Economics, Accounting & Business: Post your doubts here!

[asadalam]

It can be obviously but nothing is explicitly stated.

It's a rule.Any line passing through the origin will have unit elasticity

Alright so both Income ED and PES will be unitary if they pass through origin.

 

[Heyyy]

Alright so both Income ED and PES will be unitary if they pass through origin.

No not YED.
Only PES.
There's no such rule for demand elasticities

 

[Asim Shah]

Do you have online Phillip Allan Magazines archive for business and ecoonmics

 

[asadalam]

No not YED.
Only PES.
There's no such rule for demand elasticities

How is the ans C?Wouldnt inflation be caused by an increase in AD curve,that could be due to surplus in BOP?Or is surplus the reason only for Inflation,and Inflation itself doesnt affect surplus?And what are cash balances,we havent read about them nor are they mentioned anywhere.

 

[Heyyy]

View attachment 54040
How is the ans C?Wouldnt inflation be caused by an increase in AD curve,that could be due to surplus in BOP?Or is surplus the reason only for Inflation,and Inflation itself doesnt affect surplus?And what are cash balances,we havent read about them nor are they mentioned anywhere.

Inflation will be caused as a result of either i)Supply shock , ii) Demand pull or iii) Money supply

A)Balance of payment surplus;it will be caused as a result of a backward shift in AD not an increase in AD.

As inflation rises people will demand more money(in liquid form).People will also demand more money if AD rises(as income rises as a result).

 

[asadalam]

Inflation will be caused as a result of either i)Supply shock , ii) Demand pull or iii) Money supply

A)Balance of payment surplus;it will be caused as a result of a backward shift in AD not an increase in AD.

As inflation rises people will demand more money(in liquid form).People will also demand more money if AD rises(as income rises as a result).

Wont there be a surplus if Exports minus imports increases and hence that will shift the AD curve to the right,causing inflation?

 

[Heyyy]

Wont there be a surplus if Exports minus imports increases and hence that will shift the AD curve to the right,causing inflation?

Rise in inflation causes a rise in domestic prices.
This makes exports more expensive and imports relatively cheaper.
Hence a BOP deficit.

 

[asadalam]

Rise in inflation causes a rise in domestic prices.
This makes exports more expensive and imports relatively cheaper.
Hence a BOP deficit.

Man Eco is really contradictory and confusing.On one hand your explanation makes sense,but on the other i know that BOP surplus causes inflationary pressure as exports increase,leaving less goods in the country and hence raising their price due to less supply,and as imports will be less,it will also put pressure on domestic industry causing inflation.

 

[Heyyy]

Man Eco is really contradictory and confusing.On one hand your explanation makes sense,but on the other i know that BOP surplus causes inflationary pressure as exports increase,leaving less goods in the country and hence raising their price due to less supply,and as imports will be less,it will also put pressure on domestic industry causing inflation.

Yes economics is like that.lol
It's subjective.
There are always some questions in the paper to stop one from scoring full.
I have done 4 papers up until now and have come across such a question in every paper

 

[asadalam]

Yes economics is like that.lol
It's subjective.
There are always some questions in the paper to stop one from scoring full.
I have done 4 papers up until now and have come across such a question in every paper

Yeah theres always one question.I've gotten 29 twice but always lose out due to such stupid questions

 

[asadalam]

Heyyy

 

[Heyyy]

Heyyy View attachment 54042

Have they already filled the gaps or did you fill them?

 

[Heyyy]

Answer should be C

 

[asadalam]

Answer should be C

Yeah i got that one but can you explain these:

 

[shimmering star]

Answer should be C

Helloo!!
i just wanted to ask that the economics paper 3 that is our MCQ paper is on the 4 of june rite?
just confirming!!!!

 

[asadalam]

Helloo!!
i just wanted to ask that the economics paper 3 that is our MCQ paper is on the 4 of june rite?
just confirming!!!!

Yes P3 is on 4th.It should be stated on your statement of entry....

 

[shimmering star]

Yes P3 is on 4th.It should be stated on your statement of entry....

Yerp...thanks

 

[Heyyy]

Yeah i got that one but can you explain these:View attachment 54047 View attachment 54048 View attachment 54049

A) devaluation of currency would mean imports becoming more expensive thus imported inflation(wrong choice)
C) same as A
D) the removal of import tariffs won't help lowering BOP deficit.

Q24.
Decrease in taxes and increase in investment will shift the demand curve to right.
A decrease in tariffs will increase imports by not much as still tariff remains.
Answer should be D

Q5
Apply all the options.The one which stands true will be the answer

 

[Heyyy]

Helloo!!
i just wanted to ask that the economics paper 3 that is our MCQ paper is on the 4 of june rite?
just confirming!!!!

Yes
AM paper

 

[asadalam]

A) devaluation of currency would mean imports becoming more expensive thus imported inflation(wrong choice)
C) same as A
D) the removal of import tariffs won't help lowering BOP deficit.

Q24.
Decrease in taxes and increase in investment will shift the demand curve to right.
A decrease in tariffs will increase imports by not much as still tariff remains.
Answer should be D

Q5
Apply all the options.The one which stands true will be the answer

In 24,shouldnt it be B,as net exports will still fall and cause reduction ,even if its a small amount.D would lead to people getting higher disposable income and hence increase AD.Dont you think?

And in 5 i calculated the percentage changes and initially sales increased faster than price change but by the end change had no effect on price like on both 12 and 10 the total revenue recieved and hence the sales were the same.