Problem 1. How it is possible for a country to have low inflation, high unemployment rates, and an expanding economy all at the same time. What causes this to happen and as a portfolio manager, what trading strategies could you implement to protect your interest and why you would or would not expect to make a profit. Use graphs and other information to support your answer, where possible.
Problem 2. If income elasticity of demand for 14-day and 3-day advance train tickets is 3 and 1.5 respectively, what effect would a high unemployment rate have on the train industry and the economy. Use graphs and other information to support your answer, where possible.
Problem 3. If price level is unchanged, what effect will a monetary policy that is contractionary have on the real income level and private placement balance of a country. Use graphs and other information to support your answer, where possible.