Tuesday, July 14, 2009

How to deal with this question with the aid of supply-demand diagram?

a government offical said,%26quot;With the completion of hong kong disneyland,the unemployment rate of hong kong is going to drop further.Explain the above point.



How to deal with this question with the aid of supply-demand diagram?va loan





In theory, the presence of a Disneyland will attract more overseas tourists to come into HK, which means that consumption in the economy will be stimulated. Firms increase output to meet rising demand, which requires more employment; a greater number of workers are needed to produce a greater level of output. In the labour market the demadn curve has shifted to the right [demand increases], which causes the equilibrium employment level to increase. Also, due to the increased demand from increasing tourist volumes Aggregate Demand in the economy increases. So on an AD AS [Aggregate Supply] graph the AD curve moves right, which pushes up the price level [inflation increases].



Hope this helps (I%26#039;m from HK too!).

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