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The relationship between saving and consumption could be summed up in the predictions of the two popular models of consumption behaviour. Namely the permanent income hypothesis and the life cycle models of consumption. These two models are based on the premises that the motive for saving is to average out consumption over an infinite time horizon. In general both theories predict that consumption is determined by life time resources rather than each period’s income. Discuss the relevance of these two theories for explaining saving and consumption behaviour in developing countries including Africa? (10 marks)
Impact of Traditional economics on banking sector. (Objectives, functions, outcomes, Rules against Islam) ?
Given the money demand function, [M P] a bi Y D ln = − + ln , if b = 1 3 and S = 0.03Y , what rate of
money growth is required to obtain it? How will your answer(s) change when: (a) b = 1 3 and S = 0.05Y
Explain the relationship between seigniorage revenues and the rate of inflation. Als
On 3rd December,2021, the new Dawn government and the IMF mission to Zambia reached a staff level agreement on a programme under the IMF's Extended Credit Facility (ECF) that envisages provision of financial support of $1.4bn over the next three (3) years. Taking into account the anticipated IMF conditionalities, What implications will such an agreement have on the general economy outlook of Zambia? To what extent do you approve or disapprove such an agreement.
Note: your answers should not be more than 2 pages.
Explain how investment(I) in the economy is supported from saving(S) by (i) the private sector (ii) government sector and (iii) current account balance
A labour market has 50,000 people in the labour force. Each month, a fraction p of employed
workers become unemployed (0 < p < 1) and a fraction q of unemployed workers become employed
(0 < q < 1).
(a) What is the steady-state unemployment rate?
(b) Under the steady-state, how many of the 50,000 in the labour force are employed and how many are employed each month? How many of the unemployed become employed each month?
(c) Suppose p = 0.08 and q = 0.32. What is the steady-state unemployment rate and how many workers move from employment to unemployment each month
1. The population of the world in 2003 was 6.314 billion. It grew between 1975 and 2003 at an annual rate of 1.6%. Assume that it continues to grow at this rate. a. Compute the doubling time. b. Estimate the world population in 2048 and 2093 (assuming all other things remain unchanged). 2. With a world population in 2003 of 6.314 billion and a projected population growth rate of 1.1% instead (which is the United Nations’ projection for the period 2003 to 2015). a. Compute the doubling time. b. State the year in which the world’s population would be 12.628 billion. 3. Suppose a country’s population grows at the rate of 2% per year and its output grows at the rate of 3% per year. a. Calculate its rate of growth of per capita output. b. If instead its population grows at 3% per year and its output grows at 2% per year, calculate its rate of growth of per capita output.
Consider the following TR and TC function for a firm operating in a perfect competition
market:
TR = 21Q
TC = 1/3Q3 – 5Q2 + 42Q + 81
A. Determine the profit maximizing or loss minimizing equilibrium level of output?
B. Compute the level of profit or loss at the above equilibrium quantity and comment on
the decision of the firm?
Consider the following TR and TC function for a firm operating in a perfect competition
market:
TR = 21Q
TC = 1/3Q3 – 5Q2 + 42Q + 81
A. Determine the profit maximizing or loss minimizing equilibrium level of output?
B. Compute the level of profit or loss at the above equilibrium quantity and comment on
the decision of the firm?
. Why does productivity matter for living standards? 2. What sort of public policy should Pakistan adopt to ensure growth and improved living standards? 3. What issues may hinder growth and long run living standards in Pakistan? 4. Is Pakistan stuck in a poverty trap? How can we get out of it in the long run? 5. Is Pakistan in a recessionary or growth phase of a business cycle? Justify your answer with reasoning.
