Macroeconomics

Course Code   :	ECON 204-E1	Course Title:	Macroeconomics
Time               :	— PM- —- PM	Duration       :	Minutes/ Hour
Student Name:		Student ID    :

Instructions to Candidates:

1. Do not open this exam paper until you are told by the invigilator.
2. This exam paper consists of  __4__  pages ( including this cover sheet)
3. Students are expected to respect the College code of Academic honesty and conduct themselves according to these standards. Students who violate academic integrity standards during the exams will be subject to disciplinary measures as stated in the Student Academic Integrity Policy in the student handbook.

Grading Scheme:

Question	Maximum Marks	Marks Awarded	C L O
1	5		2
2	5		2
3	5		3
4	5		3
Total Marks:	20

Q1   Explain the three different types of unemployment. Give an example of each type. Given what you have learned about the different types of unemployment, suggest three policies that could be used to reduce unemployment, one for each type of unemployment.

 (CLO2) (5marks) (150-200 words)

 Q2. Describe What is meant by the phrase “not in the labor force?” Give examples of why people might be in this state.                                               (CLO2) (5 marks) (100-150 words)

It means people over the age of fifteen who are not looking for work, either because they do not want a job or because they have given up looking. It might include retirees, full-time students, stay-at-home parents, individuals in institutions like prisons or mental hospitals or elderly parents.

Q3. Analyze   why each of the following items is excluded from GDP:

         (a) profits from the stock and bond market  

         (b) transfer payments (c) sale of used goods

         (d) goods and services produced in the home. Explain why the following items are     included in GDP:    

        (a) depreciation

         (b) change in business inventories

        (c) indirect taxes

                                                                                             (CLO3) (5 marks) (200-250 words).

Q4. Explain what net exports are and why they are included in the definition of GDP.

 (CLO3) (5 marks) (100-150 words)