QUESTION TWO (25 MARKS)

a)Explain TWO (2) factors that cause a shift of labour supply curve to the right.

(4 markah/marks)

b) Explain the impacts of Industrial Revolution 4.0 (IR 4.0) on the equilibrium levels of employment and wage rate using labor market diagram.

(6 markah/marks)

c)Based on the AS-AD framework, explain and demonstrate the effect of the following situations on the equilibrium income and price levels:

i) TheCentral Bank sells government securities to the public.

(5 markah/marks)

ii)A tax reduction due to Covid-19 pandemic.

(5 markah/marks)

iii)An increase in the cost of imported goods that are used as inputs for domestically produced products.

(5markah/marks)