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Country XYZ is facing a problem of high levels of unemployment. Explain five measures that the government may take to address this problem. (10 marks)November 2022
Increase government spending on infrastructure projects: This would create jobs in the construction and manufacturing industries, and stimulate economic growth. Implement tax incentives for businesses: This could encourage companies to invest in new projects and hire more employees. Increase fundingRead more
Explain five monetary measures that a government may take to control the level of inflation in an economy. (10 marks)November 2022
Inflation is an increase in the overall price level of goods and services in an economy. A government may take several monetary measures to control the level of inflation in an economy, such as: Interest rate policy: A government can control inflation by manipulating the interest rate through its ceRead more
Inflation is an increase in the overall price level of goods and services in an economy. A government may take several monetary measures to control the level of inflation in an economy, such as:
Most developing countries rely heavily on borrowing to finance their development budgets. Explain five reasons for such reliance. (10 marks)November 2022
Developing countries often rely heavily on borrowing to finance their development budgets for a variety of reasons: Limited domestic resources: Developing countries typically have limited domestic resources, such as savings and investment, to finance development projects. Borrowing allows them to acRead more
Developing countries often rely heavily on borrowing to finance their development budgets for a variety of reasons:
Explain five factors that may limit credit creation in an economy. (10 marks)November 2022
Credit creation refers to the process by which banks and other financial institutions create new money by issuing loans and other forms of credit. However, there are several factors that may limit credit creation in an economy, these include: Reserve requirements: Banks are typically required to holRead more
Credit creation refers to the process by which banks and other financial institutions create new money by issuing loans and other forms of credit. However, there are several factors that may limit credit creation in an economy, these include:
Explain five benefits that may accrue to a firm from operating in large scale. (10 marks)November 2022
Economies of scale: As a firm increases its production, it can benefit from economies of scale, which refer to the cost advantages that a firm can achieve by producing goods or services in large quantities. These can include lower costs for raw materials, labor, and capital. Increased market power:Read more
Explain five factors that may influence the supply of labour in an economy. (10 marks)November 2022
The supply of labour in an economy refers to the number of people willing and able to work in a given period of time. There are several factors that can influence the supply of labour in an economy, including: Demographics: The size and age distribution of the population can affect the supply of labRead more
The supply of labour in an economy refers to the number of people willing and able to work in a given period of time. There are several factors that can influence the supply of labour in an economy, including:
Explain six circumstances under which price controls may be justified in an economy. (12 marks)November 2022
Price controls are government-imposed limits on the price of goods and services. There are certain circumstances under which price controls may be justified in an economy. Some of these include: Market failure: Price controls may be used to address market failures, such as when prices become too higRead more
Price controls are government-imposed limits on the price of goods and services. There are certain circumstances under which price controls may be justified in an economy. Some of these include:
Explain four assumptions implied in the law of supply. (8 marks)November 2022
The law of supply states that, all other things being equal, as the price of a good or service increases, the quantity supplied will also increase. The following are some of the assumptions implied in the law of supply: Constant technology: The law of supply assumes that the technology used to produRead more
The law of supply states that, all other things being equal, as the price of a good or service increases, the quantity supplied will also increase. The following are some of the assumptions implied in the law of supply:
Explain six factors that may lead to an increase in demand for commodities in a market. (12 marks)November 2022
There are several factors that can lead to an increase in demand for commodities in a market. Some of the most important include: Population growth: As the population increases, so does the demand for goods and services. This can lead to an increase in demand for commodities, as more people need toRead more
There are several factors that can lead to an increase in demand for commodities in a market. Some of the most important include:
Explain four differences between micro-economics and macro-economics.(8 marks)November 2022
Microeconomics is the study of individual economic behavior, such as that of consumers, firms, and markets. It examines how these actors make decisions and how they interact with one another in specific markets. Microeconomics is concerned with understanding the behavior of individual agents such asRead more
Microeconomics is the study of individual economic behavior, such as that of consumers, firms, and markets. It examines how these actors make decisions and how they interact with one another in specific markets. Microeconomics is concerned with understanding the behavior of individual agents such as households and firms, and how they interact in markets.
Macroeconomics, on the other hand, is the study of the economy as a whole. It examines aggregate economic phenomena such as gross domestic product (GDP), inflation, and unemployment. Macroeconomics is concerned with the economy as a whole, and with the large-scale phenomena that affect it. It looks at issues such as growth, inflation, and unemployment.
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