revision section

1. BUSINESS REVISION FORM 4 2023
CHAPTER 1
1. Discuss public finance.
Is the study of how governments collect revenues through taxation and
other methods and how they spend that revenue on public services.
2. Explain the importance of public finance.
 Steady state of economic growth
 to achieve sustainable high economic growth rate.
3. Explain the uses of budget.
 Budgets show you what you have to spend
 Budgeting helps you to meet short and long term goals
4. Discuss why lack of budget may cause government failure.
 Lack of transparency
 Limited budgets
5. Discuss causes of a budget deficit.
Excessive government spending and low levels of taxation that don’t
cover expenditure.
6. Explain taxation.
Taxation is the system of collecting income by the government in the
form of compulsory payments made by the citizens of a country
7. Explain import tariff.
Are taxes charged by the customs authority on the importation of
goods into a country.

2. CHAPTER 2
1. What is meant by equilibrium?
Is a situation in which forces of supply and demand are balanced.
2. calculate the price of elasticity of supply given p1=16, p2=.20,
q1=24, q2= 11.
Solution
Es=% Qs
% p
% Qs= Q2-Q1
Q1
=11-24
24
_ 0.54
% p = p2-p1
P1
=20-16
16
=0.25
Es= % Qs
% p
= -0.54
0.25
= -2.16
3. Explain how shortage occurs.
Shortage occurs when the quantity demanded exceeds the quantity
supplied.
4. Explain the oligopoly market and list its characteristics.
Oligopoly is a market structure where few firms dominate the market
supply of a particular good or service.
The characteristics of oligopoly are:

3. High barriers to new entry.
Price setting ability.
The interdependency of firms.
5. How do the market of the milk act in prosperous times after rains?
We decrease the prices of the milk and the supply increases.
6. Why there are no barriers in a perfect competition market?
Market share has no influence in prices.
7. In your locality are there duopoly firms?
No
CHAPTER 3
1. define money.
Is a commodity accepted as the medium of exchange for goods and
services and repayment for debts.
2. explain the main forms of money.
Commodity money (materials)
Metallic money (precious metals)
Flat money (paper money)
3. discuss the functionsof money in an economy.
Unit of account
Store of value
Medium of exchange

4. Standard for deferred payments.
4. describe the characteristics of money.
Scarcity
Durability
Divisibility
Uniformity
portability
5. discuss the main types of banks.
Commercial banks(are financial institution that accept deposits and
offer loans to the general public)
Central bank(is the highest financial institution in the country)
6. discuss the functions of commercial banks.
Accept deposits
Credit creation
Providing loans
Transfer services
Financial services
7. Explain the functions of the central bank of somalia.
Issuing and controlling currency
Be the lender of the last resort
Controlling inflation

5. Be the government banker
8. discuss why Islamic banking has become the trend nowadays .
Due to its transparency
Safer other banks
Interest free offering
Expanding customer demand
9. explain the problems of interest bearing loans.
Unpayable debts repeatedly occur
Slow growing economies.
10.Deferentiate between commercial banks and non banking financial
institutions.
Commercial banks are financial institutions that accept deposits and
offer loans to the general public.
Non banking financial institutions do not have commercial bank
licenses and can provide deposit services.
11.define Islamic banking system.
Is a banking system consistent with Islamic law.
12. Why do many people prefer Islamic banks compared to
conventional ones?
Because Islamic banking system is free from interest.
13. explain three products of Islamic banks.
Murabaha

6. Ijarah
Mudarabah
14.explain two deposit schemes available in Islamic banks.
Current accounts
Saving accounts
15. Describe four principles of Islamic banks.
Ijarah
Murabaha
Musharah
mudarabah