Please solve the following in statement forms I will appreciate
5. (a) Explain the following terms which are commonly used in estimating the National Income statistics of a country: Subsidies; Incomes-in-kind; Net Factor Income from the Rest of the World. (15) (b) Illustrate by means of a diagram the Circular Flow of Income for an open economy. Are transfer payments an injection into, or a leakage from the Circular Flow of Income? Explain your answer. (iii) Outline three current determinants of the level of consumption in the Irish economy. (35) (c) (i) Using the Keynesian multiplier process outline how a fiscal stimulus (i.e. a government injection) would affect an economy's Aggregate Demand. (ii) Explain why the Irish government might find it difficult to implement such a Keynesian stimulus plan at the current time. (25) [75 marks] 6. (a) (i) Explain, using a numerical example, how banks create credit in an economy. (ii) Outline two factors which limit the ability of banks to create credit during recessionary times. (30) (b) Some central banks have responded to the global financial crisis by introducing the monetary policy measure of 'Quantitative Easing' (i.e. buying financial assets from financial institutions using new money it has created). (i) Outline two possible economic effects of this measure for an economy. The European Central Bank (ECB) reduced interest rates in 2012. (ii) Discuss two possible economic benefits of falling interest rates for the Irish economy. (20) (c) The monetary policy of the ECB aims to maintain the annual euro area inflation rate at a very low level. (i) State the rate of inflation in Ireland during 2013, as measured by the Consumer Price Index (CPI). (ii) Outline two uses of the CPI, other than as a measure of the rate of inflation. (iii) Discuss the possible limitations of the CPI as an accurate measure of changes in the cost of living in Ireland. (25) [75 marks]3. (a) State and explain four economic influences on an individual firm's demand for labour. (25) (b) Explain, with the aid of a labour market diagram in each case, how equilibrium wage rates are determined in: A free labour market; . A labour market where a trade union has negotiated a minimum wage. (25) (c) Women in Ireland earn on average 17.1% less per hour than men, according to a study by the European Commission (Tackling the gender pay gap in the European Union, 2011). (i) Outline two possible reasons for the lower wage rates earned by women in the Irish economy. (ii) Outline one measure that could be taken to close the gender pay gap. (15) (d) Explain briefly Karl Marx's economic theory about the exploitation of labour in a capitalist system. (10) [75 marks] 4. (a) 'The Exchequer deficit in December 2012 was (14.89bn'. (Department of Finance, January 2013) (1) Discuss four possible economic consequences of the Government Current Budget Deficit for the Irish economy. (ii) Explain how a government budget could be used to reduce income inequalities in an economy. (30) (b) (i) State and explain two reasons why the government increased taxes on cigarettes and alcohol in its most recent budget. (ii) Outline three economic impacts for the Irish economy of an increase in Motor Tax. (30) (c) "The Public Capital Programme must make a further contribution to budgetary consolidation'. (Infrastructure and Capital Investment, 2012 - 2016) As an Advisor to the Minister for Public Expenditure and Reform, discuss two economic arguments in favour of a reduction in capital expenditure in the Budget. (15)Answer six of the nine short response type questions in the spaces provided. 1. The fundamental economic problem is one of 'scarcity'. Explain this concept. (16 marks) 2. Define the 'Marginal Efficiency of Capital' (MEC). Outline two possible reasons for a fall in MEC. Definition: Reason 1: Reason 2: (16 marks)
