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Draw an appropriate diagram to show how a change in disposable income is likely to impact on aggregate planned expenditure.
The predicted sharp rise in consumer spending is attributed by economists to lower planned. Using a consumption function diagram illustrate the expected effect.
What is 'fiscal drag'? How might its economic effects be neutralised? What do you understand by the term 'crowding-out' and when is it likely to most prevalent?
What do you understand by the term money supply? Giving examples from your own country, distinguish between narrow money and broad money.
Draw a graph showing how these monetary aggregates have fluctuated over the last five years.
Explain using an appropriate diagram how changes in the money supply may affect interest rates. Outline the role of money in macroeconomic policy.
What monetary measures might a central bank use to control the money supply?
How might changes in short-term interest rates affect the rate of monetary growth in an economy?
Under what conditions will the growth in the money supply have an equal proportionate effect on an economy's price level?
What are the main distinguishing features of the classical, neoclassical and endogen-ous growth models? What does each imply for economic policy?
How might labour markets be made more flexible in your country or state?
What is the case for having an effective national competition policy? What is the economic argument for deregulation?
Why might privatisation improve economic performance? Why both aggregate demand and supply be considered when for-mulating government macroeconomic policy?
Using appropriate diagrams compare and contrast cost-push and demand-pull inflation.
Why did economists tend to become more cautious about the benefits of Keynesian fine-tuning of the economy from the mid-1970s?
What is the relationship between fiscal changes and the multiplier effect? Why does a balanced budget tend to stimulate the economy?
How is the USA able to sustain this position? What problems (if any) does this situation pose for: (i) the USA? (ii) the rest of the world?
A developing country operates a trade deficit because of large imports of capital equipment. Explain how this country might sustain this deficit over time.
What do you understand by the term beggar-my-neigh bour policies in the context of international trade? Provide examples of this practice.
Your country has decided to protect temporarily a major industry that is declining in the face. Discuss the relative merits of using quotas or tariffs.
Some Japanese electronics companies claim that Chinese-produced TVs are destroying Japan's domestic TV. What would be your advice to the Japanese government?
Identify which goods both countries should specialise in producing and the relevant terms of trade, assuming constant cost production.
In the light of the law of comparative advantage, how would you expect production and trade in China to alter over the coming years and why?
How might this difference in the rate of unemployment be explained? What dilemma does the differ-ence create for government?
All unemployment is voluntary. Discuss the economic basis for this assertion. If people prefer leisure to working, should this be of any concern to government?