review week 3 work

Question 1

Ppp

Answer 1

the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country

Question 2

AID

Answer 2

the transfer of resources from one country to another on concessional terms

Question 3

using the classical long run aggregate supply curve explain what will happen in the long run to real output if aggregate demand increases

Answer 3

real output will stay the same as they believe that it is already at max output yf

Question 4

example one likely im[pact of the hs2 rail link on aggregate supply in the uk

Answer 4

there will be an increase in aggregate supply as this will decrease travel times causing a decrease in geograpigicla immobility as it becomes easier to travel to work more viable this causes there to be an increase in to employment therefore an increase in productivity that causes there to be an increase in output

Question 5

what is a tariff

Answer 5

a traiff is a tax imposed on the imports of foreign goods

Question 6

what are the featiures of free trade area

Answer 6

eliminate trade barriers

Question 7

what are the features of custom unions

Answer 7

eliminate trade barriers

common approach to external trade barriers

Question 8

what are the features of a common market

Answer 8

eliminate trade barriers

common approach to external trade barriers

freedom of movement of factors of production

common product standarfds

Question 9

what are the features of a monetary union

Answer 9

eliminate trade barriers

common approach to external trade barriers

freedom of movement of factors of production

common product standarfds

single currency common central bank and interest rates

Question 10

examine two likely benefits for the Rwandan economy of the growth in the country’s population

Answer 10

increase in the size pf workforce
increase in the aggregate supply as a country now has a larger workforce so can produce more

increase in consumption
more consumers creases more demand for firms increase ad and economic growth

increase government tax revenue
more government spending on education/infrasturce

Question 11

what is two limitation of using the HDI

Answer 11

ignores income distribution

ignores other measures such as gender equity

ignores qualitative factors such as quality if education

PPP values change very quickly and are likely to be inaccurate

Question 12

CPI for falling inflation

Answer 12

A household expenditure survey is completed to decide what goes in to the basket of goods this is used to attach weights to products based on proportion of spending.

Question 13

explain the likely effects on the circular flow of a fall in unemployment

Answer 13

unemployment fell resulting in rising consumption and investment and further rounds of increases in disopobale income however household may also spend more on imports

Question 14

With reference to the theory of comparative advantage explain how CETA may increase the GDP of both the EU and Canada

Answer 14

Countries specialise in the goods in which they have a comparative advantage lower opptunrity cost
Application
Countries are now producing/consuming more so this means an increase in GDP

Question 15

Explain the term current account of the balance of payments? and what are the four parts to the current account

Answer 15

Measures total values of exports - total value of imports

What are the four parts to the current account
Trade in goods
Trande in services
Primary income
Secondary income

Question 16

Explain one likely reason why the 2019 budget surplus was abandoned?

Answer 16

Fall in uk economic growth so therefore a fall in growth means that the government may need to support for longer to ensure stable growth

Reduction in uk business confidence, so less business confidence likely to lead to less private sector investment and so government may need to counteract this

Question 17

What are the four parts to the current account

Answer 17

Trade in goods
Trande in services
Primary income
Secondary income

Question 18

Explain on likely reason why consumer demand for banks loans has increased?

Answer 18

Lower increate rates which would make loans more affordable
Increase in consumer confidence so higher consumer confidence encourages consumers to borrow believing they can repay in the future

Question 19

Explain one likely reason for Estonias unit labour cots rising faster than in other European countries?

Answer 19

Lower unemployment in Estonia therefore workers able to negotiate higher pay due to low unemployment

Question 20

Explain one likely reason why global wealth inequality has increased?

Answer 20

Lack of education because poor edu nation means people lack the skills to take on higher paying jobs which could lead to wealth creation

Question 21

Explain the role of the IMF in providing fiancial assistance to counrtries such as Argentina who they bailed out?

Answer 21

Preventing a reccsion, through providing temporary loans in this case in the form of the 75 billion lent. Countries such as Argentina will rely on IMF as it would be too risky for finical markets to lend to them