NEI 2.0

In a circular flow of income in two-sector economy, injection consists of ___.

• taxes

• savings

• investment

• consumption

In a circular flow of income in a two sector economy, leakage consists of savings and investment.

• TRUE

• FALSE

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

• RM2,800

• RM3,600

• RM7,200

• RM9,000

In a two sector economy, the savings function is S=-106 + 0.5Y and investment is RM24 million. Determine the national income equilibrium.

• RM120 million

• RM164 million

• RM260 million

• RM 310 million

In a two sector economy, when national income is zero,

households incur household expenditure of RM100 million. If the marginal propensity to consume is 0.25, determine the national income equilibrium if the public sector investment is RM20 million.

• RM90 million

• RM120 million

• RM160 million

• RM480 million

The savings functions is written as S = -230 + 0.45Yd. Find the value of autonomous savings and marginal propensity to consume.

• a = -230, MPC = 0.45

• a = -230, MPC = 0.55

• a = 230, MPC = 0.45

• a = 230, MPC = 0.55

The consumption function is written as C=120 + 0.7Yd. Derive the new savings function.

• s = -120 +0.7Yd

• s = -120 + 0.3Yd

• s = 120 + 0.3 Yd

• s = 120 + 0.7Yd

Given the following information:

i. Autonomous consumption = RM100 mill

ii. MPC = 0.7

iii. Autonomous investment = RM500 mill

Find the national income equilibrium.

• RM3000

• RM3500

• RM2000

• RM2500

• Y = 2000
  

• Y = 0.75
  

• Y = 100
  

• Y = 1000
  

• Z = 100

• z = 200

• z = 300

• z = 400