Challenges of a large proportion of young people in a population.

1. Increase social evils – idlers look for means of survival.
2. High rate of unemployment – demand for jobs outstrip available resources.
3. Increased dependency ratio – economically active population will shoulder a bigger economic burden.
4. Low per capital income –
5. Low labour supply – many people would be below the productive age.
6. Reduced savings/investments – high rate of consumption leading to low development.

Benefits gained from preparing a development plan.

1. Project evaluation – monitoring the performance of the project in line with the expected outcomes.
2. Stimulation of effort – plan induces people to invest and put greater efforts towards fulfillment of the planned objective.
3. Appropriate resource allocation – help in ensuring resources are not left idle nor used for wrong purposes.
4. Long term decision making – plan considers the set objectives that facilitate realization of the objectives.
5. Avoiding duplication – eliminates establishment – helps in distributing industries to various parts of a country.

Ways of enhancing efficiency in communication.

1. Proper selection of the medium – to eliminate overload in the channel which may cause break down in communication.
2. Use familiar non-verbal signs – to avoid misinterpretation of signs.
3. Use of appropriate language – use simple language or terms that can be understood by the recipient.
4. Avoid pre-judgment – conclusion should be made after receiving the message.
5. Establish a two way communication – continuity in message delivery depends on the involment of the recipient.
6. Proper timing – message should be passed when the recipient is ready to receive it/when not pre-occupied.
7. Adequate preparation of the content by the sender – the sender should be versed with the message.

Factors influencing decisions on what goods and services to produce.

1. Profitability – people produce goods whose return are faster and higher
2. Government policy – Trade produce goods that are allowed by the laws of the country
3. Availability of resources – Goods produces should be the one that have adequate resources
4. Level of competition – People produce goods whose competition is not there as compared with the one that have shift competition
5. Market – Goods which have market are greatly produced
6. Cost of production – Goods and services produce should be cheaper in terms of overall cost

Ways in which Central Bank of Kenya regulates the operations of commercial banks.

1. Bank rate/base rate – can raise/lower the interest charge on loans given to commercial banks.
2. Compulsory/special deposits – can be raised/lowered to control money in circulation.
3. Selective credit control – where only specific sectors of economy are allowed to access loans.
4. Moral suasion – appealing to commercial banks to exercise restraint in lending money to the public.
5. Liquidity ratio – increase/reduction of the proportion of liquid assets to the total assets to control money in circulation.
6. Directives – calling on commercial banks to apply credit squeeze.

Benefits of filing documents in an organization.

1. Protection of Documents – Documents are protected from physical loss and landing into unauthorized hands
2. Make the office tidy – It aids in office tidiness and efficiency
3. Aid to memory – it assist in making future reference when are forgotten
4. Kept Documents neat & tidy – Filling prevent document from being disorganized and make it remain neat
5. Systematic store of information – It ensures that the information is arranged in order thus ensuring easy retrieval

Reasons justifying the use of economic barriers to control free trade.

1. Protection of strategic industries – food and clothing industries.
2. Creation and protection of employment – restrictions discourages imports thereby, encouraging, establishment of industries opportunities locally.
3. Prevention of dumping – to rid disposal of cheap, substandard and inferior goods.
4. Protection of local infant industries – young growing industries are unable to complete favourably with established industries.
5. Preservation of balance of trade deficit in a country.
6. Expanding market for local products – economic barriers creates large market for locally produced goods and services.

Principles of an efficient tax system.

Procedures taken to obtain a valid insurance policy.

1. Filling a proposal form – completing a form designed by the identified insurer providing relevant details of the property to be insured.
2. Determination of premium – calculation of premium to charge in applicant upon studying and accepting to cover the risk.
3. Payment of the first premium –making the first payment after the insurance company has accepted to cover the risk.
4. Issuing of policy – a document issued as the policy is being prepared to show that a contract has been entered between the insurer and the insured.
5. Issuing of policy – actual document of contract between the insurer and the insured.

Contributions of trade in the growth and sustenance of economy.

1. Creation of employment – provide opportunities for jobs.
2. Proper utilization of available resources – idle resources are exploited to create goods.
3. Provide outlet for goods and services – facilitate surplus disposal.
4. Link production and consumption.
5. Source of government revenues – government impose taxes on trading activities.
6. Avail variety of goods and services – consumer choose the most satisfying.
7. Enhances harmony/interpersonal relations – buyers and sellers interact.

Prize winning competition has become common in product promotion. Explain five benefits that will accrue to a firm which uses this method of promotion. (10 marks)

Benefits that accrue to a company by using prize winning competition to promote its products

1. many people will try to buy the product with the aim of winning hence promoting sales.
2. the dates of the draws can be post-poned to enhance more sales
3. people may become more used to buy the product even after the promotion period is over
4. competition helps in creating a good image of the firm
5. it is relatively cheap to use this kind of sales promotion compared to other methods as the cost incurred may be low
6. it creates product awareness to the potential customers

Explain five features of oligopoly.