P220/1

ECONOMICS
Paper 1
Jul / Aug. 2019
3 hours

INTERNAL MOCK EXAMINATIONS 2019

Uganda Advanced Certificate of Education

ECONOMICS

Paper 1

3 hours

INSTRUCTIONS TO CANDIDATES:

Answer FIVE questions in all.

Section A is compulsory.

Answers to this Section A should be concise and precise.

Answer FOUR questions from Section B.

All questions in Section B carry equal marks.

Credit will be given for use of relevant diagrams.

Turn Over
 SECTION A (20 MARKS)

1. (a) (i) Distinguish between composite demand and competitive demand.

(02 marks)
(ii) State two examples of competitive demand. (02 marks)
(b) (i) Define marginal efficiency of capital. (01mark)
(ii) Give any three causes of how low marginal efficiency of capital in an
economy. (03 marks)
(c) (i) State the big push theory of economic growth. (01
mark)
(ii) Mention any three conditions necessary for the success of the big push
theory in an economy. (03 marks)
(d) (i) What is meant by Gross National Product at market price. (01 mark)
(ii) Given that GDPmp is 240 billion dollars, export earnings (X) is 120
billion dollars, import expenditure (M), is 40 billion dollars, outlays is
20 billion dollars and subsidies is 35 billion dollars;
Calculate NNPfc. (03 marks)
(e) (i) Distinguish between a partial plan and perspective planning. (02
marks)
(ii) Give any two demerits of partial planning in an economy. (02 marks)

SECTION B (80 MARKS)

2. (a) What is meant by the term price mechanism? (02 marks)

(b) Explain the role of price mechanism in the allocation of resources in an
economy. (18 marks)

3. (a) Distinguish between Economic growth and economic development.

(04 marks)
(b) Suggest measures of increasing the rate of economic growth in an economy.
(16 marks)

4. (a) Distiguish between productivity of labour and efficiency of labour. (04

marks)
(b) Explain the factors that determine efficiency of labour in an economy.
(16 marks)

5. (a) Differentiate between preferential trade area (PTA) and free trade area (FTA).
(04 marks)
(b) Explain the factors that limit regional economic integration among developing
countries. (16 marks)

6. (a) Explain the principles of taxation. (10 marks)

(b) Why does government impose indirect taxes in an economy? (10 marks)

END
7. (a) Differentiate between demand pull and bottle neck inflation. (04 marks)
(b) Why may inflation be controlled in an economy? (16 marks)

END