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Explain carefully why the tax multiplier [ΔY/ ΔT = -b/ (1-b)] is negative and why it is smaller in absolute value than the government expenditure multiplier [ΔY/ ΔG = 1/ (1- b)].
In the simple Keynesian model, an increase of one dollar in autonomous expenditure will cause equilibrium income to increase by a multiple of this one dollar increase. Explain the process by which this happens using different approaches of explanations
Assume that Proton and Perodua will be working together through research and development in a joint project to produce an all-electric-vehicle for the Malaysians market. Suppose the project include building a new assembly plant based in Malaysia. Show on a graph the effect of Proton or Perodua going to the loanable funds market to finance the new assembly plant. Explain the effect on the real interest rate, private saving, and investment
What determines the demand for loanable funds?
In the simple Keynesian model, an increase of one dollar in autonomous expenditure will
cause equilibrium income to increase by a multiple of this one dollar increase. Explain the
process by which this happens using different approached of explanations
In the simple Keynesian model, an increase of one dollar in autonomous expenditure wil
cause equilibrium income to increase by a multiple of this one dollar increase. Explain the process by which this happens using different approached of explanations..
Elaborate on three ways in which water transport is significant to the development and growth of the South African economy.
. Identify and elaborate on any four current issues/challenges that are facing the motor carrier industry in South Africa.(5×4=20)
Mal administration of funds is one of the current issues confronting SAA. Identify and elaborate on three areas (e.g. employment) of the South African economy severely affected by the poor operational performance of SAA.
1) Assume that Proton and Perodua will be working together through research and development in a joint project to produce an all-electric-vehicle for the Malaysians market. Suppose the project include building a new assembly plant based in Malaysia. Show on a graph the effect of Proton or Perodua going to the loanable funds market to finance the new assembly plant. Explain the effect on the real interest rate, private saving, and investment.
(8 marks）
2) What determines the demand for loanable funds?
(4 marks)
3) What affect the demand curve of loanable funds and how does it change?
(4 marks)
4) What determines the supply of loanable funds?
(4 marks)
5) What affect the supply curve of loanable funds and how does it change?
(4 marks）
6) Explain the meaning of purchasing power parity. Give an example of what will happen when purchasing power parity does not hold in two economy.
7) What actions might the Bank Negara Malaysia take to stimulate business investment even more?
(4 marks)
8) Assume the economy has a natural rate of unemployment of 5%. Graphically illustrate when the actual inflation is 4% and expected inflation is 2%. What will happen to the economy when expected inflation adjust to the actual inflation in the long-run?
(4 marks)
