ECMD223 Principles of Macroeconomics

TUTORIAL 1:
INTRODUCTION TO MACROECONOMICS

Name: Marks:
ID:
Section:

1. State whether the following is studied in Microeconomics or Macroeconomics.

a) The impact of the increase in the income tax rate on the demand of a product by
consumers.
b) The policies that should be implemented when the economy is experiencing recession.
c) Calculation of the change in the overall price level in an economy from year to year.
d) The revenue obtained and costs incurred in the production of a particular product.
e) The sources of government revenue and how the revenue are spent.

2. Explain on three macroeconomics goals; Full employment, price stability and equitable
distribution of income.

3. Complete the table below.

Monetary Policy Fiscal Policy
Expansionary Contractionary Expansionary Contractionary

When to implement

How to implement
 ECMD223 Principles of Macroeconomics

4. Show the shift in the aggregate supply curve when the following factors are applied. Draw a
graph to show your answer and label accordingly.
a) The government decided to increase the tax rate on goods and services.

b) The investments made by individuals from foreign countries into this country are
increasing.

5. Show the shift in the aggregate demand curve when the following factors are applied. Draw a
graph to show your answer and label accordingly.
a) The interest rate on personal loans is increasing.

b) The government announced that the tax rate on personal income will be reduced.