KCSE Business Studies Topical Questions and Answers

Explain five factors that influence the level of natural development of a country

25/9/2021

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Factors that influence level of development of a country

Labour supply
A country with well skilled and knowledgeable labour will be more developed than a country with semi skilled labour
Capital
Most developed countries have large pool of capital. Most countries with large pool of capital will be able to use it to develop all sectors in a country
Entrepreneurship
A country with good management and coordination of the other factors of production will lead to high and effective production hence it will be highly developed
Land
These are the resources a country has. A country with a lot of natural resources will utilize them and hence developed
Level of technology
A country with latest aid modern technology will produce modern items hence have large market leading to development
Political stability
This is the main key point in a country that is politically stable will attract many industries both locally and foreign investors hence this will lead to development

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Describe the importance of the structure for economic growth

25/9/2021

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Importance of age structure for economic growth

Individuals do not contribute equally to production
Supply of labour depends on the proportion of the workforce
Economically active in population depend on the age structure
Age structure assist the government in planning
The proportion of dependants influence the pace of economic growth

Describe the importance of the structure for economic growth

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Explain five disadvantages of progressive taxes

25/9/2021

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Disadvantages of progressive taxes

This taxes are difficult to understand
They are also difficult to measure utility
It’s a way of punishment to hard ward
It breeds corruption for it can be evaded
It hampers social welfare
It can lead to scope of tax evasion
It doesn’t encourage capital formation

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Outline four characteristics of underdevelopment

22/9/2021

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Characteristics of underdevelopment

High level of poverty
Disparity in income distribution
Low levels of savings and investments
High population growth rate
Dominance of subsistence sector
Problem of unemployment
Under utilization of natural resources
Dependence on the developed countries
Low labour productivity
Poor infrastructure

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Explain five factors that may hinder economic development in Kenya.

21/12/2020

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Explain five factors that may hinder economic development in Kenya.

Factors that may hinder economic development in Kenya include:

Inaccessibility to appropriate technology leading to low quality/quantity.
Inadequate research data. .
Poor development planning.
Inadequate skilled labour force.
inadequate natural resource endowment.
Brain drain-skilled man power seeking greener pastures elsewhere.
Low demand for goods/services.
Negative socio-cultural practices.
Inadequate/lack of foreign exchange.
Poor governance/corruption.

Explain five factors that may hinder economic development in Kenya.

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Highlight four benefits that a country would get by developing her infrastructure.

21/12/2020

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Highlight four benefits that a country would get by developing her infrastructure.

Benefits that a country would get by developing her infrastructure include:

Attraction of foreign investment.
Creation of employment opportunities.
Improved security.
improved health.
increased production levels.
Enhanced movements of goods and services.
Increased per capital! income.
Increased exploitation of available resources.
Increased entrepreneurial activities.
Easier/faster communication.
Reduced cost of production.
Equitable development.

Highlight four benefits that a country would get by developing her infrastructure.

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Highlight four problems of development planning that a country may experience.

20/12/2020

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Highlight four problems of development planning that a country may experience.

Problems of development planning that a country may experience include:

Inadequate data on economic performance.
Unreliable data which may not be useful in planning.
Less qualified personnel to cope with the tasks of development planning.
Private sector activities are not easily coordinated.
Political rigidity.
Inappropriate use of technology.
Unplanned population.
Over-reliance on donor funding.

Highlight four problems of development planning that a country may experience.

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State four forms of economic integration that may exist between countries.

20/12/2020

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State four forms of economic integration that may exist between countries.

Forms of economic integration include:

Common Markets - to have a common currency to increase free trade and full mobility of factors of production.
Free Trade Areas - where barriers such as tariffs and quotas are removed.
Customs Unions - member countries charge common external tariffs.
Economic Union - where common economic institutions like banks are set to deal with monetary policy.

State four forms of economic integration that may exist between countries.

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Discuss causes of unfavourable balance of payment for most developing countries,

17/12/2020

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Discuss causes of unfavourable balance of payment for most developing countries,

Causes of unfavourable balance of payment for most developing countries include:

Reliance on primary products for export. Most developing countries mainly export primary agricultural products which fetch low prices in the international market.
Heavy importation of finished goods. Most developing countries import finished manufactured goods whose value are very high hence spend more on them.
Low levels of technology. Most developing countries rely on low levels of technology in production which compromises the quality of their exports and also lowering their value.
Too much reliance on foreign borrowing. Most developing countries finance their development projects through heavy borrowing yet such loans are repaid with heavy interests.
Susceptibility to natural calamities. Many developing countries are easily affected by natural disasters like drought which adversely affect their production.
Preference towards foreign goods. Most consumers in developing countries prefer goods manufactured in foreign countries in the belief that they are of better quality.
Unfavourable world economic order. The developing countries have very little say in international trade forums and cannot influence the world economic order in their favour.

Discuss causes of unfavourable balance of payment for most developing countries,

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Explain six factors that may hinder the development of a country.

17/12/2020

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Explain six factors that may hinder the development of a country.

