Economics for Islamic Finance

Preparatory Questions- Jan 2019

1. Using examples, explain why changes in macroeconomic environment is important for

managerial decision making.
2. How can ethics be relevant to economics especially Islamic economics?
3. What are the factors that cause markets to fail?
4. Using examples illustrate the policy measures that can be taken to mitigate the various types
of market failures. What would be the possible negative effects of such policies?
5. How do manufacturing firms decides on level of production? What are the factors that affect
the supply and demand functions of e hailing service?
6. Show how technology can add value to the firm besides lowering cost of production. Illustrate
with examples
7. Why is important for management to understand economic profits and accounting profits?
8. Using the prisoner’s dilemma model, show why oligopoly firms end up with sub optimal
outcomes. Illustrate with examples.
9. Show how cartels are formed and output distributed between the producing players.
10. Why is it difficult to prevent cheating in a cartel?
11. How can cheating be minimised in a cartel?
12. Explain the relevance of prisoners dilemma in economics? Illustrate with examples.
13. “In a perfectly competitive market, the long run supply curve has an elasticity of infinity.”
Discuss the validity of this statement.
14. How is demand for factor of production such as labour different from the demand for goods
and services by consumers? Explain your answer.
15. What do you understand by the term total factor productivity?
16. Explain how productivity is linked to employment
17. Define ‘rationality as self- interest maximization and explain how rationality guides economic
agents solve key economic problems of what to produce, how to produce and for whom to
produce.
18. What are the strengths and limitations of self -interest maximization as a key assumption in
explaining observed human behaviour and decision making?
19. Explain how differently economic growth, economic development and human development can
enhance the power of economics in promoting efficiency, equity and social well-being.
20. “Contestable markets are always good for growth and development”. Do you agree? Justify
your answer
21. Distinguish between demand side and supply side economics.
22. Explain the following macroeconomic situations and illustrate the use of policy mix in
managing them:
(a) Stagflation
(b) Deflation
(c) Overheating
(d) Recession
23. Describe the balanced budget multiplier model for an open economy and explain the
conditions that must be in place for the multiplier to achieve maximum impact.
24. Explain the causal relationship between an increase in budget deficit and the following:
(a) Output, employment and general price level
(b) Balance of current account
(c) Interest rates
25. What is fiscal discipline and how does it contribute to economic growth and development?
26. Explain why different states of economic health require different mix of policies
27. What are the limitations of a market economy from the point of view of distribution and social
justice?
28. How can these inequalities be corrected using market tools and policies?
29. Can a perfectly functioning market economy contribute to economic growth with prosperity
and social justice?

Syed Abd Hamid Aljunid

7/4/19
 Preparatory Questions- Jan 2019
ISLAMIC ECONOMICS: ECONOMICS FOR ISLAMIC FINANCE

Question 1
Discuss the economizing problem with reference to the following showing in details the Islamic view on
each and their economic impact in the different societies
i. Scarcity of resources,
ii. Unlimited wants and;
iii. Choice

Question 2
Discuss how economic systems are viewed from the capitalistic, socialistic and Islamic perspectives
showing their impact in the different societies with reference to:
i. Ownership,
ii. Motivation,
iii. Role of government and
iv. Implementation

Question 3
i. Explain the relation between ethics and economics with reference to
the following; self-interest, rational behavior, public-interest from
Islamic and secular perspectives
ii. For each discuss their economic impacts on both societies.

Question 4
i. What do you understand by secular and Islamic worldviews within the
context of economics?
ii. Who is the khalifah and what is his role in economic development?
iv. Explain why Islamic worldview will lead to a more just and equitable society.
v. Explain what do you understand by Maslah and Maqasid al shariah
Question 5
i. What do you understand by distribution and redistribution of wealth in Islam?
ii. Discuss producers’ and consumers’ behaviors in the process of distribution and re-distribution of wealth
showing how a just society can be acheived.

Question 6
i. What do you understand by qard-hassan loan?
ii. Why do you think Islamic banks today are reluctant to provide qard-hassan?
iii. Explain and illustrate with the help of socio financial institutions how to encourage Islamic banks to
provide qard hassan to the hard core poor and needy.

Question 7
i. Compare and contrast money from both secular and Islamic perspectives.
ii. What are the main causes of the current financial crisis explain in detail?
iii.Show how these can be solved from Islamic perspective

Question 8
i. How does gold backing for money help to overcome the adverse effects of money on Human
wellbeing?
ii. View the Role of Golden Dinar as a Monetary Standard in the development of Muslim countries
iii. Discuss the relevance and the role of time value of money in Islamic economics with particular to
Islamic finance.

Question 9
i. What is inflation?
ii. What are the main caused of inflation and how to overcome inflation, secular and Islamic
perspectives? And why printing money will not help in this regards

Question 10
i. What do you understand by the institution of zakah?
 ii. Give your justification why the state has to be handled its management?
iii. Show how zakah managed to eradicate poverty during S. Umar ibn al Khatab and Uman ibn Abdel
Aziz?
iv. Which policy can be adopt so that zakah can alleviate poverty reduces inequality and eliminate riba
from Muslim societies, explain in detail?

Question 11
i. What do you understand by the institution of waqf?
ii. Explain the importance of creating public and family waqfs:
iii. Movable and immovable waqfs?
iv. How can banks help the development of idle waqf properties?
v. With the help of diagrams explain and provide examples for
- Direct and indirect cash waqf models,
- Corporate waqf models,
- Mutual cash waqf model

Question 12
Show how zakah and waqf institutions can be revived so that they will have great impact towards
provide the following, explain in detail:
i. Job creation
ii. Affordable housing
iii. Microfinancing
iv. Poverty eradication
v. Stabilizing the economy

Question 13
i. What do you understand by riba and how it harm societies?
ii. Explain the Islamic way in eliminating riba from societies.
iii. Discuss, providing cases, show how this can be implemented at the present time.

Question 14
i. List at list 6 goals for sustainable development goals as provided by the World Bank for the next 15
years i.e. until 2030 and explain them.
ii. Elaborate on how Islamic finance can help in achieving these sustainable development goals within
shorter duration, providing examples.
iii. Using illustrative diagrams, explain the impact of tax, zakah and waqf on the prices of essential
goods showing their good and bad impacts on stabilizing the economy.

Question 15

i. What do you understand by Monetary & Fiscal Policies?

ii. Types and objective of Monetary & fiscal policies?
iii. Roles of Monetary & Fiscal Policies in the economy

Question 16

i. What is inflation? Its types and its causes?

ii. How it affects the living standers of people?
iii. How governments can control inflation?

Question 17

i. What do you understand by financial institution highlighting its/their role(s) in the economy?
ii. Explain showing the social responsibility of the financial institutions?
iii. What do you understand by financial inclusion?

Magda Ismail A. Mohsin

10.4.2019

Wishing you all the best