Question 2 a. b. \"Most countries import substantial amounts of goods and services from other countries." \"A nation can enjoy a higher living standard only if it can produce a large quantity of good and services itself.\" How can these two statements be reconciled? (6 marks) What is a government budget decit? Explain how it affects the local interest rams, investment, and economic growth. (6 marks) When a leading developing country defaulted on its loan to foreigners, discuss (with the aid of loanable funds market diagram) why interest rates rose on bonds issued by many other developing countries. (7 marks) Explain why frictional and structural unemployment are unavoidable in most of the economies. Examine the measures that the government can reduce the amount of frictional and structural unemployment. (6 marks)