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Oil price shocks have been a reoccurring phenomenon over the last fifty years, causing significant fluctuations in the price of oil. Examples of oil price shocks include the early 1970s caused by the OPEC oil embargo, the early 1990s caused by the Gulf War, and the Arab Spring during the early 2010s. Oil-importing nations like Australia are significantly affected by rising oil prices. Nonetheless, evidence has shown that oil price shocks are a temporary phenomenon, and eventually, prices decline. Assume that there is no fiscal policy response from the government in relation to an oil price shock. Use Fig.1 as your starting point.
Explain and illustrate the adjustment process back to long-run equilibrium based on the following
ii. Active stabilisation response (i.e., with policy response). Note, there are TWO active stabilisation polices here. Explain both. [4 marks]
ii. In commercial bank money creation process, what is cash reserve?
If GHC10,000 is deposited in a commercial bank and the cash reserve ratio is 10% of deposits,
iii. How much money can the bank create?
iv. What is the difference in the amount of money created if the cash reserve ratio changes from 10% to 5%?
v. What is the level of the money multiplier?
Y = C + I + G + X
Where C = 30 + 0.8Yd; Yd = Y – T; I = 60; T = 50; G = 50
X = 50 – 0.05Y; X is net export:
i. Find the equilibrium national income.
ii. Find the net exports balance at the equilibrium national level of income.
iii. What happens to equilibrium national income and the net exports balance when net investment increases from 60 to 70?
iv. Explain what happens to equilibrium national income and net exports balance when net exports function changes to 40 – 0.05Y.
Explain whether or not you agree with the following statement: “A company
has R500 million in a deposit account with a local bank. In terms of economic
theory, this represents capital to the firm”
Use a numerical example to explain the difference between the rate of change and the level of change between two values.
Consumption by South African households decreased in the first quarter of 2020.
Write the solution in your copy book, then take a picture of the solution, put it into document in doc or pdf and attach file. 1.The demand for some goods is set by formula Qd = 200-10Р, the supply is presented by the formula Qs = 60+15P 1) Compute the equilibrium price and quantity of goods at this market; 2) If a market price is fixed as Р = 10rub., calculate the demand and supply amount.
Solve for c1 and c2 for the case of the two-period consumption and saving model with certainty, using the quadratic form u(c) = c - 0.5ac2 for the instantaneous utility function and with the following income patterns {y1, y2} and initial wealth w0.
#340153 on Dec 2023