Kasneb Economics certified notes

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Economics certified notes for Students currently pursuing the following Kasneb courses

The notes are prepared by qualified lecturers with over 20 years experience in teaching and Examining Economics in various universities in Eastern Africa.While other online sellers focuses on sales,we focus much on quality,affordability and effectiveness.We know what it means to pass a kasneb exam. Kasneb is not just like any other examination body:It provides credible and trustworthy assessment and that means only smart students will pass its tests.This notes bring into detail each and every topic in economics while concentrating much on examinable content.




This Economics certified notes will cover the following Economics units

4.1 Microeconomics

4.1.1 Introduction to economics

  1. Definition of economics
  2. Micro and macro economics
  3. The methodology of economics and its basic concepts
  4. Economic descriptions and analysis
  5. Scarcity, choice, opportunity cost and production possibility frontiers and curves
  6. Economic systems: free economy, planned economy and mixed economy
  7. Specialisation and exchange

4.1.2 Demand, supply and determination of equilibrium Demand analysis

  1. Definition
  2. Individual demand versus market demand
  3. Factors influencing demand
  4. Exceptional demand curves
  5. Types of demand
  6. Movement along and shifts of demand curves
  7. Elasticity of demand
  8. Types of elasticity: price, income and cross elasticity  Measurement of elasticity; point and arc elasticity
  9. Factors influencing elasticity of demand
  10. Application of elasticity of demand in management and economic policy decision making Supply analysis

  1. Definition
  2. Individual versus market supply
  3. Factors influencing supply
  4. Movements along and shifts of supply curves
  5. Definition of elasticity of supply
  6. Price elasticity of supply
  7. Factors influencing elasticity of supply
  8. Application of elasticity of supply in management and economic policy decision making Determination of equilibrium

  1. Interaction of supply and demand, equilibrium price and quantity
  2. Mathematical approach to equilibrium analysis
  3. Stable versus unstable equilibrium
  4. Effects of shifts in demand and supply on market equilibrium
  5. Price controls
  6. Reasons for price fluctuations in agriculture

4.1.3 The theory of consumer behavior

  1. Approaches to the theory of the consumer- cardinal versus ordinal approach
  2. Utility analysis, marginal utility (MU), law of diminishing marginal utility (DMU)
  3. Limitations of cardinal approach
  4. Indifference curve analysis
  5. Budget line
  6. Consumer equilibrium; effects of changes in prices and incomes on consumer
  7. Derivation of a demand curve
  8. Applications of indifference curve analysis: substitution effect and income effect for a
    normal good, inferior good and a giffen good; derivation of the Engels curve
  9. Consumer surplus

4.1.4 The theory of a firm The theory of production

  1. Factors of production
  2. Mobility of factors of production
  3. Production function analysis
  4. Short run analysis
  5. Total product, average and marginal products
  6. Stages in production and the law of variable proportions/ the law of diminishing returns
  7. Long run analysis
  8. Isoquant and isocost lines
  9. The concept of producer equilibrium and firm’s expansion curve
  10. Law of returns to scale
  11. Demand and supply of factors of production
  12. Wage determination theories
  13. Trade unions: functions and challenges
  14. Producer surplus/economic rent The theory of costs

  1. Short run costs analysis and size of the firm’s total cost, fixed cost, average cost, variablecosts and marginal cost
  2. Long run costs analysis
  3. Optimal size of a firm
  4. Economies and diseconomies of scale

4.1.5 Market structures

  1. Definition of a market
  2. Necessary and sufficient conditions for profit maximisation
  3. Mathematical approach to profit maximisation
  4. Output, prices and efficiency of: perfect competition, monopoly, monopolistic competition, oligopolistic competition

4.2 Macroeconomics

4.2.1 National income

  1. Definition of national income
  2. Circular flow of income
  3. Approaches to measuring national income
  4. Concepts of national income: gross domestic product (GDP), gross national product (GNP) and net national product (NNP), net national income (NNI) at market price andfactor cost, disposable income
  5. Problems of measurement; uses of national income statistics and their limitations
  6. Analysis of consumption, saving and investment and their interaction in a simple
    economic model
  7. Determination of equilibrium national income
  8. Inflationary and deflationary gaps
  9. The multiplier and accelerator concepts
  10. Business cycles/cyclical fluctuations

4.2.2 Economic growth, economic development and economic planning

  1. The differences between economic growth and economic development
  2. Actual and potential growth
  3. The benefits and costs of economic growth
  4. Determinants of economic development
  5. Common characteristics of developing countries
  6. Role of agriculture and industry in economic developmentObstacles to economic development
  7. The need for development planning
  8. Short term; medium term and long term planning tools
  9. Limitation of planning in developing countries

4.2.3. Money and banking Money

  1. The nature and functions of money
  2. Demand and supply of money
  3. Theories of demand for money: The quantity theory, the Keynesian liquidity preference
    theory The banking system

  1. Definition of commercial banks
  2. The role of commercial banks and non-banking financial institutions in the economy
  3. Credit creation
  4. Definition of central bank
  5. The role of the central bank; traditional and changing role in a liberalised economy, such
    as financial sector reform, exchange rate reform
  6. Monetary policy, definition, objectives, instruments and limitations
  7. Determination of interest rates and their effects on the level of investment, output,
    inflation and employment
  8. Harmonisation of fiscal and monetary policies
  9. Simple IS -LM Model
  10. Partial equilibrium and general equilibrium

4.2.4 Inflation and unemployment Inflation

  1. Definition and types of inflation
  2. Causes of inflation: cost push and demand pull
  3. Effects of inflation
  4. Measures to control inflation Unemployment

  1. Definition of unemployment
  2. Types and causes of unemployment
  3. Control measures of unemployment
  4. Relationship between unemployment and inflation: the Phillips curve

4.2.5 International trade and finance

  1. Definition of International trade
  2. Theory of absolute advantage and comparative advantage
  3. World trade organisation (WTO) and concerns of developing countries
  4. Protection in international trade
  5. Regional integration organisations, commodity agreements and the relevance to less
    developed countries (LDCs)
  6. Terms of trade, balance of trade, balance of payments (causes and methods of correcting
    deficits in balance of payments), exchange rates types of foreign exchange regimes,
    factors influencing exchange rate foreign exchange reserves
  7. International financial institutions: International Monetary Fund (IMF) and World Bank
  8. National debt management: causes and interventions
  9. Structural Adjustment Programmes (SAPs) and their impacts on the LDCs

4.2.6 Current developments

Factors affecting economic development: Informal credit market, development index,
growth of market structures, voting behaviour technology transfer, democracy and
development, environmental concerns.

4.2.7 Emerging issues and trends


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