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(Revision 2) FPEC1064 MACROECONOMICS - TOPICS 1, 2, 3 (MCQ)

Question 1: Multiple Choice Questions (30 Marks)

Q1(a). The table below shows the national income accounting data for Country X in the year 2019.

Item RM billion
Imports 17880
Gross domestic product at market price 28000
Income received from abroad 3200
Subsidies 1000
Investment 4350
Income paid to abroad 2500
Exports 14600
Indirect taxes 1650

Based on the table above, compute the value of gross national product at factor cost.

A RM28050 billion
B RM35000 billion
C RM38750 billion
D RM40000 billion

Q1(b). Which one of the following is the best explanation of transfer payment?

A Subsidy payment by government to newly established firms

B Government payments for the purchases of goods and services
C Government payments to individuals where there is no good or service received in exchange
D Government allowance to workers whose wages are below the minimum wage level

Q1(c). Which one of the following is part of the national income statistics?

A Old age pension

B Scholarships
C Producers profit
D Unemployment allowance

This question paper consists of 2 questions on 5 printed pages.

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Q1(d).

A farmer sells wheat to a miller for RM500 and the miller sells flour to a baker for
RM700 and the baker sells bread to the consumers for RM1000.

Based on the statement above, calculate the total value added by the miller and the baker.

A RM500
B RM700
C RM1000
D RM2300

Q1(e). A four sector economy is an economy that ________________________________________.

A has a stock market that is not open to traders from other countries
B does not have economic activities with the rest of the world
C has no established diplomatic relationship with other countries
D has extensive trading and financial relationship with other countries

Q1(f). All of the following are most likely included when calculating national income values except
__________________________________________.

A a maid working full time with a family

B a housewife doing household chores
C a lawyer presenting a case at court
D medical services rendered by a doctor

Q1(g). ______________________________ would increase the level of national income of a country.

A An increase in taxation
B An increase in savings
C An increase in exports
D An increase in imports

This question paper consists of 2 questions on 5 printed pages.

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Q1(h). The table below shows the national income accounting data for a country in the year 2017.

Item RM billion
Consumption 5000
Exports 2500
Government expenditure 1800
Subsidies 300
Investment 5000
Indirect business taxes 400
Imports 1800

State the value of net exports and GDP at market price.

Net exports GDP at market price

(RM billion) (RM billion)
A 700 10000
B 700 12500
C 1250 15000
D 2500 18000

Q1(i). Which of the following event would shift the aggregate supply curve from AS to AS1?

Price Level

AS1
AS

0 Real GDP

A A fall in tax level

Fall in income tax, Yd rise, consumption rise, AD rise
Fall in business tax, investment rise, AD rise
A fall in tax on a good (sales tax / indirect tax), firms cost of production falls, firms
profits increase, firms increase output, AS increase, AS shifts right

B A fall in migrant workers

C A rise in money supply

Commercial banks lend more loans, consumption rise, investment rise, AD rise

D A rise in government subsidies

Firms cost of production falls, profits rise, production rise, AS rise, AS right

This question paper consists of 2 questions on 5 printed pages.

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Q1(j). If net exports from Malaysia increased, what would most likely happen to the price level and
real gross domestic product?

Price level Real gross domestic product

A unchanged unchanged
B decrease decrease
C increase increase
D increase decrease

Q1(k). The aggregate supply curve is ________________________________________________.

A the total quantity of final goods and services offered for sale at the current price level
B the total quantity of final goods and services offered for sale at different price levels
C the total quantity of intermediate goods offered for sale at different price levels
D the total quantity of raw materials offered for sale at different price levels

This question paper consists of 2 questions on 5 printed pages.

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Q1(l). Which of the following are components of aggregate expenditures?

A Household consumption, business investment, government spending and net export

B Household consumption, business profits, government transfer payments and net export
C Household consumption, business profits, government spending for goods and services and
imports
D Household consumption, business investment, government transfer payments and savings

Q1(m). The table identifies the functions of money and the principal benefit that each function produces.
Which function of money is correctly matched with its principal benefit?

Function
A medium of exchange
B standard of deferred payment
C store of wealth
D unit of account
Benefit
encourages the accumulation of funds for future use
store of wealth
permits a system of credit to operate
allows the relative value of goods to be compared
unit of account
overcomes the drawbacks of the barter system
medium of exchange

Q1(n). ________________________ is also commonly known as the lender of last resort.

A Agricultural bank
B Industrial bank
C Commercial bank
D Central bank

Public Bank Setapak – financial problem

Help
- Other Public bank branches
- Other commercial banks (Maybank, CIMB, RHB)
- Central Bank (BNM) – peminjam terakhir

Q1(o). Barter trade can be carried out effectively when _____________________________________.

A there is double coincidence of wants

(both persons agree and like the goods that each other brings)

B there is better transportation available

C there is sufficient number of buyers and sellers
D there are many types of goods available

This question paper consists of 2 questions on 5 printed pages.