THE UNITED REPUBLIC OF TANZANIA

PRESIDENT’S OFFICE, REGIONAL ADMINISTRATION AND

LOCAL GOVERNMENT

FORM SIX SPECIAL SCHOOLS JOINT EXAMINATION

CODE: 151/2 ECONOMICS 2

Time: 3:00 HRS Tuesday 12-March-2024 PM

INSTRUCTIONS

1. This paper consists of sections A, B, and C with a total of eight (8) questions.

2. Answer all questions in section A and two (2) questions from each sections B and C.

3. Section A carries twenty (20) marks and section B and C carries forty (40) marks each.

4. Non programmable calculator may be used.

5. All communication devices and any unauthorized materials are not allowed in the examination
room.

6. Write your examination number on every page of your answer booklet(s).

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 SECTION A (20 Marks)
Answer all questions in this section

1. Describe the benefits of land transportation.

2. Briefly explain the roles that secondary sector play in developing countries.

SECTION B: (40 Marks)

Answer two (02) questions from this section

3. (a) Studies shows that the per capita income of the two countries namely A and B are €22,000
and €9500 respectively. Do you think the people living in the two countries have the same
standard of living?
(b)You are given the following information about country X
Consumption (C) = 𝟓𝟎𝟎 + 𝟎. 𝟕𝟓𝒀
Government expenditure= (𝑮) = 𝟕𝟓𝟎
Investment(𝑰) = 𝟐𝟎𝟎
Changes in investment ▲I=50

Determine:

(i) Equilibrium level of income

(ii) Consumption level
(iii) APC, APS, MPC and MPS
(iv) The new level of national income

4. (a) Briefly describe the advantages and disadvantages of progressive and regressive taxation
system used to collect tax in the economy. Two points in each case.

Page 2 of 4
 b. study the following information in the following table

TAXPAYERS INCOME PERCENTAGE OF AMOUNT OF TAX

INCOME PAID IN TAX
PERSON 1 100,000 - 10,000

PERSON 2 300,000 - 45,000

PERSON 3 500,000 - 110,000

PERSON 4 100,000 - 10,000

PERSON 5 300,000 - 30,000

PERON 6 600,000 - 60,000

PERSON 7 200,000 - 40,000

PERSON 8 400,000 - 40,000

PERSON 9 500,000 - 40,000

i) fill the gaps of percentage of income paid in tax

ii) Identify the taxation system applied to taxpayers and plot the curves representing
the tax system.

5. (a) Briefly describe the types of exchange rates used by different countries.
(b) Consider two countries, P and Q, which produce and consume two goods, Maize and
Beans.
Suppose that when both countries use all their resources efficiently to produce Maize, the
resulting outputs are:
Country P: 120 units
Country Q: 100units
When they use all their resources to produce Beans, the resulting outputs are:
Country P: 150 units
Country Q: 200 units
i. On the same axis draw the countries’ production possibility frontiers.
ii. Which country has absolute advantage and explain how will specialize?
iii. Explain which country has a comparative advantage in Maize and which has a
comparative advantage in Beans?

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 SECTION C: (40 Marks)
Answer two (2) questions from this section

6. East African countries had a dream to form political federation in the future period. Suggest
the economic benefits if they achieved their dream. (6 points)

7. Theories of economic growth and development paved the way towards the growth of our
economy. How the government of Tanzania benefit from those theories? (6 points)

8. The central Bank of Tanzania (BOT) has a mandate to licensing, regulating and supervising
commercial banks and all other financial intermediaries to ensure economic growth. Examine
the major challenges hinders the BOT when implementing monetary policy? (6 points)

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