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2018 JUPEB ECONOMICS OBJ/THEORY QUESTIONS AND ANSWERS

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2018 JUPEB ECONOMICS OBJ/THEORY QUESTIONS AND ANSWERS

JUPEB 2018 ECONOMICS (OBJ & THEORY) QUESTIONS and ANSWERS/EXPO/RUNZ


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JUPEB 2018 ECONOMICS (OBJ & THEORY) QUESTIONS and ANSWERS/EXPO/RUNZ

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ANSWERS BELOW

JUPEB ECONOMICS

2a
Monopoly is the exclusive possession or control of the supply of or trade in a commodity or service.
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3a
i. The expenditures approach says GDP= consumption + investment + government expenditure + exports – imports.

ii.Theincome approach sums the factor incomes to the factors ofproduction.

iii. The output approach is also called the “net product” or “value added” approach.

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3b
Multiplier-accelerator model. … This model is based on the Keynesian multiplier, which is a consequence of assuming that consumption intentions depend on the level of economic activity, and the accelerator theory of investment, which assumes that investment intentions depend on the pace of growth in economic activity.

6ai)A balance of payments deficit means the country imports more goods, services and capital thsan it exports . It must borrow from other countries to pay for its imports. In the short-term, that fuels the country’s economic growth. It’s like taking out a school loan to pay for education. Your expected higher future salary is worth the investment.
In the long-term, the country becomes a net consumer, not a producer, of the world’s economic output. It will have to go into debt to pay for consumption instead of investing in future growth. If the deficit continues long enough, the country may have to sell off its assets to pay its creditors. These assets include natural resources, land and commodities

6aii)A trade deficit occurs when a country does not produce all it needs. Most nations must borrow from foreign states to pay for the imports.
Therefore, a country with a trade deficit will also have a
current account deficit .
A trade deficit also results when domestic companies manufacture in foreign countries. When raw materials are shipped overseas to factories, they count as exports. When the finished goods are shipped back home, they count as imports. That’s true even though they’re made by domestic companies. The imports are subtracted from the country’s gross domestic product . That’s despite the fact the earnings benefit the company’s stock price and the taxes increase the country’s revenue stream.

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5b
i. Devaluation of exchange rate (make exports cheaper – imports more expensive)

ii.Reduce domestic consumption and spending on imports (e.g. tight fiscal policy/higher taxes)

iii. Supply side policies to improve the competitiveness of domestic industry and exports

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