Determine the equilibrium level graphically

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Reference no: EM131054190

1. There are 4 different types of unemployment. State how the following would be classified-

i) Unemployment of unskilled workers from declining industries

ii) Unemployment which results from the closure of ski resorts during summertime

iii) Unemployment stemming from a decline in world GDP

iv) Unemployment resulting from high wage demands by the labour union

2. Aggregated demand and supply analysis

You are in an economy where consumption is given by the following function

C = 65 + 0.8Y

The economy has no government expenditure and does not have any foreign trade at present but it does have investment expenditure, which is constant at €150.

a) Complete the following table

Income	0	100	200
Consumption

b) Determine the equilibrium level graphically.

c) Calculate the equilibrium level of income.

3. Regulation of the banking system

A) Explain the different possible types of regulation

B) Discuss reasons why regulation may fail.

4. Why is the multiplier higher for investments than for Government expenditure? Explain.

Reference no: EM131054190

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