ECO404 Assignment 1 Solution and Discussion
SEMESTER SPRING 2020
MANAGERIAL ECONOMICS (ECO404)
DUE DATE: 08TH JUNE, 2020 MARKS: 15
According to the report of Asian Development Bank (ADB) Pakistan could have to face low economic growth rate during 2020 due to COVID-19. In 2019 economic growth rate was 3.3 percent while in 2020 it is projected to be 2.6 percent. Inflation will remain 11.5 percent as said in report. The lockdown situation in the country, to control COVID-19, has dampened consumer’s demand and private businesses badly. State bank of Pakistan has raised its policy interest rate to 12.25 per cent at the end of FY2019 to counter inflationary pressures. As now the decline in oil prices and expected slow demand under COVID-19, the State Bank of Pakistan reduced interest rate to 11 per cent in March 2020. ADB report predicts that inflation rate would be 8.3 percent in 2021. There is a strong direct relationship between inflation and economic growth. Supposed data of economic growth and inflation rate is given in the following table.
(a) Keeping in view the above given table fill the required field.
(b) If calculated value of “t” is greater than tabulated value of “t”, what does it mean?
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