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May I ask how does a low unemployment affect the other macroeconomic objectives?
Also, may I ask what are the demand and supply-side suggestions for a low inflation rate?
Many African countries are struggling with the level of unemployment especially youth unemployment. In Zambia the government has come up with various initiatives to combat youth unemployment such as the youth fund.
a) Define and calculate the unemployment rate for Zambia given the information below:
Number of inhabitants: 10 million
Labour-force participation: 62 %
Unemployed persons: 455'000
b) Using the information in (a) calculate the participation rate and define it.
c) List and briefly explain any four types of unemployment.

There are various methods in literature that countries use in calculating national income. Assume a simple economy that produces only two goods; maize and fish. Using 2015 as the base year.

Goods 2015 2016 2017 2018
Maize Quantities 700 900 1000 950
Fish Quantities 500 1000 900 750
Price of Maize K65 K70 K80 K90
Price of Fish K50 K70 K90 K120
Nominal GDP
Real GDP

a) Fill in the missing cells in the above table. Clearly show your work.

b) Find the growth rate of nominal GDP for 2016, 2017 and 2018.
c) Find the growth rate of real GDP (using 2015 K) for 2016, 2017 and 2018.

d) Compute inflation using GDP deflator (using 2015 K) for 2016, 2017, and 2018.
e) What are the major differences between the GDP deflator and the CPI?

Briefly explain the difference between an Australian Government budget deficit and a budget surplus
“A change in the price level shifts the aggregate expenditures curve, but not the aggregate demand curve.”
In 2012 the U.S. exchange rate with the European Union was reported as 1.2859 ($/Euro). The rate in 2013 was reported as 1.3281 ($/Euro) (sources: Economic Indicators and FRED). Briefly assess the implications of this exchange rate change for U.S. exports and imports with the European Union.
You are given the following information about an
Gross private domestic investment = 40
Government purchases of goods and services = 30
Gross national product (GNP) = 200
Current account balance = -20
Taxes = 60
Government transfer payments to the domestic private
sector = 25
Interest payments from the government to the domestic
private sector = 15 (Assume all interest payments by
the government go to domestic households.)
Factor income received from rest of world = 7
Factor payments made to rest of world = 9
Find the following, assuming that government investment
is zero:
a. Consumption
b. Net exports
c. GDP
d. Net factor payments from abroad
e. Private saving
f. Government saving
g. National saving
What are the social costs and economic costs of unemployment
Discuss the economic and social costs of unemployment in your country.
A chocolate manufacturing company’s production function is Q = 5KL, where Q is output rate, L is the amount of labour it uses per period of time, and K is the amount of capital it uses per period of time. The price of labour is GH¢1.00 per unit of labour, and the price of capital is GH¢2.00 per unit of capital. The company hires you to determine which combination of inputs to use to produce 20 units of output per period.
a) Determine the combination of labour and capital that the company should hire in order to maximize profits.
b) Suppose that the price of labour increase to GH¢2.00 per unit. What effect will this have on output per unit of labour?
Is the company’s production subject to decreasing returns to scale? Why or why not?

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