problem 1:

i) How might unemployment take place?

ii) Critically illustrate and discuss how fiscal policy can be used to condense the unemployment rate in an economy.

problem 2:

i) Briefly verify the cases for government intervention in economy.

ii) Suggest and evaluate ways of how government actually intervenes in such a condition.

problem 3:

i) Illustrate the concept of circular flow of income.

ii) Comment on the view that ‘GDP is the best measure to evaluate economic growth and standard of the living’.

iii) What is economic growth? Verify and comment briefly on the possible contributors to economic growth.

problem 4:

i) Why do people earn dissimilar amounts of wages?

ii) Define productivity and illustrate carefully how firms can lift up the productivity of labour.