Economics Answers

Explain the IS-LM model

what is LM curve

country experiences a decrease in the price level and a rise in real output. What combination of the 

changes in aggregate demand and supply would generate this outcome?

A. A decrease in aggregate demand but no change in aggregate supply.

B. An increase in aggregate supply but no change in aggregate demand.

C. A decrease in aggregate supply.

D. An decrease in both aggregate demand and aggregate supply

Complete the following statement: At below full employment equilibrium: ......... GDP exceeds .......GDP 

and there is …… gap.

A. potential, real, inflationary

B. real, potential, recessionary

C. real, potential, natural rate of unemployment

D. potential, real, recessionary

Discuss the economic effect of Covid19 on employment, output and inflation in south Africa

Graphically illustrate the impact of the management’s restructuring decision on the firm’s production function. Your diagram should have the amount of human intelligence on the horizontal axis and the number of decisions on whether to provide insurance on the vertical axis. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Briefly explain the key information of your diagram

Discuss the economic effect of Covid19 on employment, output and inflation in south Africa

Consider the utility function u(x) = ; and a standard budget constraint: p₁x₁+p₂x₂=I.

a. Are the preferences convex?

b. Are the preferences represented by this function homothetic?