Question 1:
Using appropriate diagrams, describe the optimal provision of a private good and a public good.
Question 2:
Using appropriate diagram, show how there is an efficiency cost of distortion when government imposes a tax on a product.
(a) Differentiate between absolute and relative poverty.
(b) Distinguish between contingent benefits, means test benefits, and workfare benefits.
Question 3:
Using appropriate diagram, show the effects of a balanced budget multiplier.
Question 4:
Describe the main motives for holding money.
Question 5:
Using the IS-LM model, show the effects of:
(a) an increase in government expenditure.
(b) an increase in money supply.