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ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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According to the Bangladesh Bureau of Statistics (BBS), the unemployment rate in Bangladesh is 4.20% of which 46% are university graduates. The rate of unemployment among people with tertiary level education has considerably risen. On the other hand, many foreigners mainly from India and Sri Lanka are working in various industrial sectors. This is happening because our local labor force lacks the required technical and managerial skills much-needed in this era of the Industrial Revolution. Thus, for Bangladesh to attain sustainable economic growth through the rise of potential GDP, it is imperative to improve the productivity of the workforce.

a) Describe the forces that might help the potential GDP of Bangladesh to grow using the concepts of the Aggregate labor market. Illustrate your answer with an appropriately labeled diagram.
b)Such an improvement in productivity and economic growth is followed by higher income and consumption. How do you think this will affect the price level and the real GDP of the economy? Depict your answer with an appropriate AS-AD diagram. 
c)A rise in income is associated with a rise in savings. If private savings rise, how should that change the conditions in the loanable funds market? Illustrate your answer with an appropriately labeled diagram.    

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