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Suppose that an individual invests $2,500 at the end of each of the next 6 years and
earns an annual interest rate of 8%. Calculate the present value of this series of annuity payments
B)Suppose that an individual invests $2,500 at the beginning of each of the next 6 years and
earns an annual interest rate of 8%. Calculate the value of this series of annuity payments. How
does this result compare with the solution to Part A?
Explain that fiscal policy is less effective than monetary policy in a situation when investment is very interest elastic and money demand is very interest inelastic
For a single model of the expenditure sector with government and income taxes, derive the expenditure multiplier and explain how it changes as the marginal propensity to save increases.
Develop a qualitative analysis on income, interest rate, trade balance and private consumption using the IS-LM-BP model if the Fiji dollar was devalued. Assume perfect capital mobility. Carefully discuss the adjustment processes.
Q1.
A labor force survey for UG Ll 00 economy suggests that the total number of employed are
11 million, with an unemployment rate of 5.5 %. If the labor force participation rate is 62%,
calculate
i. Unemployment rate
ii. Labor Force
iii. Assume that there are 20,000 discouraged workers, how will the unemployment rate
change.
iv.
Assume instead, there are 20,000 dishonest workers, how will the unemployment rate
change.
For any developing country, analyze its exchange rate system and all recent developments in its exchange rate policies. Use these to answer the following questions in your writing:
Question: Discuss in the context of any one of the South Pacific Island countries the following: Use data analysis and or graphs where applicable.
List the key trade policy challenges for Small Developing Island States (SIDS) in the present context of COVID-19? Suggest how these could be dealt with.
Q1.If nominal GDP in 2005 exceeds nominal GDP in 2004, did real output rise? Did prices rise?
Q2.If you buy a $20,000 Toyota that was produced entirely in Japan, does this affect Ghana’s
GDP? Show how this expenditure would affect the appropriate expenditure categories that
make up GDP.
Q3.What contributes more when measuring GDP, a new diamond necklace purchased by a
wealthy person or a bottle of Pepsi purchased by a thirsty person? Why?
Q4.If your neighbor hires you to watch her kids instead of doing it herself, what will happen to
GDP? Did output! production change? Briefly explain your answer.
With clear illustrations, discuss challenges associated with offshoring and systematically highlight strategies necessary for assured venture growth in any business environment
