The table below represents economic transactions for country XYZ in billions of shillings: Total output Intermediate purchases Agriculture 30 10 Manufacturing 70 45 Services 55 25 Required: i) Calculate the Gross National Product of this economy using the value added approach. (3 marks) ii) If depreciation and indirect taxes equal […]

Why is it important to estimate National Income of a Country? What difficulties do economists encounter while carrying out such a task particularly in developing countries?

Discuss the tax implications of the following independent transactions: (i) 16% VAT paid on a new factory building constructed on behalf of Wema Ltd. VAT of Sh.60,000 due on the invoice to Disaster Limited which has remained unsettled by them for 6 months. Transfer of a building worth Sh.5,000,000 from […]

Inspection and monitoring of quality control by a firm of auditors involves both inhouse and external procedures. The internal procedures include the post-audit review, sometimes known as a “cold review”. The external procedures are sometimes known as “external practice inspections” or “peer reviews”. Required: a) Write explanatory notes on the […]

Interlink Services Ltd. (ISL) are in the process of introducing a new service. The technical services manager has listed following activities, their predecessors and associated costs: Activity Predecessor (Weeks) Expected time Standard deviation Cost (Sh.) A – 8 1.0 41,600 B – 3 0.25 15,600 C A 7 0.69 36,400 […]

Discuss the three approaches used in measuring the national income of a country and show why they give the same estimate.

Assume the following information represents the National Income Model of an „Utopian‟ economy. Y = C + I + G C = a + b(Y – T) T = d + tY I = IO G = GO Where a > O; O < b < 1 d > O; […]

Joseph and Anne can use one strategy some of the time and the other strategy the rest of the time. Consider the following case of player one (Joseph) and the opponent (Anne). Joseph  has two strategies A and B whereas the opponent, Anne  has strategies X and Y. Utilities have […]

(a) In the context of game theory, explain the following statement: “winning isn’t everything; it is the only thing” (5 marks) (b) The optimal solution of a two-person zero-sum game always represents a saddle point regardless of whether the players use pure or mixed strategies. Explain. (10 marks)