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HHW FM 5 Economics SGT

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GOOD SHEPHERD INTERNATIONAL SCHOOL


Holiday Home Work, Dec. 2022

CLASS: FM V ECONOMICS Marks: 40


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Name of Candidate: Roll Number: Section:

Instructions:
The assignment has to be hand-written
Answer the questions in A 4 size papers and spiral bind it, if possible.

Activity no.1: Who is driving all the taxis?

A survey of 50,000 taxi drivers in Canada found that 200 were doctors and that 20% of
the drivers had university first degrees or master’s qualifications. The work was carried
out by the Canadian government who were looking at the lives of immigrants who enter
Canada and end up being underemployed because it is difficult for them to find work in
the profession they are qualified in. The reason for this is often because of the cost of
obtaining the formal qualifications needed to work in Canada. For an immigrant to work
as a doctor in Canada they need to pay a significant sum to get the necessary
credentials.

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Many taxi drivers in Canada can find it difficult to make a living wage because of the
number of drivers in particular areas. The arrival of Uber has seen a dramatic increase
in taxis in particular areas and has seen the amount drivers can earn fall to very low
levels. As one driver said ‘you can be working 50 to 60 hours a week and making very
little money, if I could find something else I’d do it’.

Question 

(a) Explain three problems of measuring unemployment in a country like


Canada. [6]
(b) Research the taxi market where you live to see if the underemployment
experiences of the Canadian taxis drivers is true. [4]
(c) Can you suggest government policy to solve the problem mentioned in the
article? [4]

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Activity no.2 : How structural unemployment occurs?

Some people in the camera market called it the "Kodak moment" when in 2012 the giant
US camera and film manufacturer finally closed its doors and filed for bankruptcy. 130
years ago a ‘not especially gifted’ high school drop-out, George Eastman, started the
camera business that dominated photography for much of the next 100 years. The
recession that followed the global financial crisis did not make trading for Kodak easy
and the business struggled to adapt to digital photography. But it was the emergence of
smartphones with high-quality cameras that were the final blow that pushed Kodak ‘over
the edge’.

The failure of the firm led to the closure of 13 factories and 130 processing labs along
with 47,000 job losses. Kodak is an example of how structural unemployment occurs
when a market changes because of advances in technology.

Questions 

a. Using the business cycle diagram, explain when you would expect to see a rise
in cyclical or demand deficient unemployment. [4]

b. Explain the difference between frictional and structural unemployment. [8]

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Activity no.3 : The falling Ruble increases inflation

Russia’s Ruble fell to 69.40 against the dollar yesterday reaching a two-year low.  The
falling price of oil combined with the threat of US sanctions have been drivers of the
Ruble’s depreciation. The fall in the currency has had a big impact on business costs for
Russia’s manufacturing sector.

As the Ruble has fallen the price of imported raw materials and components has
increased significantly and this has led to rising prices and a spike in inflation. Even
service sector businesses that do not import inputs directly are experiencing rising costs
as a knock-on effect from the higher input prices charged by manufacturers.

Questions 

a. Define the term costs push inflation.

[2]

b. Using a diagram explain how a fall in the value of the ruble on foreign
exchange markets can lead to inflation. [4]

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c. Research other countries that have experienced significant currency


depreciation to see whether this has led to a rise in inflation. Write a report on
your research findings. [8]

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