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, is simply determined from a cut-off point in the welfare
distribution, like the income or consumption level below which, a certain per
cent of the population is located.
a) Discuss the 3 types of data used in economics.
Discuss the 3 types of data used in economics.
Consider the following situation for Upland and Downland. Each country half of its resources in Banana and half in Apple.
Apple. Banana
Upland 450 80
Downland 60 60
a. Does the figure represent Absolute or Comparative advantage or both?
b. What is the opportunity cost of apple for each country?
c. By how much will total output increase when the countries ( Download and Upland) specialize.
1. Differentiate between Absolute cost and Comparative cost advantage theories of International trade.
2. Explain reasons why countries engage themselves in trade.
3. Explain the range of trade protection instruments use in Nigeria.
4. Explain the main components of Balance of Payments.
5. Consider the following situation for Upland and Downland. Each country half of its resources in Banana and half in Apple.
Apple Banana
Upland 450 80
Downland 60 60
a. Does the figure represent Absolute or Comparative advantage or both?
b. What is the opportunity cost of apple for each country?
c. By how much will total output increase when the countries ( Download and Upland) specialize.
Suppose that an economy is characterized by the following equations:
C = 400 + 0.75(Y - T)
a = 400 - 25r
G = 200
T = 200
to the private
MS = 2, 000 Derive:
i IS curve
P = 2
(M / P) * d = V - 200r
ii LM curve.
iii Equilibrium level of income and interest rate.
b) Kenya has recently lifted the interest rate cap in a move to revive shrinking cost access
sector. Do you agree with the move? Discuss c) Trade war happens when one country retaliates against another by using import tariffs or placing other restriction on the other country's imports. This can commence if one country perceives a competitor nation has unfair trading practices. Explain the policy implications of trade dispute in an economy.
a. Differentiate headline consumer price inflation from core consumer price
inflation. (4)
b. Mention three examples of headline consumer price inflation. (3)
c. “Low inflation against relatively high lending rates has supported the rand’s
attractiveness as a carry-trade target with yield-hungry investors happy to
ignore local risks for higher returns”. Clearly explain what this implies. (4)
d. What was the main reason for the SARB behind reducing interest rates? (2)
e. Why is it important that South Africa should be consideration of USA’s decisions
when deciding on its monetary policy stance? (3)
f. Why do you think the budget speech is important for monetary policy
committee’s decisions concerning change in interest rates? (2)
g. What does an undervalued currency imply?
b. Mention the types of inequality that were seen most during the period of hard
lockdown in South Africa.
Assume risk neutral preferences. Derive the log-linearized system forthe investment dynamics for the model with capital adjustment costsin (14.43) and investment adjustment costs (14.52). Discuss the dif-ferences. 2. Calibrate two RBC models with capital adjustment costs (14.43) andwith investment adjustment costs (14.52), respectively. Use Dynare tosolve these two models and plot impulse responses to a positive onepercent TFP shock for different curvature parameter values?.
Find on NBER-CES Manufacturing Database http://www.nber.org/nberces/ the data for sectors, number of total employees and production workers («naics», «emp», «prode»)
Average those numbers in aggregated sectors of production
Rank sectors by skill intensity (from lowest to highest)
Skill intensity is measured by classes of number of Production Workers in thousand;
Production Workers = Unskilled Labor;
Notice: The highest value of «prode» out of total employment corresponds to the lowest level of skill intensity.
Classify sectors by skillness quartiles (25% least skilled sectors, 25% medium-low skilled, 25% medium-high skilled, 25% highly skilled sectors) using the rank in the first part
Choose 3 developing and 3 developed countries and calculate their exports to the US within those sectoral groups
Test graphically for the Leontieff paradox
Discuss your results
