Real Life Examples

Question 1

Increase in supply

Answer 1

Newly found oil deposits

Question 2

Decrease in supply

Answer 2

Drought, reducing crop yields of cocoa plants in Ghana

Question 3

Increase in demand

Answer 3

Successful marketing campaign for a new soft drink: changes in consumer preferences

Question 4

Decrease in demand

Answer 4

Moral reasons: Starbucks of corruption and tax evasion reduces demand

Question 5

Merit goods

Answer 5

Public libraries

Question 6

Demerit goods

Answer 6

Alcohol, cigarettes, drugs

Question 7

Substitutes

Answer 7

Coke and Pepsi

Question 8

Complements:

Answer 8

Coffee machines and coffee pods

Question 9

Inferior

Answer 9

Own brand groceries

Question 10

Luxury

Answer 10

Fine wine

Question 11

Necessity/commodity

Answer 11

Food, water, shelter, medicine/healthcare

Question 12

Interventionist Supply side policies

Answer 12

• Norway spends 7.6% of its budget
• Singapore offering Jobs Support Scheme to SMEs during COVID-19
• Supporting emerging industries: Pakistan is looking to double its IT industry in two years by setting up dedicated tech zones across the country

Question 13

Income and wealth distribution

Answer 13

• US, 2020: richest 0.1% own over 20% of the country’s wealth and top 1% owns over 40% of wealth
  Three richest Americans held more wealth than the bottom 50%
• England: less than 1% owns more than half of England (about 25000 of landowners)
• World: top 1% owns half of the world’s wealth. The bottom 50% owns less than 2% of the global wealth

Question 14

Expansionary Fiscal Policy

Answer 14

American Recovery and Re-investment act (2009)
The US govt included a stimulus package in response to the great recession

Question 15

Quantitative Easing

Answer 15

Abenomics (2012 - 2018)
fiscal + monetary policies
aimed at stimulating growth and ending deflation

Question 15

Fall in taxes

Answer 15

GST Tax in India (2019)
Indian govt cut the GST on a number of goods to boost consumer demand and stimulate

Question 16

Fiscal budget cuts

Answer 16

Canadian Federal Governments Budget Cuts (1995)
- to reduce the budget deficit
- stabilising govt. finances
- PM Jean Chrétien

Question 17

Austerity

Answer 17

Austerity measures in Greece (2010 - 2018)
Reducing government spending and increasing revenue
- cuts to public sector wages and pensions
- cuts to public sector wages and pensions
- increasing taxes
- privatisation of state-owned assets
-

Question 18

Unemployment benefits

Answer 18

US providing unemployment benefits during COVID 19

-> by feb 2021, over 19 mill were receiving unemployment benefits

Question 19

Public works programs

Answer 19

China - infrastructure investment, to create jobs + stimulate economy

in response to 2008 global financial crisis, chinese government launched a massive stimulus program

creating jobs and supported economic growth

Question 20

Fiscal policy for unemployment

Answer 20

Spain - wage subsidides
direct aid to businesses during COVID 19

NOV 2021 -> unemployment reate was 14.8%

Question 21

Active labour market policies

Answer 21

Germany introduced a vocational training system, combines classroom education with on-the job trainig
esp helpful w youth

2020 german unemploymnet was 5.8% as opposed to the euro area average of 15.4%

Question 22

Monetary policy for unemployment

Answer 22

Australia -
RBA during covid 19 lowered interest rates to increase availabilty of credit

DEC 2021 - 4.2%

Question 23

Taxes on demerit goods

Answer 23

‘sin taxes’ on alcohol and tobacco products
tax revenue has been used to fund health programs

Question 24

minimum pricing for demerit goods

Answer 24

Scotalnd - targets the cheapest, strongest alchoo profucsts 2018 has been effective in reducing alcohol consumption in heavy drinkers

Question 25

demerit goods - education

Answer 25

Australia - range of health education campaigns tobbaco + alc changing attitudes, mass media campaigns, school-based programs, community outreach initiatives

Question 26

monopoly power - laws

Answer 26

antitrust laws in US 1890 break up monopolies in oil, telecommunications and software

Question 27

monopoly power - laws eu

Answer 27

Merger control laws 2023/2024 prevent companies from merging in a way that would create a monopoly or significantly reduce competition esp in pharmaceuticals, telecomms, energy

Question 28

monopoly power - japan

Answer 28

price regulatioin in industries such as electricity and gas kepps prices in check, been credited with reducing the cost of living for conumers

Question 29

monopoly power - nationalisation

Answer 29

Bolivia nationalised oil and gas has given the govt, more control over industries and reduced the power of foreign companies increasing govt. revenue

Question 30

monopoly power - competition authorities

Answer 30

SA established a competition commison w the country's competition act in 1998/1999 preventin anti competitive behaviour particularly in banking, telecommunicatoins, food + beverage promoting competitino and reducing monopoly power