Economics KNEC Notes – KNEC Syllabus and Course Outline

Introduction to the Module Unit

Economics is a unit offered to diploma students to equip them with the right attitudes, knowledge and skills related to economics; and to apply economic concepts in their day to day lives and professional practices.

General Objectives

By the end of this module unit, the learner should be able to:

• Recognize the role of economics in day to day life
• Apply the concept of demand and supply in economic analysis
• Demonstrate an understanding of price determination
• Apply production theory concept in a financial institution
• Demonstrate an understanding of market structures
• Relate the concept of money and banking to banking and financial services business environment
• Demonstrate an understanding of public finance concept
• Assess the relationship between population and unemployment in an economy
• Cope with emerging issues and trends in economics

Topics/Course Outline Required by KNEC

Topic 1: Introduction to Economics

1.1. Meaning of economics

1.2. Scope of economics

1.3. Human wants

1.4. Economic resources

1.5. Concept of scarcity and choice

1.6. Economic systems

Topic 2: Demand Analysis

2.1. Concept of Demand

2.2. Factors affecting demand of a product

2.3. Demand curve derivation

2.4. Shift and movement along a demand curve

2.5. Definition of elasticity of demand

2.6. Types of elasticity of demand

Topic 3: Supply Analysis

3.1. Concept of Supply

3.2. Factors affecting supply of a product

3.3. Supply curve derivation

3.4. Shift and movement along the supply curve

3.5. Elasticity of Supply

3.6. Types of elasticity of supply

Topic 4: Price Determination

4.1. Definition of price

4.2. Determination of Price

4.3. Equilibrium position in the market

Topic 5: Production Theory

5.1. Production concept

5.2. Purpose of production

5.3. Factors of production and their rewards

5.4. Levels of Production

5.5. Law of diminishing returns

Topic 6: Theory of the Firm

6.1. Distinction between firm and industry

6.2. Costs of production

6.3. Concept of revenue

6.4. Economies and diseconomies of scale

6.5. Factors affecting location of an industry

6.6. Optimal size of a firm

Topic 7: Market Structures

7.1. Definition of market

7.2. Types of market structures

7.3. Needs for control of power in market structures

7.4. Ways of controlling powers in different market structures

Topic 8: National Income

8.1. Definition of national income

8.2. Concepts of national income

8.3. Circular flow of national income

8.4. Methods of measuring national income

8.5. Importance of national income statistics

8.6. Factors affecting national income

8.7. Causes of income disparities

8.8. National income equilibrium

Topic 9: Money and Banking

9.1. Definition of money

9.2. Characteristics of money

9.3. Functions of money

9.4. Demand and supply of money

9.5. Meaning of banking

9.6. Functions of commercial banks

9.7. Functions of central bank

9.8. Non-banking financial institutions

Topic 10: Public Finance

10.1. Definition of public finance

10.2. Principle of public finance

10.3. Effects of government expenditure

10.4. Sources of government revenue

10.5. Purpose of taxation

10.6. Principles of taxes

10.7. Types of taxes

10.8. Meaning of fiscal policy

10.9. National budget

10.10. Public debt/borrowing

Topic 11: Inflation

11.1. Definition of Inflation

11.2. Types of Inflation

11.3. Causes of inflation

11.4. Effects of inflation

11.5. Measures used to control inflation

Topic 12: International Trade

12.1. Definition of international trade

12.2. Importance of international trade

12.3. Advantages and disadvantages of international trade

12.4. Theories of comparative advantage and absolute advantage

12.5. Balance of trade

12.6. Balance of payment

12.7. Barriers to international trade

12.8. Exchange rate systems

12.9. Economic integration/regional groupings

12.10. Functions of international monetary fund (IMF) and World Bank

Topic 13: Population and Unemployment

13.1. Definition of population

13.2. Population growth

13.3. Effects of population growth

13.4. Meaning of unemployment

13.5. Causes of unemployment

13.6. Solutions to unemployment

Topic 14: Economic Growth and Development

14.1. Meaning of economic growth and economic development

14.2. Factors determining growth and development

14.3. Need for development planning

Topic 15: Emerging Trends and Issues in Economics

15.1. Emerging economic trends and issues

15.2. Challenges posed by emerging economic trends and issues

15.3. Approaches to manage emerging economic trends and issues