National economy as a big household

 

A.1. Is it helpful to think of the national economy as a big household? Why or why not?

A.2. How might economic growth undermine economic development?

BLOCK B
Answer one of the following questions in no more than 400 words.

B.1. ‘Controlling inflation is a more important policy objective than ensuring full employment’. Critically assess this statement.

B.2. ‘Government should use fiscal policy to try to smooth out the peaks and troughs of the business cycle’. Critically assess this statement.

BLOCK C
Answer one of the following questions in no more than 400 words.

C.1. Imagine that you are economic advisor to the government of a middle- income developing country. Your government is trying to assess whether it should use protectionist policies to help domestic manufacturing industries to develop. Provide a summary of potential advantages and disadvantages of such policies, and a recommendation of whether they should be employed.

C.2. Imagine that you are economic advisor to the government of a high-income highly developed country. Your government is facing a persistent current account deficit (every year for the past 20 years) and is trying to assess whether this can be maintained indefinitely. Evaluating the benefits and risks of a sustained current account deficit, advise the government what its long-term objectives should be for its balance of payments.

 

Sample Solution

Household production is the creation of goods and services for personal use by members of a household, utilizing their own capital and unpaid labor.
Housing, meals, clean clothes, and child care are examples of goods and services generated by households for their own use.
The translation of purchased intermediate commodities (such as supermarket goods and power-utility electricity) into final consumption commodities is part of the household manufacturing process (meals and clean clothes). Households employ their own resources (kitchen equipment, tables and chairs, and kitchen and dining room space) and labor (hours spent in shopping, cooking, laundry and ironing)

Possibility based hypotheses of authority propose that there is no right or most effective way to lead a gathering, or association, because of the huge number of imperatives on a circumstance (Flinsch-Rodriguez, 2019). Fiedler, in his Contingency Theory of Leadership (Fiedler, 1967), recommends that the viability of a gathering is reliant upon the administration styles of the pioneer and their favourability to the circumstance. A significant part of the hypothesis is laid out around the most un-favored associate scale (LPC). The LPC expects to evaluate a potential chiefs way to deal with an undertaking on a size of relationship inspired to task spurred, where the pioneer fits on the scale permits what is going on to be derived, and in this manner permits the distinguishing proof of reasonable pioneers for errands. The favourableness of the circumstance relies upon three attributes: pioneer part relations, the help and trust the pioneer as from the gathering; task structure, the lucidity of the errand to the pioneer; and positional power, the power the pioneer needs to evaluate a gatherings execution and give prizes and disciplines (Fiedler, 1967). In the event that the pioneers approach matches what is expected from going on, achievement is anticipated for the gathering. Fiedler’s possibility model offers an exceptionally severe categorisation of initiative, obviously characterizing which circumstances endlessly won’t bring about progress for a likely pioneer. At the senior administration level of a hierarchal construction inside an association the hypothesis can be applied unreservedly, right off the bat because of the straightforwardness at which people can be supplanted in the event that their LPC score doesn’t match that expected of the circumstance (Pettinger, 2007). Besides, and in particular, is to guarantee that the senior administration are ideally suited to effectively lead the association. Nonetheless, further down the ordered progression Fielder’s possibility hypothesis starts to hold substantially less significance, it becomes unreasonable according to an authoritative viewpoint because of the quantity of individuals at this degree of administration. The operations of coordinating the pioneer with their most un-favored colleague I

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