C3 : SET 1 - DETERMINATION OF NATIONAL INCOME EQUILIBRIUM

If saving exceeds investment, then the level of income must ____________.

• increase

• remain constant

• decrease

• rise above potential income

The marginal propensity to save is the proportion of ___________________.

• disposable income which is invested to earn interest.

• national income which is not spent on consumer good.

• national income that not spent on consumer goods which is invested.

• changes in national income which is not spend on consumer goods.

Which of the following equations is a condition of national income equilibrium in a three sector economy?

• Investment = Savings

• Export = Imports

• Investment + Government Expenditure = Savings + Taxes

• Investment + Government Expenditure + Exports = Savings + Taxes + Import

If the consumption function is is given as C= 2500 + 0.75Yd, the savings function is _________________.

• - 2500 + 0.75Yd

• 2500 + 0.25Yd

• 2500 – 0.75Yd

• - 2500 + 0.25Yd

Which of the following is NOT injection or leakage in circular flow of income in a closed economy?

• Investment

• Taxes

• Consumption

• Savings

C = 50 + 0.8Yd G =80

I=70 T=100

Calculate the national income equilibrium__________________.

• 600

• 1800

• 1600

• 1000

Calculate the amount of consumption when national income is 600.

• 455

• 450

• 405

• 460

In a circular flow of income in a closed economy with government intervention, leakages consist of ___________________.

• investment and savings

• savings only

• savings, taxes and imports

• savings and taxes

When foreign sectors are included in calculating national income by using expenditure approach, the equation for aggregate income is _________.

• Y=C+S+T+(X-M)

• Y=C+S–T–(X+M)

• Y=C+I+G+(X–M)

• Y=C+I+T+(X+M)

If you earn additional RM500 in disposable income one week for painting your neighbour‟s house ______________.

• The total of your consumption and saving will increase by more than RM500

• The total of your consumption and saving will increase by RM500

• The total of your consumption and saving will increase by less than RM500

• Your consumption will increase by less than RM500