Determination of Natinal Income Equilibrium

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

• Investment

• Taxes

• Consumption

• Savings

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)

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

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