CHAPTER 7, 8 AND 11

Which of the following is a macroeconomic statement?

• A. The gross profits of all Malaysian businesses were RM10 billion last year.

• B. The price of chicken declined by 1% last year.

• C. Proton’s profits increased in year 2007.

• D. The productivity of manufacturing workers increased by 2% in 2006.

These are all macroeconomic objectives except

• A. To achieve price stability.

• B. Safe environment.

• C. To achieve economic growth.

• D. To achieve a Favourable balance of payment.

_________ is not a macroeconomic objective.

• A. Favourable balance of payment.

• B. Price stability.

• C. Free education.

• D. Economic growth.

All of the followings are regarded as injections into the circular flow of income of a particular country except

• A. Purchase of domestic goods by foreign countries.

• B. Purchase of foreign products.

• C. Investment expenditure by business firms.

• D. Government purchase of local goods.

Gross investment minus depreciation is

• A. private investment

• B. the change in business inventories

• C. the capital consumption allowance

• D. net investment

Profits earned in Malaysia by foreign-owned companies are included in

• A. both GDP and GNP

• B. neither GDP nor GNP

• C. GNP but not GDP

• D. GDP but not GNP

National income accounting differentiate between final and intermediate products in order to avoid the problems of

• A. Inflation

• B. Depreciation

• C. Double counting

• D. Wrong information

8. The circular flow of income for a two sector model shows

• A. The flow of income to the household and government sectors

• B. The flow of income between the household and business sectors

• C. The flow of income between the household, business and government sectors

• D. The flow of income between government and business sectors

Gross Domestic Product (GDP) measured in terms of the price of the base year is

• A. Nominal GDP

• B. Current GDP

• C. Real GDP

• D. Base GDP

the total value of all income earned by Malaysian is called

• A. national income

• B. gross domestic income

• C. income paid abroad

• D. gross national product