LECTURE 6 & 7

Macroeconomics is least concerned with

• unemployment

• the price of a particular good

• inflation

• business cycle

The business cycle follows the following pattern:

• Expansion phase, trough, contraction phase, peak

• Peak, expansion phase, contraction phase, trough

• Contraction phase, expansion phase, peaK, trough

• Trough, expansion phase, peak and contraction phase

Which has correctly identified the net injections into a country's circular flow of income?

• savings > investment

• exports > imports

• government expenditure > taxation

A country has the following items in its balance of payments:

 

What is the balance in trade in goods and services?

Items

($)

Exports of goods~ 120 million

Imports of services~ 60 million

Income flows and current transfers from abroad~ 80 million

Imports of goods~ 150 million

Exports of services~ 50 million

Income flows and current transfers going abroad~ 30 million

• Deficit of $30 million

• Deficit of $40 million

• Deficit of $20 million

• Deficit of $10 million

What is not included in the measurement of national income?

• dividends paid to shareholders

• overtime payments

• rents from government-owned houses

• welfare benefit payments

1.                Which of the following triggers a withdrawal from a country’s circular flow of income?

• A government budget surplus

• Bank loans to private companies

• Unemployment benefits

• The purchase of foreign goods by the country’s households

Gross Domestic Product (GDP) is

• The only tool to measure the nation’s social wellbeing

• A measure of the economic activity of the citizens and businesses.

• The total market value of all final goods and services produced within the nation in a one-year period.

• Equal to C + I + G + (M-X).

Which of the following will not cause the GDP to increase in Malaysia?

• Businesses spend more on capital in Malaysia

• Japan buys more wheat from Malaysia

• The federal government spends more on ships for the Navy.

• Malaysians buy more Mercedes cars from Germany

Which are macroeconomic goals?

• promote economic growth

• lower employed population

• prices stable

• stagflation

Using AD-AS analysis, what is the impact if the government allows Malaysians to withdraw EPF up to RM10,000?

• SRAS shifts to the right

• AD shifts to the right

• positive demand shock

• positive supply shock

• negative demand shock