a)Explain FIVE benefits a person gets as a result of taking a whole life policy with an insurance company. 10mks

b)A commodity X has an abnormal demand curve and a normal supply curve. With an aid of a diagram explain the effects on the equilibrium quantity and price caused by an increase in supply. 10mks

2. a)Explain FOUR circumstances when a manufacturerwouldprefer promoting sales of his products using personal selling method. 8mks

b)Maendeleo Traders have the following information in their books of account on 31st December 2002.

Kshs.

Stock (01/01/2002 6,000

Sales 100,000

Return-in 2,000

Return-out 2,800

Carriage-in 1,000

Carriage-out 1,500

Purchases 88,000

Stock (31/12/2002) 4,000

Commission earned 3,500

Discount allowed 2,200

Sundry expenses 4,000

Discount received 4,400

Postage 800

Stationery 1,200

REQUIRED

(i) Prepare trading profit and loss account for Maendeleo Traders 10mks

(ii) Calculate - Mark -up 1mk

(ii) - ROSTO 1mk

3. a)Explain FIVE differences between public corporations and co-operative societies 10mks

b)Explain FIVE sources of monopoly. 10mks

4. a)Explain FIVE factors that can contribute to the expansion of firms in a given industry. 10mks

b)Highlight FIVE principles of taxation. 10mks

a)Below are the national income estimates of country Q during the year 2004.

Value in Kshs. 000,000

EXPORTS - 125,000

Consumption expenditure - 312,000

Investment - 150,000

Government spending - 208,000

Imports - 105,000

Depreciation - 5,000

Net indirect taxes - 25,000

Given that the country has a population of 30 million people,

i) Calculate the GNP per capita of the country. 4mks

ii) Outline FOUR limitations of using GNP per capita in measuring the standards of living in a country. 8mks

b) Explain FOUR services offered by wholesalers to producers. 8mks

6. a)Discuss FIVE functions of the central Bank. 10mks

b)Highlight FIVE factors that have contributed to the continued popularity of postal service in Kenya.