October -November 2021 Mid-term Examinations

BBMB 414 · Money and Banking

BBMB 414 · MONEY AND BANKING

MID-TERM EXAMINATIONS

Faculty : Business and Globalization

Date/Day : 26TH October 2021
Duration : 2 hours

INFORMATION FOR CANDIDATE

1. This examination is worth 20% of the overall semester

assessment.
2. The total number of marks available for this examination is 80.
3. This examination paper contains TWO (2) sections in three (3)
printed pages including the cover page.

INSTRUCTIONS TO CANDIDATE
1. Answer ALL questions in Section A and 2 in B.
2. Write all your answers in the answer booklet provided.
3. If you make a mistake please put a single diagonal line through the
section you wish to be ignored by the examiner.
4. Return all examination papers and scripts upon completion of the
examination including any workings.

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Faculty of Business and Globalization
 October -November 2021 Mid-term Examinations
BBMB 414 · Money and Banking

SECTION A (Answer all Questions) (Total 30 marks)

Question 1 (20 marks)

Define each of the following terms:

(a) Commodity money (4)
(b) Near money (4)
(c) Standard for deferred payment (4)
(d) Creeping inflation (4)
(e) Indexing (4)

Question 2 (10 marks)

(a) On the basis of Government reaction, explain in the case

where inflation is open or suppressed (10)

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Faculty of Business and Globalization
 October -November 2021 Mid-term Examinations
BBMB 414 · Money and Banking

SECTION B (Choose 2 questions) (Total: 50 marks)

Question 1

Inflation may be classified on the basis of factors that induce rise

in prices in Lesotho. Explain FIVE (5) of the possible factors. (25)

Question 2
Explain five (5) factors that can be responsible for an increase in
the aggregate demand for goods and services in Lesotho during
this COVID-19 period. (25)

Question 3
Explain on the basis of inflation five (5) factors that can be
responsible in reducing the supply of goods and services in
Lesotho. (25)

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Faculty of Business and Globalization