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What are the disadvantages of a informal economy?
QUESTION 1 (a) Compare and contrast the main theories of a demand for money. (b) Specify a money demand function for a small island economy like Mauritius. QUESTION 2
QUESTION (a) What are the causes of inflation in an economy? (b) Discuss the policy implications that the central bank will implement if there is excess liquidity in the mar
What is Balanced Growth theory? Balanced Growth theory: This theory argues that market is not capable to deliver growth. State approaches to development are needed since
what are the pricing policies
QUESTION (a) Explain the real business cycle theory. (b) Using appropriate diagrams differentiate between inflationary and deflationary gaps. (c) Differentiate between th
What are the limitations of comparative advantage? Limitations of comparative advantage: International trade needs wide specialisation. This can have drawbacks as given b
what is money supply
Consider the economy (above) again where the following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4) for the prices (p 1 , p 2 , p 3 )=(1, 1, 1).
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