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COURSE MACROECONOMICS
COURSE CODE ECO211/210/164/219
EXAMINATION FEBRUARY 2023
TIME 3 HOURS
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of two (2) parts: PART A (40 Questions)
PART B (4 Questions)
3. Do not bring any material into the examination room unless permission is given by the invigilator.
4. Please check to make sure that this examination pack consists of:
PART A
QUESTION 1
Al Mudharabah is
l efforts while the
A contract of profit sharing where one party contributes his entrepreneuria
other provides capital.
agrees to finance
B an agreement between a lender and fund manager, where the lender
ratio upon
the entrepreneur's project on a profit-sharing basis according to an agreed
negotiation between the lender and entrepreneur
whereby the lender
C partnership for a specific business activity with the aim of making profit,
not only provides the capital but may also participate in the management.
required by the
D concept of leasing finance, whereby the bank purchases the asset
the rental and
customer, and then leases the asset to the customer for a given period,
other terms and conditions being agreed by both parties
(1 mark)
QUESTION 2
such as coins and
Category of money supply that includes all physical money
is called:
currency, demand deposits, and other liquid assets held by the central bank
A Broad Money
8 Narrow Quasi Money
C Foreign currency money
D Repurchase Agreements
(1 mark)
QUEST ION 3
QUESTION 4
The statement, "My Smartphone is worth RM 7000fl represents money's function as:
A A medium of exchange
B A unit of account
C A store of value
D A standard of deferred payment
(1 mark)
QUESTION 5
QUESTION 6
QUESTION 7
QUES:flON 8
Frictional unemployment is the result of:
A a persistent mismatch between the skills and characteristics of workers and the
requirements of the jobs
B the process of matching workers with jobs
C the ups and downs in inflation
D a slowdown in economy
(1 mark)
QUESTION 9
QUESTION 10
The balance of payments includes which three accounts?
A The current account, the financial account, and the capital account
B The capital flows account, the financial account, and the trade account
C The net investment account, the net exports account, and the net transfer's account
D The trade balance account, the net foreign investment account, and statistical
d iscrepancy.
(1 mark)
QUESTION 11
In an economy without any leakages, autonomous consumption is equal to RM 300 and the
break-even income is RM 1000. The marginal propensity to consume is equals to:
A 0.10
B 0 .20
C 0.70
D 0 .90
(1 mark)
QUESTION 12
A customer deposits RM 100 in her bank account. If the reserve ratio is 5 percent, how much
credit can be created from this deposit?
A RM 1900
B RM 1000
C RM 900
D RM 2000
(1 mark)
QUESTION 13
QUESTION 14
During unemployment, the central bank will perform open market operations by _ _ __
government bonds, so that the money supply could be _ _ _ to stabilize the economy.
A Selling, decreased
B Selling, increased
C Buying, increased
D Buying, decreased
(1 mark)
QUESTION 15
Country M population are 40 million, the total labour force is 250,000 and total employment is
200,000, calculate the unemployment rate for country M.
A 25%
B 20%
C 80%
D 15%
(1 mark)
QUESTION 16
The ratio at which nations will exchange goods and services is known as the:
A Transfer payment
B Terms of trade
C Exchange rate
D Balance of payments
(1 mark)
QUESTION 17
A decrease in the cash ratio requirement _ _ bank reserves and _ _ the money supply.
A Increases, increases
B Increases, decreases
C Decreases, increases
D Decreases, decreases
(1 mark)
QUESTION 18
A full-time student who is not working is categorized as:
A Unemployed
B Disgruntled unemployed
C Not in the labor force
D Frictionally employed
(1 mark)
QUESTION 19
The natural rate of unemployment is made up of:
A Frictional, cyclical, and structural unemployment
B Frictional and cyclical unemployment
C Cyclical and structural unemployment
D Frictional and structural unemployment
(1 mark)
QUESTION 20
QUESTION 21
QUESTION 22
QUESTION 23
Which of the following is not an objective of macroeconomics from an Islamic perspective?
A to maximize employment generation.
