Uganda Advanced Certificate of Education



Paper 1

3 Hours


  • Section A is compulsory
  • Answers to this section should be precise and concise.
  • Answer four questions from section B.
  • Credit will be given for use of relevant graphs.

SECTION A: (20 Marks)

1.(a)(i) Distinguish between gross domestic product of factor costs and

net national product of market price.                         (02mks)

(ii) Given gross domestic product of factor costs, what adjustments are required to

obtain net national product at market prices?                    (02mks)

(b)(i) Differentiate between big push theory and balanced growth theory of

economic growth.                                        (02mks)

(ii) State any two factors that limit the implementation of big push strategy of

economic growth in your country.                             (02mks)


(c)(i) Distinguish between frictional and structural unemployment.             (02mks)

(ii) Mention two causes of frictional unemployment in a market economy.         (02mks)


(d)(i) Distinguish between currency devaluation and currency depreciation.     (02mks)

(ii) Given the exchange rate of 1 U.S $ for Shs.2,900, if Uganda devalued her currency

By 10%. Calculate the new exchange rate.                         (02mks)

(e)(i) Distinguish between reproductive and dead weight debt.             (02mks)

(ii) State two methods of settling public debts in developing countries.         (02mks)



                            SECTION B: (80 Marks)

Attempt any four questions in this section


2.(a) Distinguish between price legislation and price discrimination.             (04mks)

(b) Discuss the reasons for the existence of price legislation in a market economy(16mks)


3.(a) Differentiate between economic growth and economic under-development.(04mks)

(b) Discuss the factors that influence economic growth rate in developing economies.


4.(a) State the marginal productivity theory of distribution.                 (02mks)

(b) Examine the applicability of the marginal productivity theory of distribution to

developing economies.                                     (18mks)

5.(a) Distinguish between cost push inflation and demand pull inflation.         (04mks)

(b) To what extent is inflation in developing economies caused by rising costs of

production.                                            (16mks)


6.(a) Describe the features of an economic union.                         (06mks)

(b) Discuss the factors that limit economic integration in developing economies.     (14mks)


7.(a) Distinguish between centralized and decentralized planning.             (04mks)

(b) Examine the implications of decentralized planning in developing economies. (16mks)



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