BAFB1033

MACROECONOMICS
TOPIC REVIEW 1
INTRODUCTION TO MACROECONOMICS

NAME: PAVITHERAN A/L CHANDRA SEKARAN

MACTRIX NO: MC200611294

Question 1
Which of the following events are studied in Macroeconomics?

Event (√)
(a) Increase 20 sen per litre of RON 95 as announced in the news √
recently.
(b) The unemployment rate in Malaysia has been steadily at 1.3%. √

(c) Expanding the money supply decreases the interest rate, √

increases investment, and stimulates aggregate demand.

(d) When a new technology is introduced in the production of

lemonade, the supply of lemonade will increase.
(e) The Chinese government makes it increasingly difficult for √
American firms to export goods to China.

Question 2
Based on the following events, identify the phase of the economic cycle (peak; slowdown;
recession; recovery) when each event is likely to occur and mark it on the figure below:

(a) Government has

recently announced Recovery
tax cuts on income
earned by
households and
lowering the interest
rates.

1
(b) The economic Recession
effects arising from
the September 11
attacks were
causing global stock
markets to drop
sharply.

(c) The economy is Peak

experiencing over
heating due to too
much money in the
economy.

***End of Exercise Questions***