Important

Question 1

difference between IMF and central bank

Answer 1

Their approaches to achieving this shared goal are complementary: the IMF focuses on macroeconomic and financial stability while the World Bank concentrates on long-term economic development and poverty reduction.

Question 2

Income elasticity

Answer 2

= percentage change in QD/Percentage change in income
for goods between 0 and 1 it is a necessity, more than 1 is a luxury

Question 3

Elastic properties

Answer 3

0-1 is inelastic
1 is unity
more than 1 is elastic

Question 4

Percentage calcualtion

Answer 4

Old-new/Old

Question 5

elasticity calculation

Answer 5

PED
percentage change in QD/ percentage change in price
PES
percentage change in QS/ percentage change in price
Both are always positive values

Question 6

Unemployment

Answer 6

4 types: seasonal, frictional, structural and cyclical
cyclical: can be shown in macro AD graph and business cycle - unemployment from economic contraction
structural unemployment: Unemployed because of -
1) Mismatch in skills (labourers are not demanding their experience/education)
2)geographical immobility (cannot move to job opportunities)
3) labour market rigidity - e.g. minimum wage. (micro graph)
1 and 2 can be graphed with labour diagram - important to show that there is a surplus of labour because wages are not sticky - due to worker motivation, contracts etc.

frictional: those who are either in between jobs or waiting to take their first job (no graph) (college kids)
seasonal: Jobless as they only have jobs in particular seasons (no graph)