21 Which of the following is best suited to reducing the level of structural unemployment? A Lowering the rate of interest. B Raising the rate of unemployment benefit. C Higher voluntary redundancy payments for workers in declining industries. D More government funds for retraining of the unemployed. May I know why B is not accepted for this question ?
24 Country A exports Good X and imports Good Y from Country B. The price of Good X rises by 20 per cent and the price of Good Y falls by 40 per cent. Which of the following statements is correct about Country A’s terms of trade? A It has improved by 100 per cent. B It has improved by 60 per cent. C It has deteriorated by 100 per cent. D It has deteriorated by 60 per cent. May I know why the answer is A?
19 In a closed economy with no government sector if the amount people plan to save exceeds the amount they plan to invest then there will be: A a rise in national income. B an unplanned rise in stocks. C inflationary pressures. D a rise in the amount people plan to invest. Can i get more elaboration on why the answer is B?
33 The following data refers to a simple closed economy. Money Supply = 200 Price Index = 10 Real Output (i.e. Real Income) = 100 units Bank multiplier = 20% Use the equation of exchange to determine the following with the above figures as your starting point in each of your calculations: (i) the numerical value of the velocity of circulation. [1] (ii) the value of the price index if the money supply were to increase to 300. [1] (iii) the likely change in the money supply if there is an initial increase in bank deposits of 15. May I know why ii is 15 and iii is 75?