Factors that may hinder the development of a country include:

Low demand for goods and services which discourages production activities hence interfering with development.
Inadequate capital which leads to low levels of development
Negative sociocultural practices which may hinder production and consumption of certain goods and services.
Inadequate foreign exchange which limits access to imports hence affecting production and consumption.
Limited entrepreneurial abilities resulting into inefficiency in production.
Poor management of resources arising from inadequate skills, corruption and poor governance which limit the extent of growth and development.
Poor nutrition and disease prevalence which renders some of the people unproductive as well as channeling much of the income into provision of health care instead of investment.
Use of inappropriate technology which compromises the quantity and quality of goods and services produced.

Explain six factors that may hinder the development of a country.

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State four reasons why economic development is desirable to a country.

16/12/2020

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State four reasons why economic development is desirable to a country.

.Reasons why economic development is desirable to a country include:

improve standard of living of the citizens
improve infrastructure
create employment
increase life expectancy
reduce rural-urban disparity
improve the social welfare of citizens

State four reasons why economic development is desirable to a country.

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Outline four ways in which government expenditure may stabilize the economy of a country.

16/12/2020

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Outline four ways in which government expenditure may stabilize the economy of a country.

Ways in which government expenditure stabilizes the economy of a country include:

Provision of security - This creates an enabling environment for economic activities.
Creation and maintenance of administrative departments. These are created for effective operation of a country’s economy.
Social services - This enhances the welfare of the population for effective participation in economic activities.
Spending on infrastructure - It improves efficiency in production and distribution of goods and services in the economy.
Advancement of non-interest earning capital to entrepreneurs during economic recess.
Provision of basic goods and services through subsidies
Promoting local industries by giving them incentives.

Outline four ways in which government expenditure may stabilize the economy of a country.

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Many countries in Africa, Latin America and Asia are considered to be under-developed. Outline four characteristics they have in common. (4 marks)

15/12/2020

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Characteristics of Under-Developed Countries/Nations

Characteristics of underdevelopment that are common among countries in Africa, Latin America and Asia include:

Low per-capita income.
High population growth rate.
Poor standards of living.
Low literacy levels.
High levels of unemployment.
Poor health care.
Low life expectancy.
Over reliance on primary level of production/high levels of subsistence production.
High dependency ratio.
Poor infrastructure.
Low technological levels.
Large income disparities.
Low levels of labour productivity.

Characteristics of Under-Developed Countries/Nations

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Discuss five reasons why less developed countries are reluctant in implementing free trade agreement. (10mks)

12/12/2020

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Discuss five reasons why less developed countries are reluctant in implementing free trade agreement.

Reasons why less developed countries are reluctant in implementing free trade agreement.

Avoid unfair competition from developed countries with superior products as it may/could lead to loss of market for their products.
Prevent dumping of inferior goods by developed countries which may have adverse effects on the economy.
To safeguard local employment this may suffer due to free entry of imports.
Reduce balance of payments deficits; as a result of payment for imports exceeding receipts form exports.
Safeguard against government revenue otherwise earned through taxation of exports/imports.
Safeguard against government revenue otherwise earned through taxation of exports/imports.
Avoid erosion of cultural values arising from unrestricted interruption in free trade
Avoid over exploitation of resources which may be depleted/exhausted due to increase demand in free trade.
Avoid imported inflation which may be caused by inflow of highly priced imports.
Prevent entry of harmful goods/ services which may have adverse effects on the health of the people/accept examples if harmful goods as explanation.

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State four factors that could hasten the economic development of a country. (4mks)

11/12/2020

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State four factors that could hasten the economic development of a country.

Factors hasten economic development in a country include

Industrialization
Infrastructure/ social amenities
Research and developing / planning
Education and training
Use of modern technology/ capital
Good medical facilities
Good governance/ government goodwill
Economic endowed / natural resources
Presence of a strong entrepreneurial culture

State four factors that could hasten the economic development of a country. (4mks)

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KCSE BASED BUSINESS STUDIES Q & A

Explain five factors that influence the level of natural development of a country

Describe the importance of the structure for economic growth

Explain five disadvantages of progressive taxes

Outline four characteristics of underdevelopment

Explain five factors that may hinder economic development in Kenya.

Explain five factors that may hinder economic development in Kenya.

Highlight four benefits that a country would get by developing her infrastructure.

Highlight four benefits that a country would get by developing her infrastructure.

Highlight four problems of development planning that a country may experience.

Highlight four problems of development planning that a country may experience.

State four forms of economic integration that may exist between countries.

State four forms of economic integration that may exist between countries.

Discuss causes of unfavourable balance of payment for most developing countries,

Discuss causes of unfavourable balance of payment for most developing countries,

Explain six factors that may hinder the development of a country.

Explain six factors that may hinder the development of a country.

State four reasons why economic development is desirable to a country.

State four reasons why economic development is desirable to a country.

Outline four ways in which government expenditure may stabilize the economy of a country.

Outline four ways in which government expenditure may stabilize the economy of a country.

Many countries in Africa, Latin America and Asia are considered to be under-developed. Outline four characteristics they have in common. (4 marks)

Characteristics of Under-Developed Countries/Nations

Discuss five reasons why less developed countries are reluctant in implementing free trade agreement. (10mks)

Discuss five reasons why less developed countries are reluctant in implementing free trade agreement.

State four factors that could hasten the economic development of a country. (4mks)

State four factors that could hasten the economic development of a country.

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