B to achieve universal education.
C to achieve economic justice and freedom.
D to produce many business firms
(1 mark)
QUESTION 24
An Islamic government should adopt all of the following, except
A control the activities of producers and sellers, especially during festival.
B ignore excessive price changes of various controlled items.
C guarantee the safety of lives and properties of all individuals in the country.
D provide adequate facilities for every individual in the country, where possible.
(1 mark)
QUESTION 25
The determination of price and the behavior of individual markets are studied in _ . On the
other hand, topics such as business cycles, unemployment and inflation are studied in _ .
A macroeconomics; microeconomics.
B demand; supply analysis.
C microeconomics; macroeconomics.
D none of the above.
(1 mark)
QUESTION 26
QUESTION 27
Which of the following best defines disposable income?
A income received by households minus personal taxes.
B the before-tax income received by households.
C all income earned by resource suppliers for their current contributions to production.
D the market value of the annual output net of consumption of fixed capital.
(1 mark)
QUESTION 28
QUESTION 29
QUESTION 30
The difference between gross domestic product and gross national product is ... .
A subsidy.
B indirect tax.
C depreciation.
D net property income from abroad.
(1 mark)
QUESTION 31
QUESTION 32
In Islam, the owner of liquid capital uses this capital for investment through the mode of
A AI-Mudharabah.
B Al-ljarah.
C AI-Musyarakah.
D AI-Araf
(1 mark)
QUESTION 33
At the break-even point,
A income equals consumption.
B saving is positive.
C income is bigger than consumption.
D saving is greater than zero.
(1 mark)
QUESTION 34
Multiplier effects means that
A consumption is usually several times as large as saving.
B a small change in consumption demand can lead to a much greater increase in investment.
C a small increase in investment can cause the national income to change by a larger
amount.
D a small decline in the MPC can cause the equilibrium national income to rise by several
times that amount.
(1 mark)
QUESTION 35
Without the government and foreign sectors, the formula of multiplier is
A 1 /MPS
B 1 / MPC
C 1 / (1 + MPC)
D 1-MPC
(1 mark)
QUESTION 36
QUESTION 37
QUESTION 38
QUESTION 39
QUESTION 40
PARTS
QUESTION 1
The following data are money supply in country GENOVA in year 2018
ITEM $ (MILLION)
Paper money 25000
Bank Negara Malaysia certificate 13200
New negotiable certificate by commercial banks 12500
Short-term interest-bearing debt in commercial banks 9500
Fixed deposits and saving deposits at commercial banks 15650
Current deposits at commercial banks 21000
Fixed deposits and saving deposits at other financial institutions 25000
a) Assuming that the number of coins is $9,435 million. Calculate the amount of fiat
money.
(1 mark)
QUESTION 2
The table below shows the amount of tax paid in countries A, 8 , and C.
Country Original income Original tax New income level New tax
level paid paid
A 2500 250 5000 300
B 2700 162 9500 570
C 3000 150 10000 600
a) Calculate the tax rate for each country for original and new income.
(3 marks)
QUESTION 3
Table below shows the trade of goods between the two countries. Based on the table,
answer the following questions.
a) Based on the absolute advantage theory, determine which country has an absolute
advantage in the production of bicycles and computers? Give your reason.
(2 marks)
b) Calculate the opportunity cost of producing each product for Japan and Korea.
State which country should specialize in the production of bicycle and computers.
(4 marks)
c) Construct a table to show the total production after specialization for both countries.
(3 marks)
(2 marks)
(4 marks)
QUESTION 4
ITEMS $ {MILLION)
Other transportation 95
Travel and tourism 3250
Exports 78,250
Official long-term capital 6780
Portfolio investment 4123
Private short-term capital 5505
Income from investment: Corporate investment 8760
Net transfer -2720
Government transactions 1250
Investment from abroad 6125
Corporate investment 3415
Errors and omissions 5210
Freight and insurance -6560
Income from investment: Portfolio investment 4220
Consultancy services 2560
Imports 82250
Banking and insurance 2550