C3 : SET 2 - DETERMINATION OF NATIONAL INCOME EQUILIBRIUM

If Ali received a RM2500 bonus and her MPS is 0.20, her consumption rises by RM______and her saving rises by RM _______.

• 500 ; 100

• 2500 ; 200

• 2000 ; 500

• 2500 ; 20

In two sector, saving function is S = -250 + 0.2Y. Investment function is I = 20. Determine the national income equilibrium.

• 2000

• 1350

• 2500

• 2750

Which of the following statement is the factor of leakage in circular flow of income?

• Export

• Savings

• Households consumption

• Government expenditures

In an economy with a foreign trade sector but no government sector, national income will be in

equilibrium if _____________________.

• S=I

• X=M

• S+I=X+M

• S+M=X+I

Average propensity to saving is___________.

• saving ratio to use

• the ratio of savings to income

• ratio changes and changes in tax savings equal to saving

• total change in savings due to a number of specific changes in income

National income must be at its equilibrium level when ______________.

• import equal export

• injections equal leakage

• saving equal investment

• indirect taxes equal subsidies

What is the meaning of ”equilibrium “in macroeconomics?

• Aggregate demand is more than aggregate supply

• Aggregate demand is less than aggregate supply

• Aggregate demand is equal to aggregate supply

• Total value of output produced is more than total value of expenditure

If consumption function is C = 250 + 0.75Y and investment is I = RM450, find the equilibrium income in this two sector economy.

• RM2800

• RM3600

• RM7200

• RM9000

In the circular flow of income, government spending and export are____________.

• injection and leakage respectively.

• leakage and injection respectively.

• components of aggregate supply.

• injection.

Two markets shown in the simple circular flow model are ______________.

• household and firms

• products and resources

• capital goods and consumer goods

• all of the above