1.a.Explain TWO (2) differences between Gross Domestic Product (GDP) and Gross

National Product (GNP).

b.Using an appropriate diagram, explain the circular flow of income in a two sector

economy.

2.a.Explain TWO (2) functions of money.

b.Explain THREE (3) characteristics of money.

3.Explain any FIVE (5) instruments of monetary policy used to control inflation.

4. Explain FIVE (5) reasons implementing protectionism in a country.

5.a.Define the structure of Malaysia's Balance of Payments.

b.Explain FOUR (4) ways overcome the deficit in Balance of Payments.