Why would division of labor without trade not

work?

10. Give the three reasons that explain why the division of labor increases an economy's level of production. 11. What are three reasons to study economics? 12. What is the difference between microeconomics and macroeconomics? 13. What are examples of individual economic agents? 14. What are the three main goals of macroeconomics? 15. How did John Maynard Keynes define economics? 16. Are households primarily buyers or sellers in the goods and services market? In the labor market? 17. Are firms primarily buyers or sellers in the goods and services market? In the labor market? 18. What are the three ways that societies can organize themselves economically? 19. What is globalization? How do you think it might have affected the economy over the past decade?6 (i) Describe briefly four methods of valuing an equity investment. [4] (ii) For each method, comment on the main drawbacks. [4] (iii) State with reasons your approach to valuing: (a) a company operating in a number of different industries (b) a property company [4] [Total 12] Discuss how economic influences have an impact on the property market. [13 8 (i) Define immunisation and state the conditions for it. [4] (ii) Describe briefly the problems in putting immunisation theory into practice. [7]A private investor, not subject to tax, wishes to construct a portfolio consisting of bonds and equities. The investor proposes to use the long-term historical returns on, and standard deviations of, the two asset classes as estimates of the expected future returns and risk of his portfolio. Based on this data, he wishes to construct a portfolio with the minimum risk. (i) Discuss the suitability of his estimates of expected returns and risk levels. [3] (ii) Discuss the parameters that will influence the return on the portfolio and the mix between bonds and equities needed to obtain the minimum risk portfolio. [ For this part of the question, you may assume that the historical returns and standard deviation are accurate estimates of expected future returns and risk levels.] [8] [Total 1 1] (i) List four economic factors which influence the level of Government bond yields. [2] (ii) Discuss the additional influences which lead to different yields being available on: (a) corporate bonds (b) equities [2] (iii) Comment on how the real yield premiums on equities over Government and corporate bonds might be expected to move over a period of recession. [2]