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Statistics south Africa reported the fo3 data fir 2012 labour force 17 948 000. Employment, 13 422 000, working age population, 32 786 000. Calculate the unemployment rate, labour force participant rate and absorption rate
YP=1/5(Y+Y_1+Y_2+Y_3+Y_4)
Suppose further that consumption is given as C=0.9YP
I).If you have earn 20,000 per year for the past 10 years, what is your permanent income?
calculate the aggregate expenditure and multiplier when C= 300+0.14Y, I= 700, G = 5000, TX= 3+ 0.0Y and TR= 90
Review the discussion of bias in the CPI. Explain why failure to consider the quality improvement of a
new good leads to an upward bias in the trend of the CPI. Pick a good you are familiar with. Explain how its
quality has changed and why it might be difficult for a price index to capture the increase in quality.
QUESTION THREE
Recently, the Transport Association of Zambia increased the price of bus fares for all long routes in Zambia. Specifically, the price of tickets between Lusaka and Livingstone increased from 200 Kwacha to 250 kwacha. The demand equation is representative of the demand for bus tickets between Lusaka and Livingstone.
a)Calculate the old price quantity demanded level
b)Calculate the new price quantity demanded level
c)Work out the Price Elasticity of Demand for tickets from Lusaka to Livingstone between 200 kwacha and 250 kwacha
d)Briefly discuss the Price Elasticity of Demand for tickets from Lusaka to Livingstone between 200 kwacha and 250 kwacha and clarify revenue
Carefully show how expected inflation determines interest rates per the loanable funds theory. (6marks)
What are the benefits of portfolio diversification? Would an investor be better off with an over diversified portfolio? Explain. (7marks)
