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Economics Practice Assessment: Paper 2 (Extended)

This section continues the structured questions, focusing on banking, international trade, business organizations, and market analysis.

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QUESTION 1

• (a) Distinguish between the following as used in banking:

  • (i) A bank current account and bank deposit account. (2mks)

  • (ii) Bank rate and cash ratio. (2mks)

• (b) Briefly explain four (4) methods by which commercial banks act as agents of payment. (8mks)

• (c) State four (4) groups of people who lose during inflation and explain why. (8mks)

QUESTION 2

• (a) Distinguish between currency depreciation and currency appreciation. (4mks)

• (b) Explain four (4) reasons why countries restrict international trade. (8mks)

• (c) State and explain two (2) advantages and two (2) disadvantages of international trade. (8mks)

QUESTION 3

• (a) What is:

  • (i) Private Limited Company. (3mks)

  • (ii) Nominal partners. (3mks)

• (b) Explain four (4) sources of finance available to a public limited company. (8mks)

• (c) Explain three (3) importance of co-operative societies to the economy of Cameroon. (6mks)

QUESTION 4

• (a) Explain with possible examples the following:

  • (i) Internal diseconomies of scale. (2mks)

  • (ii) Variable cost. (2mks)

• (b) State and explain four (4) ways by which the supply of labour can be increased in the economy of Cameroon. (8mks)

• (c) State and explain four (4) reasons why firms integrate vertically. (8mks)

QUESTION 5

Study the schedule below and answer the questions that follow:

Price (FCFA)	Quantity Demanded (Kg)	Quantity Supplied (Kg)
40	4000	1000
50	3000	3000
60	1000	4000

• (a) Calculate the price elasticity of supply when price falls from 60 FCFA to 40 FCFA. (4mks)

• (b) State one possible example each of goods represented by the following concepts below and state the concept:

  • (i) The Supply for one good automatically leads to the supply of the other. (2mks)

  • (ii) The demand for one good automatically causes the demand for the other. (2mks)

  • (iii) An increase in the supply of one good automatically leads to a fall in the supply for the other. (2mks)

• (d) Briefly explain three (3) reasons for the existence of abnormal demand. (6mks)

• (e) Explain with the aid of demand and supply diagrams what will happen to the equilibrium price of meat when consumers’ income increase. (4mks)

QUESTION 6

• (a) Define the following terms:

  • (i) Under Population. (2mks)

  • (ii) Life expectancy. (2mks)

  • (iii) Infant mortality rate. (2mks)

• (b) The Population of a certain country in January 2024 was 24 Million inhabitants, comprising of 30% youth, 60% working age. The total output for the year was valued at 480 million FCFA.

  • (i) What is the size of the dependent population. (4mks)

  • (ii) Define dependence ratio and determine its value in this country. (4mks)

• (c) State and explain three (3) possible effects of a growing population. (6mks)

QUESTION 7

• (a) Define the following concepts:

  • (i) Gross Domestic Product (GDP). (2mks)

  • (ii) Gross National Product (GNP). (2mks)

  • (iii) Consumption. (2mks)

  • (iv) Savings. (2mks)

• (b) State and explain three (3) factors that can increase the size of country’s National Income. (6mks)

• (c) Briefly explain three (3) methods used in measuring the National Income of a country. (6mks)

QUESTION 8

• (a) Explain the following concepts as used in Economics:

  • (i) Tax evasion. (2mks)

  • (ii) Tax avoidance. (2mks)

• (b) Define and explain two (2) reasons each why the government may adopt:

  • (i) A budget surplus. (4mks)

  • (ii) A budget deficit. (4mks)

• (c) State and explain four (4) negative effects of an increase in indirect taxes in the economy of Cameroon. (8mks)

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END!