i need help with the following questioins dear tutors... explain all parts

Risk Sharing Consider H households, with household h consisting of In members. There is a single consump- tion good in this economy. Individuals also care about leisure, thus their per-period utility is wih(Ch, li,h), where i denotes the individual and h denotes the household. This utility function is differentiable in both arguments and satisfies all usual conditions. Individuals discount the future at rate / and maximize expected utility. Assume that there exist a countable set of payoff relevant states of nature St in period t, and we denote a generic state by st (st ( S:). As usual we denote a history by s' = (s1, ..., st). The probability of history s' is a (s'). The sources of individual income are wage income and non labor income. Non-labor income in history s' is yuh (st) and the hourly wage rate as wy,k (st). Note that both income and wages only depend on the current state s. Thus, total wage income of individual i in household h and state s, will be the wage rate wih (s,) times the number of units of time worked. Each individual has a total time endowment of Tip per period. Finally, there is a transfer schedule amongst households. Let 7 (s) denote the (net) transfer received by household h when state s is realized. Household Level Analysis We begin by assuming that the risk sharing unit is the household. Assume a unitarian household model in which allocations are decided as a result of an efficient social-planner-like decision rule with weights jah on individual utility functions. (1) Write down the program that a household h solves when deciding consumption and labor allocations for its members. (2) Characterize the solution to the allocation problem. Please be explicit on which variables che and ?'^ depend. Provide a precise intuition why the solution depends on those variables (and why not on some others). (3) With your answer to the previous question in mind: what do you think of the usual risk sharing regressions? Why might a significant effect of individual income in the consumption regression not be informative about the absence of risk-sharing? (4) Now suppose that consumption and leisure are separable in individuals' prefer- ences. Formally, suppose that at (c, !) = o (c) + q(!). Which variables determine individual leisure and consumption now? (5) How could this allocation be decentralized, (assuming that each agent is free to decide how much to work)? (6) Does individual labor supply of agent i in household & depend on wages and incomes of individuals in the household? Why or why not? (7) Suppose only for this question that the utility function was CARA only in consump- tion (i.e.,"(c) = =e"") and you would like to identify the risk aversion of agents in a household. Could you identify the parameter of using the usual risk-sharing regression? Why or why not? (8) Express the indirect utility function of household h, wh, implicitly. What are the arguments of the indirect utility function?Trade tonsions bet-Iveen china and the United States At a WDrid Economic Forum meeting in Switzerland in 2m ?, the Chinese President re-atiirmed his country's commitment to free trade and pledged never to start a protectionist 'trade war' or to benet from a devaluation of its currency, the yuan. Meanwhile. the United States {U5} President stated that the 'America First' doctrine means increased protectionism and he repeatedly threatened to impose tariffs and import quotes on Chinese goods. During 2016, the value of the U5 dollar rose against most currencies. In contrastr the Chinese yuan weakened signicantly from Bit] yuan per US dollar at the end of 3114 to 6.95 yuan at the end of 2th 5. The US President has accused China of intentionally devaluing the yuan in order to boost China's export competitiveness. Despite strong downward pressure on its currency, China has attempted to keep the yuanU5 dollar exchange rate relatively stabler costing more than US$2 trillion of its official foreign exchange reserves. China has stated that it does not want the yuan to fall in value any more than the US does. but no country has complete control over its exchange rate. China, lilre Japan and Germany, usually has a current account surplus on the balance of payments, but China's ounent account surplus as a percentage of 'GDP fell in Et and the International Monetary Fund expects it to decrease further, as experts continue to fall. There are three policy paths that a country can follow with regard to its exchange rate: a completely free oat, a managed oat or a fixed [pegged] exchange rate. Each of these has various advantages and disadvantages. At present, China's policy is a managed oat, but some economists have argued that it is the yuanUS dollar exchange rate that is regarded as being especially important and so it might be better if China decided to fix [peg] the yuan to the dollar. Fig. 1.1 shows the yuanUS dollar exchange rate over three years. Fig. 1.1: Yuan-US dollar exchange rate, 2014-2017 Yuan per US 6.6- dollar 6.5- 6.4- 6.3 6.2- 6.1- 6.0- 2014 2015 2016 2017 Source: Trading Economics (a) Describe, using Fig. 1.1, how the value of the yuan against the US dollar has changed between 2014 and 2017. [2] (b) The US President threatened to increase protectionism of the US economy. Explain, using a diagram, how one of the methods of protection mentioned in the article can work. [4] (c) Explain two effects