Question 8:

Suppose the following are for a given year for Malaysia (hypothetical data).

Amount

(Billions of RM)

Consumption of fixed capital

285

Gross private domestic investment

725

Government  consumption  expenditures

720

Government  investment  expenditures

165

Imports

-550

Exports

625

Household  consumption expenditure

3010

Net property income paid overseas

-35

  1. Calculate GDP and the country’s gross national expenditure using the expenditure approach;
  2. Derive the country’s gross national product (GNP);
  3. Derive the country ‘s net national product (NNP);
  4. Derive the country’s current account balance;
  5. Derive the country’s gross national savings. (2 marks each)

Question 9:

(2.5 marks each part)

Using the aggregate demand – aggregate supply (AD-AS) diagram, show how the four economic events would affect economic activity, the price and employment levels. (Note: use a separate AD­ AS diagram for each event)

  1. A decrease in personal income tax;
  2. An increase in workforce skills through special training programs;
  3. An decrease in exports;
  4. An increase in an economy ‘s capital stock.

Question 10:

(a)     Describe three problems of using fiscal policy to achieve a precise level of GDP.  (3 marks)

  1. Why  is  frictional  unemployment  inevitable  in  an  economy  characterised  by  imperfect  job information and non-zero job-search  time?  (3.5 marks)
  2. Is structural unemployment something macroeconomic policymakers should be concerned about? How does it differ from cyclical unemployment ? (3.5 marks)

(10 marks total – 5 marks each part)

  1. Illustrate and explain with diagrams the difference between demand-pull and cost-push inflation;  (2.5 marks for the diagram and 2.5 marks for the explanation)

 

“Is this question part of your assignment? We Can Help!”

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"