Answer all the questions below.

Which of the following would constitute a supply-side economic policy for reducing

unemployment?

A increasing social security benefits

B increasing the money supply

C reducing corporate and personal taxation

D increasing government expenditure aimed at exploiting the multiplier effect

19.2 Which of the following is NOT a supply-side economic policy aimed at promoting economic

growth?

A cuts in social security benefits designed to encourage more workers to take work

B measures designed to reduce trade union powers

C deregulation

D tariffs designed to increase the production of domestic goods

Explain why market-orientated supply-side policies may be superior to interventionist supply-side

policies and describe three possible market-orientated supply-side policies.

a. k+(h/m)+V() = 1 h rx V (m) m + - F P(mm) m b. ktch/m)+, Vil = 1 - m " ) Vimal + h m + rati Vimi + - r pin where 0 axth+ 1 U 2(h+1) ax up x Pxth 4xth b. Var[ L|K(x) = k] = 2 axtkth+ 1 U2 (h+1) ax hPxth Pxtkth 9xtkth" For a life annuity-due of 1 per annum payable while (x) survives, consid the whole life loss L = aken - a, K = 0, 1, 2, .. . and the loss A,,, valued at time h, that is allocated to annuity year h, namel 0 KSh -1 Ah = -(arth - 1) = -Upxth axth+1 K = h Vaxth+1 - (axth - 1) = 09xth axth+1 Kzh+1. a. Interpret the formulas for A,. b. Show that (i) L = > oh An h=0 (ii) E[A,] = 0 (iii) Var(A,) = 02 (axth+1) hPx Pxth 9xth.a. For the insurance of Example 8.3.2, establish that Var(L) = > U2(1+1) "Px Pxth 9xth. b. If 8 = 0.05, n = 20, and p,(t) = 0.01, t = 0, calculate Var(L) for the insurance in (a). A 20-payment whole life policy with unit face amount was issued on a fully discrete basis to a person age 25. On the basis of your Illustrative Life Table and interest of 6%, calculate a. 20 25 b. 19 /25 C. 20 25 d. Var[20 L|K(25) = 20] e. Var[18LK(25) > 18], using Theorem 8.5.1. on 8.6 Interpret the differential equations a. #7 + V = 1, + [8 + 1, (t ) ] , V - b, Hx(t) b. HIV = T, + 8, V - (b, - , V) M.(t). If b, = V, V = 0, and T, = 1, t 2 0, show that ,V = 157. Evaluate (d / dt) ([1 - V(A,)] p.). Use (8.6.2) to write expressions for a. a dt (Px . V) b. dt (u' , V ) C. d dt (u' Px . V ) and interpret the results. ellaneous Show that the formula equivalent to (8.4.6) under the hyperbolic assumption for mortality within the year of age is K+SV = 01 -s[(1 - s) (* V + Tx )(1 + i) + s *+1V]. Prove that [o' - PCA)aqP Px M.(t) dt = [1 -V(A,)1 02 Px My(t) dt and interpret the result. For a different form of the Hattendorf theorem, consider the following: ( K -K) bK+1 U( K-k)+1 - V - S K(x) = k, k + 1, ..., k+m - 1 k,ml = m-1 ktm um V - With Uh K(x) = k + m, k + m+ 1