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Assume that Malaysia is a closed economy without a government. Now under new leadership they decided to introduce government and taxation into the economy. Use the following information to solve the question.
Autonomous consumption = 2 000 million
Autonomous investment = 1 500 million
Autonomous government spending = 1 200 million
Full employment = 6 500 million
c = 0.65
t = 0.15
The multiplier is…… (round to 1 decimal)
Assume that the multiplier has a value of 3. Now assume that the government decides to increase aggregate demand in an attempt to reduce unemployment. It raises government expenditure by N100 million with no increase in taxes. Firms, anticipating a rise in their sales, increase investment by N200 million, of which N50 million consists of purchases of foreign machinery. How much will national income rise
Assume that the full-employment income level is higher than the equilibrium income level. Full employment can be reached if a)exports increase.
b)imports decrease.
c)the tax rate decreases.
a. All the statements are correct.
O b. a and c
c. a
O d. b
O e. c
The introduction of taxes to the Keynesian model...
O a. Increases investment spending at each positive level of income.
O b. Cause the slope of the consumption curve to become steeper.
O d. Causes the consumption function to shift parallel upwards.
O e. Causes the consumption function to shift parallel downwards.
O c. Flattens the consumption curve.
The introduction of taxes to the Keynesian model...
O a. Increases investment spending at each positive level of income.
O b. Cause the slope of the consumption curve to become steeper.
O d. Causes the consumption function to shift parallel upwards.
O e. Causes the consumption function to shift parallel downwards.
O c. Flattens the consumption curve.
Suppose an endogenous tax variable is introduced in our Keynesian model, what will happen to the size of the multiplier?
a. It will remain the same.
O d. The size of the multiplier and the tax rate are not related.
c. It will decrease.
O b. It will increase.
Assume that country A relies more heavily on imports than country B, while other macroeconomic conditions are the same. If there is a positive relationship between domestic economic activity and imports, then the multiplier of country A will be
O c. as large as country B's.
O b. smaller than country B's.
a. larger than country B^ prime s .
O d. uncertain.
Given the following information for a small open economy: C=R1 000+0,2Yd The government spending is R300, The proportional tax rate is 28%, Exports are R100, Z = R * 2O + 0, 1Y and Investment is R200.
Calculate the multiplier and equilibrium level of income.
O d. 1,60 and R2 528 respectively
O c. 1,85 and R2 923 respectively
O b. 1,32 and R2 086 respectively
O a. 1,05 and R1 659 respectively
Use the following information to answer question:
Autonomous ption = 1200
Government spending y = 1500
Y=5 000
c = 0.80
t=0\%
Total savings is...
a. -200
O b. 1000
O C. -1 200
O d. 200
Government ling=R500
rts: R300
Autonomous consumption =R200
Autonomous imports =0
Investment expenditure re=R100
Marginal propensity to consume =0,6
Marginal propensity to import =0,1
Proportional tax rate = 0, 25
Aggregate autonomous expenditure (A) is equal to
O a. R200.
O b. R300.
O c. R500.
O d. R800.
e. R1 100.
