ECONOMICS FOR BUSINESS by Ward Damian & Begg David

Author:Ward, Damian & Begg, David [Ward, Damian]
Language: eng
Format: epub
Published: 2016-02-29T16:00:00+00:00

Questions

EASY

1. What are the key macroeconomic variables for an economy? How have these variables changed in your economy over the last five years?

2. What key macroeconomic variables can a government or central bank control? How have these changed for your economy during the last five years?

3. Draw a circular flow of income for an economy that has a government sector and is open to international trade.

4. Identify the leakages, injections and components of aggregate expenditure in your circular flow diagram.

5. Explain why there is a negative relationship between inflation and aggregate demand.

6. Consumer and business confidence are increasing. Illustrate the likely consequence of these changes on aggregate demand.

7. Explain why in the long run aggregate supply is perfectly inelastic, but in the short run it is elastic.

8. Would an increase in aggregate demand generate an inflationary or deflationary boom? Would a reduction in aggregate supply generate an inflationary recession or a deflationary boom?

9. Explain what is meant by the term ‘a lead indicator’.

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