1. There are 4 different types of unemployment. State how the following would be classified-
i) Unemployment of unskilled workers from declining industries
ii) Unemployment which results from the closure of ski resorts during summertime
iii) Unemployment stemming from a decline in world GDP
iv) Unemployment resulting from high wage demands by the labour union
2. Aggregated demand and supply analysis
You are in an economy where consumption is given by the following function
C = 65 + 0.8Y
The economy has no government expenditure and does not have any foreign trade at present but it does have investment expenditure, which is constant at €150.
a) Complete the following table
|
Income
|
0
|
100
|
200
|
|
Consumption
|
|
|
|
b) Determine the equilibrium level graphically.
c) Calculate the equilibrium level of income.
3. Regulation of the banking system
A) Explain the different possible types of regulation
B) Discuss reasons why regulation may fail.
4. Why is the multiplier higher for investments than for Government expenditure? Explain.