Answer to Question #247254 in Macroeconomics for shon

Question

Describe the reaction of NPK and full employment if the following events occur in the Bahamas.)

a. The deportation of all illegal migrants from around the Bahamas.

b. The Moody’s report on direct foreign investment and consumer confidence.

c. The implementation of payment for the travel visa and Covid-19 testing

Question 2.

The FNM government prior to the 2021 general election, introduced a school lunch program that covered all public-school children. Assume that this program is temporary and only lasted eight months. For a constant level of output, what impact would this program have on desire consumption and desire national saving.

Answer 1

Solution:

Question 1:

a.). The deportation of illegal migrant from around the Bahamas will greatly reduce national employment since the majority of industries especially agriculture depends on immigrants for labor. Therefore, full employment will be greatly affected since the economy will not be able to attain full employment.

 

b.). Moody’s report on direct foreign investment and consumer confidence will boost the economy and increase GDP. Therefore, the economy will move towards full employment.

c.). The implementation of payment for the travel visa and Covid-19 testing will discourage many immigrants seeking work in the Bahamas to stop coming. This will negatively impact the national employment levels and lower full employment.

 

Question 2:

The impact of this program would be devastating on desire consumption and desire national saving. Households will be forced to reduce their desired consumption and savings since the funds that were being used will now be used to meet lunch expenses. Individuals' disposable income will greatly be reduced, hence affecting their ability to spend on more consumption and save.