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IMA612S-INTERMEDIATE MACROECONOMICS-1ST OPP-NOV 2025 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnDLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION : BACHELOR OF ECONONOMICS
QUALIFICATION CODE: 07BECO
LEVEL: 7
COURSE CODE: IMA612S
COURSE NAME: INTERMEDIATE
MACROECONOMICS
SESSION: NOVEMBER 2025
DURATION: 3 HOURS
PAPER: THEORY (PAPER 1)
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S) Mr. Eslon Ngeendepi
MODERATOR: Mr. Pinehas Nangula
INSTRUCTIONS
1. Answer ALL the questions.
2. Read all the questions carefully before answering.
3. Number the answers clearly
THIS QUESTION PAPER CONSISTS OF_4_ PAGES (Including this front page)
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QUESTION 1
[20 Marks]
1.1 Using the table below which shows the total output for the Namibian economy
over 2 years, calculate:
a) Nominal GDP for 2024.
(4)
b) Real GDP for 2024 using, 2023 as the base year.
(3)
c) Economic growth from 2023 to 2024.
(3)
Year
2023
2024
Item
Ice cream
Waffle cones
cherries
Ice cream
Waffle cones
cherries
Price
N$4.00
N$2.00
N$0.75
N$4.25
N$2.50
N$1.00
Quantity
400 units
200 units
100 units
500 units
300 units
50 units
1.2
i. Calculate the GDP deflator for each year in the table below.
(6)
Year
2022
2023
2024
Nominal GDP
(billions)
864.5
882.6
923.4
Real GDP (billions) GDP deflator
845.5
a)
851.9
b)
875.1
c)
ii. What is the rate of inflation from 2022 to 2024?
(4)
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QUESTION 2
[25 Marks]
Consider an open economy with induced taxes and induced imports. The behavioural
equations are:
Consumption: C0 + c(Yd - T)
Taxes: T = T0 + tY
Import: M = M0 + mY
Investment: I = 10 (autonomous)
Government expenditure G and exports X are autonomous.
Given the following numerical values:
C0 = 50, c = 0.80, T0 = 20, t = 0.20, /0 = 40, G = 30, X = 25, M0 = 10 and m = 0.15
a) Derive the equilibrium income (Y} algebraically and calculate its numerical
value.
(10)
b) Derive the saving function using numerical values.
(5)
c) Derive the multiplier for this economy and compute its numerical value (show
steps).
(10)
QUESTION 3
[25 Marks]
3.1 A transport company is considering buying a small truck with a life span of
two years.
• The van is expected to generate cash inflows of N$500 at the end of each year.
• The purchase price today is N$850.
• The interest rate is 12 % per year.
a) Compute the present value (PV) of the expected cash inflows.
(5)
b) Compare the PV with the purchase price and state whether the investment is
profitable or not.
(5)
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3.2
a) In year t - 1, the national income was N$1,200, and in year, t, it increased to
N$1,300. If the capital-output ratio (v) is 0.4, use the accelerator theory to
calculate the level of net investment.
(5)
b) Following on question (a) above, assume ·annual depreciation is N$1,000.
Calculate the gross investment for the period.
(5)
c) Given Net Investment of N$250, and income rose from N$500 in year t-1, to
N$1000 in year, t. Derive the accelerator coefficient.
(5)
QUESTION 4
[15 Marks]
The goods and money markets of a small open economy are represented by the IS and
LM equations below:
Where:
IS curve (goods market): Y = 1200 - 20r
LM curve (money market): Y = 400 + 30r
Y=national income (in millions of dollars) and
r= interest rate (in percent).
a) Derive the equilibrium values of income and the interest rate. Show all steps. (8)
b) Suppose government spending rises so that the new IS curve becomes
= Y 1300 - 20r.Calculate the new equilibrium income and interest rate and
briefly explain the economic intuition behind the changes.
(7)
QUESTION 5
[15 Marks]
Explain W.W. Rostow's five stages of economic development. In your answer clearly
describe the main features of each stage and show how an economy progresses from
one stage to the next.
(15)
TOTAL MARKS: 100
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