Economics Answers

1. Review the Credit Risk Management guidelines issued by any two Central Banks. Highlight the main elements and compare with Basel guidelines on credit risk management.

2.

Comment on the major challenges to Basel II implementation in the Caribbean in relation to credit risk management

#3

(a) Suppose in winters demand of dry fruits increases. Further supply of dry fruit increases due to favorable environmental condition. Explain with the help of demand and supply curve, how price and quantity will respond

(b) Consider an economy can produce two goods butter and guns. Draw Production possibility frontier for butter and guns. Assume that scientific inventions have doubled the productivity of society's resources. Redraw the Production Possibility frontier

When the price of commodity B rises by 10%, the total revenue received by firms that sell commodity B rises by 5%. The demand for commodity B is therefore...

Consider the following IS–LM model:

C = 400 + 0.25YD

I = 300 + 0.25Y − 1500i

G = 600

T = 400

(M/P)d = 2Y − 12 000i

M/P = 3000

a. Derive the IS relation. (Hint: You want an equation with Y on the left side and everything else on the right.)

b. Derive the LM relation. (Hint: It will be convenient for later use to rewrite this equation with i on the left side and everything else on the right.)

An investment cost N800,000. You know that it will produce an inflow after operating cost of N170,000 a year for 10 years. If the opportunity cost of capital is 14 percent, what is the net percent value of the investment? What will the investment be worth at the end of 5years

Which is not true for the growth for a nation?

A. Growth is a widely held economic goal for a nation

B. Growth raises the standards of living of a nation

C. Growth broadens the burden of scarcity for a nation

D. Growth is prompted by the technological development of a nation

Suppose that the price level is fixed in the short run so that the economy doesn’t reach general equilibrium immediately after a change in the economy. For each of the following changes, what are the short-run effects on the real interest rate and output? Assume that, when the economy is in disequilibrium, only the labor market is out of equilibrium; assume also that for a short period firms are willing to produce enough output to meet the aggregate demand for output. a. A decrease in the expected rate of inflation. b. An increase in consumer optimism increases desired consumption at each level of income and the real interest rate. c. A temporary increase in government purchases. d. An increase in lump-sum taxes, with no change in government purchases (consider both the case in which Ricardian equivalence holds and the case in which it doesn’t). e. A scientific breakthrough that increases the expected future MPK.

The production function for global electronics is Q=2k^0.5 L^0.5

Assume that the capital stock is fixed at nine units (i.e., K = 9). If the price of output (P) is Rs.6 per unit and the wage rate (w) is Rs.2 per unit, determine the optimal or profit maximizing rate of labor to be hired. What labor rate is optimal if the wage rate increased to Rs.3 per unit?

what determines the burden of tax between buyers and sellers and why

The largest category of local revenue is

Group of answer choices

sales tax.

income tax.

property tax.

payroll tax.