gold reaches record price of almost $1,900 per ounce was just one of the many headlines on the soaring price of gold in late 2011.The price of gold rose by 28% from $1,483 per troy ounce on 01 july 2011 to a high of $1,895 on 05 september.By 26 september it had fallen by 16% to $1598. Figure 1 shows the price of gold to be very volatile. In an essay of 1250 words or fewer, use economic analysis to explain changes in the price of gold and why the price of gold has proved so volatile.
reference from Griffiths and walls and Business Management third edition or any economics book
Answer all five questions below in 1250 words or fewer. The questions carry equal marks.
a) Show that, compared to perfect competition, monopolies reduce output and increase price. Does this mean that monopolies are always against the public interest? (8%)
b) Explain how the existence of externalities (whether from congestion or pollution) cause a less than optimal allocation of resources in road transport (8%)
c) Why might GDP not be a good measure of the level of welfare or economic activity within an economy? (8%)
d) What is meant by ‘the multiplier’? What determines its size and why does it matter? (8%)
e) Using Aggregate Supply and Aggregate Demand analysis explain the short- and long-run effects national economic output and prices of a reduction in government spending? (8%)
‘Gold reaches record price of almost $1,900 per ounce’ was just one of the many headlines on the soaring price of gold in late 2011. The price of gold rose by 28% from $1,483 per troy ounce on 01 July 2011 to a high of $1,895 on 05 September. By 26 September it had fallen by 16% to $1,598. Figure 1 shows the price of gold to be very volatile.
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