Question8: Supposethefollowingarenationalaccounting dataforagivenyearforMalaysia…


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Question8: Supposethefollowingarenationalaccounting dataforagivenyearforMalaysia… 1 answer below » Question8: Supposethefollowingarenationalaccounting dataforagivenyearforMalaysia (hypotheticaldata). Amount (BillionsofRM) Consumptionoffixedcapital 285 Grossprivatedomesticinvestment 725 Government consumption expenditures 720 Government investment expenditures 165 Imports -550 Exports 625 Household consumptionexpenditure 3010 Netpropertyincomepaidoverseas -35 (a) CalculateGDPandthecountry’sgrossnationalexpenditure usingtheexpenditureapproach; (b) Derivethecountry’sgross View complete question » Question8: Supposethefollowingarenationalaccounting dataforagivenyearforMalaysia (hypotheticaldata). Amount (BillionsofRM) Consumptionoffixedcapital 285 Grossprivatedomesticinvestment 725 Government consumption expenditures 720 Government investment expenditures 165 Imports -550 Exports 625 Household consumptionexpenditure 3010 Netpropertyincomepaidoverseas -35 (a) CalculateGDPandthecountry’sgrossnationalexpenditure usingtheexpenditureapproach; (b) Derivethecountry’sgross national product(GNP); (c) Derivethecountry’snetnationalproduct(NNP); (d) Derivethecountry’scurrentaccountbalance; (e) Derivethecountry’sgrossnationalsavings. (2markseach) Question9: (2.5markseachpart) Usingtheaggregatedemand-aggregatesupply(AD-AS)diagram,showhowthefoureconomic eventswouldaffecteconomic activity,thepriceandemploymentlevels.(Note:useaseparateAD­ASdiagramforeachevent) (a) Adecrease inpersonalincome tax; (b) Anincreaseinworkforce skillsthroughspecialtrainingprograms; (c) Andecrease inexports; (d) Anincreaseinaneconomy’scapitalstock. Question10: (a) DescribethreeproblemsofusingfiscalpolicytoachieveapreciselevelofGDP. (3marks) (b) Why is frictional unemployment inevitable in an economy characterised by imperfect jobinformation andnon-zerojob-search time? (3.5 marks) (c) Isstructuralunemploymentsomethingmacroeconomicpolicymakersshouldbeconcernedabout?Howdoesitdiffer fromcyclicalunemployment?(3.5marks) (10 markstotal-5markseachpart) (a) Illustrateandexplainwithdiagramsthedifferencebetweendemand-pullandcost-push inflation; (2.5marksforthediagramand2.5marksfortheexplanation) (b) Provide(describe)two(2)causesofeachtypeofinflation (2.5marksfor2demand-pullcausesand2.5marksfor2cost-push causes) Question 12: (a) IftheBankNegaraMalaysiasoldRM800millionofgovernment securitiestoprivatesectormoneymarkets,holding otherthingsbeingheldconstant, whatistheeffect on: (4marks,ie.1markeach) (i) Theeconomy’smonetarybase; (ii) Short-termmoneymarketinterest rates; (iii) Longer-termmaturity interestrates; (iv) Aggregatedemand ,economicactivity andinflation. (b) Explainwhathappens(ifanything)totheeconomy’smonetarybasewhentheBankNegaraMalaysiasellsRM800millioninforeign currencytooneofthebanksoperatinginthecountry.(3 marks) (c) Whichpolicyismoreexpansionary: RM200billion increaseingovernmentspendingforgoodsandservicesoraRM200billioncutintaxes? Explainwhy. (3marks) Question13: TheKeynesianandMonetaristschoolsofthoughtdiffersomewhat. (a) Whyistheshapeoftheaggregate supplycurveimportanttothedebatebetweentheKeynesians andMonetarists? (2marks) (b) Iftheinvestmentdemandcurvewasvertical,whichviewofmonetarypolicy(i.e.KeynesianandMonetarist)impactoninvestmentspending, aggregatedemand,andeconomicactivitybemorecorrect?(4marks); (c) Explainhowtheydifferregardinganincreaseinthemoneysupplycausing inflation;(4marks) 3 The followingdiagramshowsademand curveandsupply curveoftheAustralianDollarsagainsttheJapaneseyen. ¥I A$ 110 1 00 90 80 70 D 60 Q ofAustralia ndollars (a) Whoisdemanding Australiandollarsintheforeign exchangemarketand for whatpurpose? (b) WhoissupplyingAustraliandollarsintheforeignexchange marketandforwhatpurpose? (c) Marktheequilibriumexchange rate. (d) Nowillustratetheeffectofanincreased demandfordollarsandadecreasedsupply. (e) Hastheexchangerateappreciatedordepreciated?…………………. Appreciated I Depr eci ated (2markseach) Atta…

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