Macroeconomics Answers

Q.1.4 Company tax is a: (2) (1) Progressive, direct tax; (2) Progressive, indirect tax; (3) Proportional direct tax; (4) Regressive indirect tax.

Q.1.3 An increase in the budget deficit is the result of: (2) (1) Expansionary monetary policy; (2) Contractionary monetary policy; (3) Expansionary fiscal policy; (4) Contractionary fiscal policy.

Q.1.2 Money as a medium of exchange consists of: (2) (1) Demand deposits; (2) Debit cards; (3) Credit cards; (4) Cheques. Q.1.3 An increa

Q.1.1 In the circular flow of income and spending: (2) (1) Investment results in a decrease in the volume of the income flow; (2) Savings result in a decrease in the volume of the income flow; (3) Taxes result in an increase in the volume of the income flow; (4) Imports result in an increase in the volume of the income flow.

Automous consumption =100m

Investment spending =100m

Government spending 200milion

Export =150 million

Automous export =100 million

Marginary propensity to consume =1/3

Taxes rate is 1/10

Marginary propensity to import 1/10

YF=2150 million

Questions 1.1 culculate the level of Automous spending in the country

1.2calculate the size of multiplier

1.2 calculate equilibrium level of the income

Distinguish between active balances and passive balances and mention the main (6)

determinant of each.

Distinguish between active balances and passive balances and mention the main determinant of each. (6)

Explain how South African Reserve bank can accommodate policy to keep inflation under control and in this way meet its inflation targets

Distinguish between active balances and passive balances and mention the main determinant of each.

 Robinson Crusoe produces upper-loop product of $1000. He pays $750 in wages, $125 in interest, and $75 in rent. What must his profi t be? If three-fourths of Crusoe’s output is consumed and the rest invested, calculate Crusoeland’s GDP with both the product and the income approaches and show that they must agree exactly.