Economics
Factor Mobility and Banking Decisions
- 1.
In a fictional economy, a qualified electrician can do the same electrical work in another town but cannot afford the moving costs and higher local rent. A second worker lives beside a laboratory with vacancies but lacks the technical qualification needed for its jobs. Identify the kind of labour immobility most directly illustrated by each case. Propose one matched measure for each barrier and explain why offering the first worker a laboratory qualification, or paying the second worker's moving costs, would not directly solve the stated problem. Assume both workers want the available work.
[4 marks] · no calculator - 2.
A fictional textile firm owns a specialised loom that can be transported to another town by lorry, but it cannot make bottled drinks without being replaced. Separately, a particular field cannot be moved to another district, but it can switch between wheat and grazing with suitable preparation. Define geographical and occupational mobility, then use the loom and the field to explain why ability to change location and ability to change productive use are different. Identify one practical influence on each proposed move or change of use. Treat the field itself as land and the produced loom as capital.
[6 marks] · no calculator - 3.
In an original classroom example, a household has $1000 in its commercial-bank account. Its employer pays $400 into that account, then the household instructs the bank to transfer $250 to an electricity supplier. There are no fees, interest or other transactions. Calculate the closing balance. Identify and explain two distinct commercial-bank services illustrated here, and one benefit of the payment service to the household. This is a fictional record, not an instruction to open, access or operate an account; no bank safety guarantee is assumed.
[4 marks] - 4.
For an original educational model, a fictional producer starts Monday with $900 cash and must pay $1200 for inputs that day. A customer is scheduled to pay $1600 on Friday. A commercial bank has already agreed to provide exactly the Monday shortfall as short-term credit, with principal repaid on Friday. Ignore interest and fees solely for this calculation, assume the customer pays as scheduled and assume no other flows. Calculate the credit required and Friday cash after principal repayment. Explain how the bank's lending role allows production before customer payment, and one reason the lender would check the receipt forecast. Do not recommend a real loan or assume these terms are available in practice.
[4 marks] - 5.
In a fictional economy, the Treasury holds an account at a commercial bank and instructs it to pay government employees' salaries into their personal bank accounts. The separate central bank sets the policy interest rate and provides settlement accounts for commercial banks. A learner claims that handling government salaries makes the first bank the central bank. Explain why that claim is incorrect. Identify the commercial-bank service used by government, one benefit for the employee receiving a salary, and one different role performed by the central bank. No real government or bank account is involved.
[4 marks] · no calculator