Based on the table, identify and explain the components of Aggregated Demand. Show the variation in the Components of AD over four years which contributes the maximum to the AD. [1+4= 5 Marks]

In the given table above, there are some components of aggregated demand include consumption, investment, export and annual version exports. According to this components, it can be noted that consumption is increasing and decreasing over the five years. But in 2018 the value of consumption is extremely low compared with 2014. On the other hand, investment is at highest value in 2016 and lowest in 2018. Moreover, the value of exports is highest in 2014 and lowest in the year 2016. In the last, the annual exports is lowest in 2015 but after this it started to increase and highest in 2018. Exports are contributing for maximizing the AD.

Question 2 From the table, relate Fiscal balance and Current account balance. Analyze why both show negative trend. [2+3= 5 Marks]

From the table it can be noted that, negative fiscal balance is causing the government to spend at high rate. Moreover, they are also taking lower tax from the public. Due to this fiscal deficit occurs and its means currency appreciation. According to this facts, the imports and exports of the country started to shrink. The value of imports started to decrease and affect the economy of country. Moreover, it will also cause excessive negative current account balance to the system furthermore, it will also provide problems to current account because they are linked with each other.

Question 3 What is the trend in the fluctuation of OMR exchange rate against Dollar? What is method used for fixing exchange rate against $ and how is related to the trend shown in the table. [Marks 2+3= 5 Marks]

According to the exchange rate trend, it can be observed that the exchange rate will remain the same over the five years. The value is about 0.39. Another thing is that there are different methods used for fixing the exchange rate against the dollar. But for relating the required trend buying and selling of own currency on the open market is used as ideal method. This is because according to the graph, the value of exchange rate remain the same throughout the 5 years. The only reason behind this is that they are buying and selling dollar at same rate.

Question 4 From the table we see that Trade balance is growing steadily but the Fiscal balance shows negative trend. Are these related variables or independent variables. What does it indicate about the AD and AS of Oman’s economy? [2+3= 5 Marks]

According to the given table above, it can be noted that Fiscal Balance and Trade balance variables are related with each other. This is because as the trade balance is decreased then fiscal balance is also decreased but showing a negative trend. Moreover, it is indicating many points related to the AD and AS of the economy of Oman. This is because if country is able to balance these variable then it will help the country to manage Aggregate demand and sales. This is because when trade is improving so the value of sales and demand also increased properly.

Question 5

According to the graph it can be noted that the minimum working age is about 20 years but there is no maximum working age. Now according to the given graph it will become easy to see the percentage of non-working population and it is given by

On the other hand, total population of Oman is about 4974991. Now according to this, it will become easy to calculate the population of non-working population. This is given by

This shows that 1333298 people are not working in Oman.

Question 6

According to the given facts, the people whose age is greater than 20 are fit for employment. This shows that only 26.8 % people are below than age 20 and they are not good for employment. Now calculate the working population of the area. It will become

If government of Oman wanted to improve the employment rate then they are required to take these measurements.

The government has to establish national centre for unemployment.

Increased work and spending with private sector (Group, 2015).

Question 7

It can be noted that the nominal GDP is showing the current market price value of the products over the whole time period. On the other hand, real GDP is showing total economic output produced at that time period in the same country but it is valued at pre-determined base market price.

Moreover, according to the economic data from the table one the inflation rate is given in percentage.  It can be noted that the value of inflation rate was highest in year 2017 and it is about 1.6. In that year the unemployment rate was 3.1. On the other hand, in 2015 the value of inflation rate is extremely low and it is about only 0.1 and unemployment rate was given by 3.5 at that time.

Question 8

According to the given graph, it can be seen that APC is greater than total at age 35-64. On the other hand, APS rate is also greater from this age group present in that particular group.

Now the next thing is that the variation of APC and APS is changes according to the age of the person. From this data it can be noted that the value of APC and APS is higher in the age of 45-54. Moreover, the value of APC and APS is lower in the age group of 65+.

Question 9

It is concluded that in the start of the employment rate, the salary of a person is low. Due to this APC and APS is low. After this as the age of the person is increasing then its income is also multiply then the value of APC and APS is also increased at certain age before retiring. The people are retired at the age of 65 so APC and APS value started to decrease again because the income multiplier is zero. The age group from 45-54 are sharing highest APC and APS values because their income multiplier is also high at that time.

Question 10

According to the given diversification trend it can be noted that from 2015 the non- petroleum items will started to increase more. Its value will move towards 70%. On the other hand, the manufacturing percentage will be change from 5-6 % in the next five years. In the last, the petroleum products will decrease more and it will become 25-24% in the next years (Al-Wahaibi, 2016).

References

Al-Wahaibi, M. (2016). he Journey of Oman with Economic Diversification.

Group, O. B. (2015). The Report: Oman 2015. Oxford Business Group.