(Solved): 5. A small country Osama with agriculture as the main driver of its economy has been hit by a droug ...

5. A small country Osama with agriculture as the main driver of its economy has been hit by a drought. The households expect their wealth to be negatively impacted in the medium term. \( 5.1 \) Use the concept of precautionary savings to explain how the HH of Osama could respond to these negative expectation about the impact on their future wealth? ( 3 marks) 5.2 How would the HH's behaviour impact the AD curve for Osama?(2marks)