1

1.1. Option 3

Frictional unemployment is the unemployment resulted when people look for better jobs and do not accept the available jobs. So, here graduates who are looking for jobs would not accept the available jobs and look for the better opportunities.

2. Option 5

Real interest rate = Nominal interest rate - expected inflation rate = 45% - 32% = 13%

2. When we talk about terms of trade ,we are talking about price of exports in relation with imports,it can be said to be ratio of exports to imports,now when country y imposes tariff on imports, country x 's value of exports goes down and so does its terms of trade ,that is now it can have less of imports in relative prices of what it earn from exports,while for country y,its terms of trade will increase as it is paying lesser import prices in terms of exports.

When we talk about economic welfare, we talk about impact of such decisions at aggregate level of a nation combining different stakeholders such as consumers,producers etc,whether decision is efficient or not,so when we look at country y which has imposed an import tariff, state will have more revenue,its domestic producers will gain too owing to less competition from outside producers and can increase their price but for consumers this is a losing situation as they end up having lesser choices and have to pay more,so in terms total welfare all gains and losses will have to be summed and can differ based on country, product,tariffs etc. but consumer loses in such decisions while governments and domestic producers gain.For exporting country x ,its state has lesser revenue from exports,its producers loses while its consumers gains owing to lesser export opportunities for domestic producers leading to lowering of prices and more availability of good.

3.In the crude oil Futures market, the primary commercial sub-category is dealers or merchants. This includes exporter-importers, wholesalers, and crude oil marketers. Manufacturer dealers or merchants include fabricators or refiners ? including commodity swap dealers and producers. This includes broker dealers, swap dealers, arbitrageurs. Financial swap dealers are arbitrageurs. There is another category termed commodity swap dealers. These traders are also termed as traditional hedgers.

Speculators meet the hedging demand in the marketplace. Speculator position changes have a systematic effect on the futures market prices. Those with an exposure to the physical commodity are called hedgers. Speculators do not have a physical position to offset. Speculators and hedgers both contribute to hedging in the futures markets.

Certain kinds of speculators are scalpers or markets makers; day traders, or, trend followers. Market makers or scalpers work on the shortest time horizon. These are not for price setting but for market making; buying or selling as the prices appear - buying contracts at low prices, and, selling at higher prices. These speculators make profit by trading in thousands of contracts a day. Day traders, and, trend followers take positions on prices in the next few hours, and, years respectively. Speculative trading can increase prices if the inventories accumulate.