Question 1[7 Marks]

"All societies face the economic problem, which is the problem of how to make the best use of limited, or scarce, resources. The economic problem exists because, although the needs and wants of people are endless, the resources available to satisfy needs and wants are limited."

With reference to the statement above, you are required to carry out a research by selecting one macroeconomic problem faced in your economy and discuss the following:

1. Causes of the macroeconomic problem.
2. Effects of the problem on the economy.
3. Macroeconomic policies that could be implemented by the government to overcome the problem.

Question 2

"Economics is said to begin with Adam Smith in 1776. Prior to that, nobody thought of economics, or markets, as an object of study. It is not that they didn't pay attention to economic matters; it is simply that they didn't think of it in any systematic or coherent manner. The field of macroeconomics is organized into many different schools of thought, with differing views on how the markets and their participants operate."

With reference to the statement above, you are required to research and do the write up on the effectiveness of fiscal policy and monetary policy under the following schools of economic thoughts:

a. Classical economics( 3 marks)

b. Keynesian economics ( 2 marks)

c. Monetarist (2 marks)

Note: Both the question is compulsory and it needs to be tackle separately. Onemark each is allocated for introduction, conclusion and referencing for both the questions.