April 2025 CPA Economics Past Paper & Solutions PDF Download

1a

Introduction to economics

Explain THREE basic economic problems

1b

Money and banking

Analyse the THREE motives of holding money as advanced by the Keynesian liquidity preference theory.

1c

Inflation and unemployment

Identify EIGHT policy measures that could be adopted by developing countries to encourage industrial development.

2a

Demand, supply and determination of equilibrium

Outline FOUR assumptions underlying consumer rational behavior.

2b

Demand, supply and determination of equilibrium

Highlight SIX features of monopolistic competitive firms.

2c

Introduction to economics

Explain FIVE applications of production possibility curves in economics.

3a

Demand, supply and determination of equilibrium

Given the demand function:

\(Q = 350 – 1.5Q + {\large \frac{70}{p^2}}\)

Required:

(i) Determine the point elasticity of demand when price is Sh.10.

(ii) Interpret your results.

3b

Money and banking

Identify FIVE positive effects of high interest rates in an economy.

3c

Demand, supply and determination of equilibrium

Outline FIVE limitations of indifference curve analysis.

3d

National income

Distinguish between the “fiscal multiplier” and the “export multiplier”.

4a

Demand, supply and determination of equilibrium

Identify FIVE conditions that are necessary for effective use of price discrimination in an economy.

4b

Money and banking

Explain FOUR functions of money.

4c

Demand, supply and determination of equilibrium

Outline FIVE advantages of a perfectly competitive market.

4d

Money and banking

Summarise SIX factors that might determine the exchange rate of a country’s currency.

5a

Economic growth, economic development and economic planning

Highlight FIVE limitations of economic planning in developing countries

5b

Economic growth, economic development and economic planning

Explain FOUR advantages of localisation of industries in a country.

5c

Demand, supply and determination of equilibrium

Using an appropriate diagram, illustrate the relationship between marginal product curve (MP) and average product curve (AP).

5d

Demand, supply and determination of equilibrium

State SIX factors that may influence price elasticity of demand

6a

Demand, supply and determination of equilibrium

Distinguish between “variable costs” and “fixed costs”.

6b

Introduction to economics

Describe FIVE ways in which a government may influence allocation of resources

6c

Demand, supply and determination of equilibrium

Outline FIVE determinants of supply in an economy.

6d

Money and banking

Explain THREE conditions necessary for devaluation of a currency to be effective.

7a

National income

The following data represents estimated national income of an economy in millions of shillings:

Gross national product (at market prices)	= 498.5
Depreciation allowance	= 56.0
Indirect taxes less subsidies	= 52.4
Business taxes	= 13.5
Personal income taxes	= 76.2
Government transfers	= 68.2
Retained profits	= 15.0
Required:
Determine the following:

(i)	Net National Product at market price.
(ii)	Disposable income.
(iii)	Personal income.
(iv)	Net National Income at factor cost.

7b

Inflation and unemployment

Outline THREE causes of cost-push inflation.

7c

Economic growth, economic development and economic planning

Explain FIVE arguments against international trade restrictions.

7d

Demand, supply and determination of equilibrium

Identify FOUR factors that might influence the price of labour as a factor of production.

April 2025

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