of the fall in China's current account surplus for China's economy. [4] (d) Explain two likely reasons why China has opted for a managed float exchange rate system. [4] (e) Discuss who would be the winners and the losers from a protectionist 'trade war' between the US and China. [6]IB19 06_9708_31/RP Cambridge Assessment UCLES 2019 International Education [Turn over 2 1 When can an economy be said to be economically inefficient? A when it is possible to make some people better off without making other people worse off B when the distribution of income is socially unacceptable C when the government sector is growing at the expense of the private sector when wage rates rise faster than production 2 The diagram shows cost and benefit curves for a good in a free market. cost, benefit ($) P P O Which combination is correct? actual output social optimal level of output A P1Q1 P3Q3 P2Q2 P3Q3 C P2 Q2 PAQA P3Q3 PAQ 3 A food processing firm discharges waste water into the lake next to its factory. What would reduce the difference between the private cost and the social cost of the firm's actions? A Local residents are given the right to buy the firm's food at a discount. B The government subsidises the food processing firm. C The lake is bought by the food processing firm. D The waste water flows from the lake into the sea. UCLES 2019 9708/31/M/J/19 3 4 The diagram shows attainable indifference curves, I, and Iz, for good X and good Y. Which point represents the highest level of satisfaction currently attainable? good Y O22 A large coal mine is forced to close because of falling demand for coal as consumers switch to less-polluting fuels. The government organises retraining courses and recruitment events for the coal mine workers. Which type of unemployment is the government trying to reduce? A cyclical B seasonal C structural D technological 23 Economists have proposed that the best policy to promote development is 'trade not aid'. What is implied by this proposal? A Developing countries should become self-sufficient. B Developing countries should be given greater access to markets in developed countries. C Developing countries should use foreign aid to invest in their export industries. D Developing countries should use trade barriers to promote import substitution. 24 The table shows the values of selected macroeconomic variables over a period. year 1 year 2 ($m) ($m) investment 200 220 saving 180 190 exports 100 110 imports 120 140 government expenditure 150 160 taxation 150 160 equilibrium national income 1800 2000 What is the value of the multiplier? A 2 B C 5 D 10 25 What is most likely to increase if an economy enters a negative output gap? A business confidence B economic growth rate C inflation rate D unemployment rate UCLES 2019 9708/31/M/J/19 11 26 Under which conditions will a Keynesian expansionary fiscal policy be most likely to take an economy out of a recession without too much inflation? demand wage aggregate for money flexibility supply curve D interest elastic high price elastic interest inelastic high price inelastic interest elastic low price elastic interest inelastic low price inelastic 27 What would cause an increase in the transactions demand for money? a fall in the price of bonds27 What would cause an increase in the transactions demand for money? A a fall in the price of bonds B an increase in nominal national income C an increase in the rate of interest D an increase in unemployment 28 What may lead to a reduction in bank lending in a country? A an increase in commercial banks' balances with the central bank B an increase in the liquidity ratios operated by the country's commercial banks C an increase in the monetary base of the country D an increase in the volume of liquid assets held by the country's commercial banks DUCLES 2019 9708/31/M/J/19 [Turn over 12 29 The table gives details of the inflation and unemployment rates for different countries in 2008 and 2011. inflation rate unemployment rate country % per annum) % of workforce) 2008 2011 2008 2011 Canada 2.38 2.89 6.15 7.47 France 3.16 2.29 7.81 9.68 Germany 2.75 2.48 7.60 5.98 Japan 1.37 -0.28 3.99 4.55 Which country or countries experienced a trade-off between their inflation and unemployment rates? A Canada and Germany Canada only C France and Japan D France only 30 The government decides to raise the rate of Value Added Tax (General Sales Tax). What does this suggest is the government's main macroeconomic objective? A to reduce the budget deficit B to reduce the inequality of income distributionAnswer six of the nine short response type questions in the spaces provided. 1. Define regressive tax and state TWO examples of this type of tax. Definition: Example 1: Example 2: (16 marks) 2. State FOUR economic aims of government. (i) (ii) (iii) (iv) (16 marks) 3. Define Monetary Policy. State TWO measures by which the European Central Bank implements monetary policy within the euro-zone countries. Definition: Measure 1: Measure 2: (16 marks) 4. Define the term "Balance of Payments on Capital Account'. State TWO examples of items which may appear in it. Definition: Example 1: Example 2: (16 marks) 5. State THREE economic reasons why entrepreneurs are important to the development of an economy. (i) (ii) (iii) (16 marks) Page 2 of 7 6. Using the diagram, explain how higher consumers' incomes (other factors unchanged) may affect the demand curve for mobile phones in Ireland. Diagram Explanation P