LANDMARK POLYTECHNIC

AYETORO/ITELE, OGUN STATE

ND 1 FRIRST SEMESTER EXAMINATION

COURSE: -PRINCIPLE OF ECONOMICS
CODE: - BFN 124/ECO
CLASS:-

Instruction: Attempt question one and any other three

Question 1
a. Write short notes on:
i. Gross Domestic Product (GDP)
ii. Gross National Product (GNP)
iii. Gross National Product (NNP)
iv. Net Income Product (NNP)
v. National Income (N.I)
b. Critically examine the circular flow of income with the aid of diagram using
a tow sector economy
c. In an economy, the following data relates to certain macro economic
variable released.
C= 100 + 0.65y
I = #400 million
G = #700 million
X = #200 million
M = #150 million
Where I is the autonomous consumption, G is autonoms government spending, X
is Export and M is import. Based on the model Y = c + I + G + (X – M)
Required:
i. Compute the equilibrium of National Income
ii. What is the level of investment multiplier
d. Define a savings function and illustrate further with the aid of diagram
Question 2
a. Write short note
i. Near money
ii. Token money
iii. Currency
iv. Legal tender
v. Standard coin
b. Evaluate the functions of money in a modern economy
c. Examine three motive of holding money according to Keynesians
Question 3
a. What is international trade?
b. Differentiate between bi-lateral and multi-lateral trade
c. Out line the reason’s for international trade
d. Evaluate the demerits of global trade
Question 4
a. What is National Budget?
b. Briefly explain the following
i. Budget surplus
ii. Budget deficit
iii. Balanced budget.
c. Out line some of the conditionalties of IMF in granting loans to third world
countries
Question 5
a. What is Economic growth
b. Highlight five major determinants of economic growth
c. If the marginal propensity to consume (MPC) is 0.60, calculate the following
i. Marginal propensity to consume (MPC)
ii. Multiplier
iii. By how much will National Income increase if consumption expenditure
increase by #800 million.