STUDY PERIOD 1, 2020 EXAMINATIONSTAKE AWAY HOME- FINAL EXAM STUDENT NAME: Number of pages,...

Question

STUDY PERIOD 1, 2020 EXAMINATIONSTAKE AWAY HOME- FINAL EXAM     STUDENT NAME:    Number of pages, including front page, exam paper and any attachments:    Eight (8) pages    STUDENT NUMBER:    Paper to be Submitted online on 29th May, 2020 before 5pm.      SUBJECT CODE:    RH1003        SUBJECT NAME:    Economics    EXAMINER:    Sangeeta Rai    DURATION OF EXAMINATION (hours):    7 days            TOTAL NUMBER OF QUESTIONS:    Answer all five (5) questions on this paper in the spaces provided after each question.     WEIGHTING:    This exam is worth 45% of the total marks toward your result in this subject    INSTRUCTIONS TO STUDENTS:        1) Attempt ALL questions on the examination papePage 1 of 7RH1003 –TAKE AWAY HOME -EXAM QUESTIONSAnswer all five (5) questions on this paper in the spaces provided after each question.Question 1.                                                                                                (10 marks)      Discuss the costs associated with high inflation.                                     (10 marks)----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Question 2.                                                                                                (10 marks)a) Define Aggregate Demand.                                                     XXXXXXXXXX1 mark) -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------           )  Describe 4 reasons why Aggregate Demand shifts?               XXXXXXXXXX4 marks)--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------c) What could be happening if AD expands too quickly?             XXXXXXXXXX5 marks)-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Question 3.                                                                       XXXXXXXXXX10 marks)a) Explain with examples why frictional and structural unemployment are simply unavoidable in a viant economy?                             XXXXXXXXXX10 marks). -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Question 4.                                                                                         XXXXXXXXXX8 marks)                                                 a) Discuss two (2) advantages of fiscal policy?                    XXXXXXXXXX4 marks)---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------) Discuss two (2) disadvantages of fiscal policy?           XXXXXXXXXX4 marks)----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Question 5.                                                                            XXXXXXXXXX7 marks) a) Describe the difference between real GDP and nominal GDP XXXXXXXXXXmarks)------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------) Discuss whether real GDP or nominal GDP is more useful for measuring change in the economy over time?                                                   XXXXXXXXXX5 marks)------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                             XXXXXXXXXXEND OF PAPER    Copyright Reserved         END OF PAPER

Komalavalli · Accepted Answer

STUDY PERIOD 1, 2020 EXAMINATIONS
TAKE AWAY HOME- FINAL EXAM 
	STUDENT NAME:
	Number of pages, including front page, exam paper and any attachments:	Eight (8) pages
	STUDENT NUMBER:
	Paper to be Submitted online on 29th May, 2020 before 5pm.  
	SUBJECT CODE:
	RH1003
	
	SUBJECT NAME:
	Economics
	EXAMINER:
	Sangeeta Rai
	DURATION OF EXAMINATION (hours):
	7 days
	
	
	TOTAL NUMBER OF QUESTIONS:
	Answer all five (5) questions on this paper in the spaces provided after each question. 
	WEIGHTING:
	This exam is worth 45% of the total marks toward your result in this subject
	INSTRUCTIONS TO STUDENTS:
	
	1) Attempt ALL questions on the examination paper
Page 1 of 7
RH1003 –TAKE AWAY HOME -EXAM QUESTIONS
Answer all five (5) questions on this paper in the spaces provided after each question.
Question 1.                                                                                        		(10 marks)      
Discuss the costs associated with high inflation.                             		(10 marks)
Inflation is continual rise in price of goods and services over a period of time. The high inflation rate is known as hyper inflation. The cost associated with hyper inflation is 1.Loss of Purchasing Power, 2.Menu cost, and 3.Redistribution of wealth, 4.shoeleather cost, and 5.Misallocation of resources. 
1. Loss of purchasing power: Inflation leads to decrease in value of an individual dollar with an increase in price over the period of time. Thus the individual who have same wage with rise in inflation rate will be able to purchase less. If wage increases at the same rate of increase in inflation, purchasing power can be maintained. But this won’t be applicable in all time. Therefore people lose their purchasing power with a high inflation rate. 
2. Menu cost: When prices change over the period of time firms would likely to change their prices in order to keep in track with the increasing trend of price in the economy. This change in price of a product would involve cost changing the product label, printing new labels and so on. Firms have to decide whether to operate at a price level which is non profitable or at a new price which involves menu cost. Either way the firm will have to bear the cost of inflation.
3. Redistribution of wealth: Consequence of inflation is not distributed evenly in the economy, as a result of this there is a hidden cost for some individual and it benefits some other individual with a decrease in purchasing power. Let us consider if a individual burrowed a money from other person, high inflation result in lowering the value of debt in real terms. Therefore lending person will be affected while burrowing person will be benefited from this high inflation.
4. Shoeleather cost:  It refers to the cost of effort and time that people trying to spend in order to counteract the impact of high inflation rate such as holding less cash, having to make additional trips to the banks. The term shoeleather comes from the fact that more walking is required to go to the bank and get cash and spend it.
5. Misallocation of resources:

STUDY PERIOD 1, 2020 EXAMINATIONS TAKE AWAY HOME- FINAL EXAM STUDENT NAME: Number of pages, including front page, exam paper and any attachments: Eight (8) pages STUDENT NUMBER: Paper to be Submitted...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment