Question

Section B

Consider the following table, which shows the production possibilities of the two countries X and Y, and answer questions B6 and B7 Cement production (Output of 100 men) 100 40 140 Paint production (Output of 100 men) CountryX Country Y Total 150 120 270 B6 Which one of the following statements is correct? [1 Country Y has an absolute advantage in the production of paint, and a comparative 2 Country X has an absolute advantage in the production of both paint and cement, and 3 Country Y has an absolute advantage in the production of cement, and a comparative 4] Country X has an absolute advantage in the production of both paint and cement, and advantage in the production of cement. a comparative advantage in the production of paint. advantage in the production of paint. a comparative advantage in the production of cement. B7 It would be more efficient for country Y to export [1] [2] [3] [4] cement both cement and paint paint none of the two goods

B22 Expansionary demand management policy measures tend to…
[1] raise the real GDP and inflation.
[2] increase price level and decrease real output.
[3] increase both inflation and the level of unemployment.
[4] Increase the production cost, which will decrease total production.

B24 Which of the following is NOT the cause of demand-pull inflation?
[1] increase in consumption spending.
[2] a decrease in interest rates.
[3] increase in net exports.
[4] rising commodity (e.g. oil) price.

B25 Cost-push inflation can be illustrated by______ shift of the______ curve. To combat cost-push inflation, ______ policy should be implemented to reduce aggregate______.
[1] leftward (upward); AS; incomes; supply.
[2] leftward (downward); AD; demand management; demand.
[3] rightward (downward); AS; incomes; supply.
[4] rightward (upward); AD; demand management; demand.

B26 Demand-pull inflation can be illustrated by______ shift of the______ curve. To combat demand-pull inflation, ______ policy should be implemented to reduce aggregate______.
[1] leftward (upward); AS; incomes; supply.
[2] leftward (downward); AD; demand management; demand.
[3] rightward (downward); AS; incomes; supply.
[4] rightward (upward); AD; demand management; demand.

B27 In 2017, South Africa experienced higher job losses in the mining industry, resulting from insufficient demand for mining commodities. This is an example of…
[1] structural unemployment
[2] cyclical unemployment
[3] seasonal unemployment
[4] frictional unemployment

B28 If the number of people classified as unemployed in 2018 is 175 000 and the number of those employed in the same year is 325 000, what is the unemployment rate?
[1] 35 percent
[2] 53.84 percent
[3] 46.15 percent
[4] 85 percent

B29 Assume in 2017, the South African economy was experiencing stagflation. Following the implementation of incomes policy in the last quarter of 2017, the economy moved out of stagflation in the first quarter of 2018. This will be illustrated by a (n)…
[1] leftward shift of the Phillips curve, a decrease in inflation and unemployment.
[2] rightward shift of the Phillips curve, an increase in inflation and unemployment.
[3] rightward shift of the Phillips curve, an increase in inflation and employment level.
[4] leftward shift of the Phillips curve, a decrease in inflation and employment level.

B30 Economists define economic growth as a(n)…
[1] increase of nominal GDP over time.
[2] increase of current GDP per capita.
[3] Increase of real GDP over time.
[4] Gross domestic product per capita.

Answer 1

Ans

1 D is right. Absolute advantage because x can produce more quantities of both goods. Comparative advantage because it's oppututunity cost of 150/100 is less than 120/40 of Y

2 paint as its has comparative advantage in it because of lower opportunity cost

3 A is right. As AD shifts rightwards, it's intersection with Aggregate supply occurs towards right side. Thus both output and inflation rises

4 D because it increases cost of production and is thus supply side factor

Can answer only 4 parts according to HOMEWORKLIB POLICY