Examiner’s Report
CPA 2 - ECONOMICS AND ENTREPRENUERSHIP
1.0 GENERAL COMMENTS
1.1
General Performance
A total of 96 candidates sat the paper. The performance improved from 56.52% in
December 2022 to 68.75% in June 2023.
2.0
PERFORMANCE IN INDIVIDUAL QUESTIONS
2.1 Section A: Question 1
This had 20 multiple choice questions and was compulsory with each question carrying one
mark. The questions were drawn from all topics to ensure wider coverage of the syllabus.
2.2
Section B: ECONOMICS
2.2.1 Question 2:
This question required candidates to
(a)
Explain the effects of the existing high levels of inflation on the people and
government of Uganda.
(b) Explain the relationship between inflation and unemployment in an economy.
(c) Distinguish between price and cross elasticity of supply.
(d) Explain any three degrees of elasticity of supply.
 Part (a) of the question was attempted by very few candidates and those who
attempted the question largely ignored the key word “high levels” of inflation. The
students instead gave the general effects rather than the negative effects of
inflation on the people and government of Uganda. High inflation only has negative
effects. Students need to read carefully the questions before attempting to answer
 Part (b) of the question was done by many candidates though they could not relate
how inflation and unemployment influence each other. Candidates gave the causes
of each of these concepts which accounts for the low marks.
 In part (c) of the question, Candidates failed to differentiate between cross
elasticity of and price elasticity of supply. This requires the students to master the
economic definitions so as to always ably apply them.
 In part (d) of the question, candidates were unable to explain the degrees of
elasticity of supply. Most of the students confused the elasticities of demand with
the elasticities of supply. It is recommended that candidates master the background
topics of the syllabus.
2.2.2 Question 3
This question required candidates to:
(a)
Explain why how and why people evade tax payments in an economy.
(b)
Examine the impact of Uganda’s tax structure on the economy.
Page 1 of 4
Examiner’s Report
(c)
Discuss the measures that can be taken to promote commercialisation of agriculture
in Uganda.
 Part (a) was well done by many candidates who attempted it. They were able to
give most of the required points and this boosted their scores. This showed that
most students have adequate information about tax evasion in Uganda.
 In part (b) of the question, majority of the candidates were not able to explain the
impact of the tax structure on the economy and only gave the effects of taxes on
an economy. Candidates need to read widely and get to know the different elements
of structure of taxation in an economy.
 Part (c) was well done by many candidates who were able to discuss the measures
that can be taken to promote commercialisation of agriculture in Uganda.
2.2.3 Question 4
This question required candidates to:
(a)
Examine the factors that led to the failure of privatisation policy in developing
countries like Uganda.
(b)
Discuss the negative impact of trade Liberalisation on the economy of Uganda.
(c)
Explain the importance of profits in an economy.



For Part (a), some candidates failed to explain the factors that led to the failure of
the privatisation policy and instead gave the problems of private enterprises.
Candidates should read about the different policies under implementation in the
world and also be in the know of the Structural Adjustment Programs.
Part (b) was not well done by the candidates because of not paying attention to the
key word ”negative impact” but concentrated on the positive effects of trade
liberalisation.
Part (c) was done well as candidates gave the importance of profits in an economy.
This indicates that they know the factors of production and their respective rewards.
2.2.4 Question 5
The question tested the candidates’ knowledge and understanding of evaluating business
ventures, business growth and intellectual property of a business. Specifically, the question
required candidates to:
Explain the:
(a) Factors that an entrepreneur should consider when evaluating a business venture.
(b) Different forms of business growth.
(c) Different ways in which an entrepreneur protects intellectual property of the
business.
Observation:
 Part (a) was well done. Majority of the candidates were able to raise the required
number of points which implies that they ably understood the factors considered in
evaluating a business.
Page 2 of 4
Examiner’s Report

Part (b) was poorly done. Most of the candidates failed to present forms of business
growth such as mergers, joint ventures, acquisitions and the like. Instead, they were
giving indicators of business growth such as increasing number of employees,
creating other branches etc. which negatively affected their scores.

Part (c) was poorly done, as majority of the candidates failed to correctly interpret
the question. Most of them were giving ways of protecting physical assets of the
business such as installation of CCTVs, employing security guards, fencing, and so
on. The question required elements such as obtaining patent rights, registering
trademarks, keeping trade secrets and the like to protect intellectual property.
2.2.5 Question 6
The question tested the candidates’ knowledge and understanding of the sources of
capital, business success and creativity. Specifically, candidates were required to:
(a) Identify the external sources of capital available to entrepreneurs.
(b) Describe the;
(i)
Factors for a successful business venture.
(ii)
Limitations to creativity in a business.
Observation:
 Part (a) was averagely done. Many candidates who attempted the question ignored
the key word in the question (external sources of capital). Instead, they gave
different sources of capital and so ended up mixing the internal with external
sources. Points like “sale of assets”, “personal savings”, were common yet these
are basically internal sources.

Part (b) (i) was well done. Majority of the candidates ably discussed the factors
considered for successful business ventures.

However, part (b) (ii) was poorly done. Majority of the candidates seemed to be less
knowledgeable about limitations of creativity and therefore ended up giving
unrelated points such as limited capital, poor government policy, political
instability, low levels of education and the like. This led to low scores.
2.2.6 Question 7
The question aimed at testing the candidates’ knowledge on entrepreneurial process,
managing growth and transition in a business as well as globalisation and in particular, the
question required candidates to:
Advise on:
(a)
Entrepreneurial process
(b)
Strategies for managing growth and transition in a business venture.
(c)
Advantages of globalisation.
Observation:
 Part (a) was poorly done. Majority of the candidates failed to present the
stages sequentially to constitute a process as required but mixed them up
and this made them score low marks
 Part (b) was equally done poorly as most candidates failed to raise enough
points on strategies for managing business growth.
Page 3 of 4
Examiner’s Report

Part (c) was fairly done. Majority of the candidates understood the concept
of globalization the only challenge being few points given which lowered the
scores.
Recommendation:
 Candidates are advised to note carefully the questions that require stages or
a process and endeavour to present the right steps as required without mixing
them.
 Candidates are further advised to always give enough points as per the marks
allocated per question.
Page 4 of 4