Problem 1:
i) Define the three main Economic Systems?
ii) How can knowledge on price, income and cross price elasticity of demand, be helpful to the Government and a firm, respectively?
iii) Many of the Eastern European countries who were previously centrally planned economies have placed greater emphasis on market forces . Discuss the reasons behind such a trend.
Problem 2:
i) Explain the main causes of unemployment.
ii) What do you understand by the terms:
a) Demand-pull inflation
b) Cost-push inflation.
iii) To what extent can fiscal and monetary policies be used to deal with a high rate of inflation?