Chap 3 and 4

If (I + G + X) exceeds (S+T+IM) then the national income will ..................... towards the equilibrium

• increase

• decrease

• remain constant

• rise above potential income.

Disposable income can be written as

• C + I G+ T

• C= S+ I

• C + S = I

• Y-T

When disposable income increases , average propensity to consume will ..............

• increase

• decrease

• remain constant

• either increase or decrease depending on the size of autonomous consumption

Leakages in circular flow of income refer to

• exports saving and taxes

• savings taxes and imports

• government spending exports and imports

• investment government spending and exports.

a firm spends an additional RM150 million on investment projects in 2023.. how will this impact the national income., if the multiplier is 2

• NI will increase by 350million

• NI will increase by 300m

• NI will increase by RM150m

• NI will increase by RM50m

if the MPC is 0.6, and consumption increases by RM6 mil, what is the change in the real GDP

• It decreases by 10m

• it decreases by RM15m

• it increases by RM10m

• it increases by RM15m

if an increase of RM100m in investments generates an increase of RM500m in real GDP, the multiplier is ................

• 20

• 50

• 1.5

• 5.0

if the consumption function is C= 250 +0.7Y and investment is I = RM450. find the equilibrium income in this 2 sector economy

• rm2800

• rm3600

• rm7200

• rm9000

Which of the following statements is the best definition of a multiplier?

• the equilibrium national income divide by changes in taxes

• the equilibrium national income divided by aggregate expenditure

• change in aggregate expenditure divided by change in equilibrium national income

• change in equilibrium national income divided by change in aggregate expenditure.

given the change in equilibrium national income is RM2000 and initial change in investment expenditure is RM400. The MPS and MPC are ....... and ........ respectively.

• 0.2; 0.8

• 0.8;0.2

• 0.5; 0.5

• cannot determine due to limited information.