Electricity Power sub sector in Uganda. (6 marks)

(b) By the late 1980's, Uganda had 156 public enterprises many operating at loss and with low productivity so privatisation was viewed as an important component of structural adjustment program that was being pushed for by the World Bank. As of late 2006, 122 government enterprises had been privatized. However, opponents of privatisation have had a wide range of arguments against the privatisation policy over time.

Required:

(i) Discuss the arguments leveled against privatisation of public enterprises in Uganda. (7 marks)

(c) Explain the different ways in which a firm can raise funds to finance its operations. (7 marks)

Question 4

(a) Differentiate between a fixed exchange rate and a floating exchange rate. (2 marks)

(b) Explain the ways that can be used to improve on Uganda's terms of trade. (6 marks)

(c) (i) Describe any four liquid assets held by a commercial bank. (4 marks)

(ii) Examine the factors that influence the amount of money created by commercial banks in an economy. (8 marks)

Question 5

Uganda's agricultural sector according to the budget speech of 2020/2021 is the source of employment to 64% of the population. It employs 72% of all youths both directly and indirectly and it contributes 45% of exports. However, the government allocation of funds to this vital sector is less than the desired level. In the 2020/2021 budget, the allocation to agriculture was about 5.4% of expected total government expenditure. Consequently, the sector does not perform to the expectations. The country still imports food items and even inputs for agro-based industries. Exports of agricultural products are still limited in scope and volume and household incomes have not significantly increased as is expected. Economic experts have attributed the poor performance of the agricultural sector over the years to a number of factors such as limited skills, low funding, low accountability, poor land tenure system among others.

Required:

(a) (i) Discuss the causes of the poor performance of the agricultural sector in Uganda. (6 marks)

(ii) Explain the steps that can be taken to improve the export of the agricultural products of Uganda. (5 marks)

(b) (i) Describe the components of Uganda's national budget. (5 marks)

(ii) Examine the importance of the national budget to the development of an economy. (4 marks)

Question 6

Many trade unions in Uganda such as Uganda National Teachers' Union, Uganda Medical Workers' Union, Makerere University Academic Staff Association have constantly petitioned government to raise wages and salaries. Many times, these trade unions have had their members lay down their tools to show their dissatisfaction. The common concerns raised by trade unions in agitation for better pay ranges from rising cost of living, increased risks (as it was the case during the covid 19 surge in relation to the medical practitioners), increased work load, among others. Despite the numerous promises by the government to improve the working conditions after negotiating with the trade union leaders, these promises have either been met at a slow rate or failed to be met at all. Therefore, after some time, the demands are renewed and it almost becomes a cycle as new union leaders come into power.

Required:

(a) (i) Explain the reasons behind trade unions' demands for remuneration increases for their members. (6 marks)

(ii) Explain why trade unions in Uganda have not been successful in securing better working conditions and increases in payments for their workers? (6 marks)

(b) From March 2020 to date, the country has had the problem of Covid 19. Many people like teachers became unemployed, others experienced shortage of food, they were evicted by landlords and the standard of living of the majority fell. It is now clear that people learnt economic lessons from this period including the need for saving and the ability to do a wide variety of jobs.

Required

Explain the reasons behind the need by individuals and firms to save. (5 marks)

(c) Discuss the demerits of being a sole proprietor in any business venture. (3 marks) (Total 20 marks)