Explain what is meant by market equilibrium and analyse the effects on the equilibrium price and quantity of; The introduction of a new, cost-saving technology and an increase in the price of a complementary good

The market is defined as that place where buyers and sellers come together to exchange goods and services for a particular price and quantity. It consists of both demand and supply. Demand representing consumer behaviour and supply represent firm behaviour. [Diagram demonstrating equilibrium] a. Introduction of a new, cost saving technology. This causes the supply

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Define unemployment and explain how it is measured

The unemployed are those individuals who do not currently have a job and who have actively looked for work in the last 4 weeks (International Labour Organisation). Individuals who looked for work in the past beyond 4 weeks but are not looking currently are not counted as unemployed. The employed are individuals who currently have

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List and explain the determinants of Demand, distinguishing between the movement along a demand curve and a shift in a demand curve. Use diagrams as appropriate

The Law of Demand states that the quantity of a good demanded will fall as its price rises and will rise as the price falls – all things being equal. Quantity demanded of a good is therefore inversely related to price. The determinants of Demand are: • Price of the good itself. • Price of

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Explain how it is possible for the banking sector to create purchasing power and the factors that determine the amount of (or the limits to) the amount of purchasing power that they can create. Make reference to Rwanda or another economy with which you are familiar

When a bank accepts a deposit and subsequently grants a loan it is not merely transferring purchasing power from lenders to borrowers but rather, because of the fractional reserve system, it can lend out a multiple of the original deposit and in this way actually create purchasing power. When a bank receives a deposit for

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