Logistics & Transport

Topics: Net present value, Finance, Economics Pages: 4 (671 words) Published: February 15, 2014
CILT K/2206
ECONOMICS AND FINANCE
December 10, 2012
Time: 3 hours

THE CHARTERED INSTITUTE OF LOGISTICS AND TRANSPORT

DIPLOMA IN LOGISTICS AND TRANSPORT
LEVEL 2 – PROFESSIONAL DIPLOMA

ECONOMICS AND FINANCE
3 hours

INSTRUCTIONS TO CANDIDATES
Answer any FIVE questions
All questions carry equal marks

1. a) The government of Kenya has been in the forefront of supporting small and medium enterprises (SME’S) since independence through establishment of different financial institutions. Explain the sources of funds from the government of Kenya promoting the development of SME’S. (10 Marks)

b) For a business to start operating, it has to obtain capital from both internal and external sources. As a Finance Manager of METROLOG LTD explain in details the advantages and disadvantages associated with such kind of sources of finance that the company may experience. (10Marks)

2. a) Write short notes on the following terms as used in Economics and finance in relation to logistics and transport i. Base lending rate (2Marks)
ii. Spread (2Marks) iii. Money illusion (2Marks) iv. Autonomous investment (2Marks) v. Speculative demand for money (2Marks) b) Money is a very important resource in any economy that serves different roles and functions. Clearly discuss the five basic functions of money that makes it to be used universally all over the world. (10 Marks)

3. A. There are different theories that were proposed by different economics scholars to explain consumption functions. Discus the four major theories of consumption and use diagrams where necessary. (16 Marks)

B. Several factors determine consumption of an individual. Explain any four determinants of consumption. (4...
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