Consider the following circular flow of income model. In 2017, flow A was Ksh.1,000 billion, flow C was Ksh.250 billion, flow B was Ksh.650 billion, and flow E was Ksh.50 billion. Calculate investment (explain) (5 Marks)
In 2018, flow D was Ksh.2 trillion, flow E was –Ksh.1 trillion, flow A was Ksh.10 trillion, and flow C was Ksh.4 trillion. Calculate consumption expenditure. (4 Marks)

In very poor agricultural countries, many people grow their own food, make their own clothes, and provide services for each other within a family or village group. Do you think official GDP figures will underestimate or overestimate these nation’s actual GDPs? Explain (5 Marks)
“Many people graduate with a bachelor’s degree that doesn’t open jobs doors. Acquiring a skill provides a way of getting a decent paycheck. But acquiring a skill isn’t a one-time event: It is an ongoing process. A skill doesn’t last for decades and retraining is required. Government-funded job training is a promising way to help individual workers, employers and the country as a whole”.

What is the main type of unemployment that retraining programs seek to avoid? Explain. (3 Marks)
How might government funded retraining influence the natural unemployment rate? Explain.