Economics notes – KNEC Diploma

Economics notes

• KNEC: Diploma in Business Management – Module I

• KNEC: Diploma in Human Resource Management – Module I

• KNEC: Diploma in Supply Chain Management – Module I

• KNEC: Diploma in Sales and Marketing – Module I

Topics covered are:

Topic 1: Introduction to economics
Topic 2: Demand analysis
Topic 3: Supply analysis
Topic 4: Price determination
Topic 5: Production theory
Topic 6: Theory of the firm
Topic 7: Market structures
Topic 8: National income
Topic 9: Money and banking
Topic 10: Public finance
Topic 11: Inflation
Topic 12: International trade
Topic 13: Population and unemployment
Topic 14: Economic growth and development
Topic 15: Emerging trends and issues in economics

Introduction
This module unit is intended to equip the trainee with knowledge, skills and attitudes that will enable him/her apply the economic concepts in day to day life

General Objectives

At the end of this module unit, the trainee should be able to:

1. Recognize the role of economics in day to day life
2. Apply the concept of demand and supply in economic analysis
3. Demonstrate an understanding of price determination
4. Apply production theory concept in a financial institution
5. Demonstrate an understanding of market structures
6. Relate the concept of money and banking to banking and financial services business environment
7. Demonstrate an understanding of public finance concept
8. Assess the relationship of population and unemployment in a economy
9. Cope with emerging issues and trends in economics.

Topic 1: Introduction to Economics

• Meaning of economics
• Scope of economics
• Human wants
• Economic resources
• Concept of scarcity and choice
• Economic systems

Topic 2: Demand Analysis

• Concept of demand
• Factors affecting demand of a product
• Demand curve derivation
• Shift and movement along a demand curve
• Definition of elasticity of demand
• Types of elasticity of demand

Topic 3: Supply Analysis

• Concept of supply
• Factors affecting supply of a product
• Supply curve derivation
• Shift and movement along the supply curve
• Elasticity of supply
• Types of elasticity of supply

Topic 4: Price Determination

• Definition of price
• Determination of price
• Equilibrium position in the market

Topic 5: Production Theory

• Production concept
• Purpose of production
• Factors of production and their rewards
• Levels of production
• Law of diminishing returns

Topic 6: Theory of the Firm

• Distinction between firm and industry
• Costs of production
• Concept of Revenue
• Economies and diseconomies of scale
• Factors affecting location of an industry
• Optimal size of a firm

Topic 7: Market Structures

• Definition of market
• Types of market structures
• Needs for control of power in market structures
• Ways of controlling powers in different market structures

Topic 8: National Income

• Definition of national income
• Concepts of national income
• Circular flow of national income
• Methods of measuring national income
• Importance of national income statistics
• Factors affecting national income
• Causes of income disparities
• National income equilibrium

Topic 9: Money and Banking

• Definition of money
• Characteristics of money
• Functions of money
• Demand and supply of money
• Meaning of banking
• Functions of commercial banks
• Functions of central bank
• Non-banking financial institutions

Topic 10: Public Finance      

• Definition of public finance
• Principle of public finance
• Effects of government expenditure
• Sources of government revenue
• Purpose of taxation
• Principles of taxation
• Types of taxes
• Meaning of fiscal policy
• National budget
• Public debt/borrowing

Topic 11: Inflation

• Definition of inflation
• Types of inflation
• Causes of inflation
• Effects of inflation
• Measures used to control inflation

Topic 12: International Trade

• Definition of international trade
• Importance of international trade
• Advantages and disadvantages of international trade
• Theories of comparative advantage and absolute advantage
• Balance of trade
• Balance of payment
• Barriers to international trade
• Exchange rate systems
• Economic integration/regional groupings
• Functions of international monetary fund (IMF) and world bank

Topic 13: Population and Unemployment

• Definition of population
• Population growth
• Effects of population growth
• Meaning of unemployment
• Causes of unemployment
• Solutions to unemployment

Topic 14: Economic Growth and Development

• Meaning of economic growth and economic development
• Factors determining growth and development
• Need for development planning

Topic 15: Emerging Trends and Issues in Economics

• Emerging economic trends and issues
• Challenges posed by emerging economic trends and issues
• Approaches to manage emerging economic trends and issues