Question

(a) Explain

1. (i)five factors that determine the supply of labor in an economy.
2. (5 marks)
3. (ii)the methods that are being used to reduce wage differentials in Uganda.

(b) (i)

Discuss the disadvantages of a Laissez faire economy.

(5 marks)

(5 marks)

(ii) Explain the ethical issues that arise from the responsibility of business to society.

Question 3

(b) (i)

(6 marks)

Discuss the reasons why government influences the location of an

economy.

Question 4

(a) (i)

(4 marks) (Total 20 marks)

(b) Explain the:

objectives of economic development in Uganda. (4 marks) the factors which hinder technological transfer and technological development in developing countries. (6 marks)

Account for the narrow tax base in Uganda. (6 marks)

(a) (i)

(ii) Explain the disadvantages of imposing taxes in an economy.

industry in an economy. (4 marks) (ii) Explain the advantages of a monopolistic market structure in an

Explain the advantages of the price mechanism in a free enterprise economy.

(4 marks)

(ii) Discuss the factors which determine the elasticity of demand for a commodity.

(6 marks)

Question 5

(a) (i)

Using an illustration, show how income inequality is measured using a Lorenz curve.

(5 marks)

(b) (i)

(5 Marks)

Explain the inapplicability of the law of comparative advantage in Uganda.

(6 marks)

(ii) Explain the factors that limit the level of savings in an economy.

(ii) Discuss the conditions under which economic integration operates successfully.

Question 6

(a) Explain the causes of hyperinflation in an economy.

(4 marks)

(b) The table below shows the changes in prices (in Shs) of different items at a shop in Rweibare village. Study it and answer the question that follow.

Item

Price in base year 2015

Price in current year 2017

Base index

weight

Posho

3,000

3,000

100

5

Beans

2,600

2,800

100

4

Soap

3,500

4,000

100

2

Petrol

3,500

3,900

100

1

Sugar

4,500

4,800

100

3

Calculate the average weighted price index for the given data.

(6 marks)

(c) Explain the applicability of the quantity theory of money in the determination of changes in the value of money.

(6 marks)

(d) Discuss the factors that limit the process of credit creation by the financial institutions in Uganda.

(4 marks) (Total 20 marks)