1. a) i) Distinguish between vertical and horizontal merging of firms.

ii) Mention any two merits of merging firms.

b) i) Differentiate between a proportional tax and a progress tax.

ii) Give two advantages of a progressive tax.

c) i) State the balanced growth theory.

ii) Mention any three conditions necessary for the success of the balanced growth theory in an economy.

d) i) What is meant by monetary policy?

ii) State any three tools of monetary policy. 

e)  i) What is a Production Possibility Frontier?

ii) Give any three causes of an outward shift of the Production Possibility Frontier.

2.  a) Explain the Keynesian theory of unemployment

b) What are the limitations of the Keynesian theory of unemployment in developing countries?

3. a) Describe the methods used to compute national income in an economy.

b) What measures may be adopted to increase the level of national income in an economy?

4. a) Distinguish between labout-intensive and capital-intensive techniques of production.

b) Why should capital intensive techniques of production be adopted by developing countries?

5. a) Distinguish between price elasticity of demand and income elasticity of demand.

b) Explain the determinants of price elasticity of demand in an ecomony.

6. a) Account for the unfavorable terms of trade in developing countries.

b) Suggest measures that should be taken to improve the terms of trade in developing countries.

7. a) Describe the principles of economic development planning.

b) What challenges do developing countries face when implementing development plans?