Answer ALL THREE questions.

QUESTION 1 (20 MARKS)

1. There are two categories of government expenditure namely operating expenditures and development expenditures.

Discuss the components of the government development expenditures

(4 marks)

2. Unemployment is a situation where labour force participants are available and willing to work but are unable to find the jobs.

Elaborate the measure to control unemployment that can be implemented by the government.

(6 marks)

2. Economist will focus on achieving macroeconomic goals. There are four major economic goals namely as full employment, price stability, economic growth and equitable distribution of income. However, it is impossible for a government to achieve all four macroeconomic goals simultaneously.

Briefly discuss how a government will not be able to implement two particular goals at the same time.

(6 marks)

3. Investment refers to the spending on purchases and accumulation of capital goods such as buildings, equipment and accumulation of capital goods such as buildings equipment and additions to inventories.

Hence, identify the TWO (2) factors influencing investment.

(4 marks)