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Past Year Question QMT181
Past Year Question QMT181
COURSE : MACROECONOMICS
COURSE CODE : ECO211/210/164/219
EXAM : JUNE 2021
JULY 2019
TIME : 3 HOURS
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of two (2) parts: PART A (40 Questions)
PART B (4 Questions)
2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.
PART A
A. The price of smartphone, wage differences between genders and antitrust laws.
B. How customers maximize utility and how prices are established in markets for
agricultural products.
C. The percentage of the labor force that is out work and differences in average
income from country to country.
D. The effect of taxes on the process of airline tickets, the profitability of automobile-
manufacturing firms and employment trends in the food-service industry.
A. increase.
B. decrease.
C. remain constant.
D. either increase or decrease depending on the size of the change in autonomous
consumption.
10. If the Malaysian government decides to increase spending by RM80 million, with MPC =
0.8, the national income will
11. Investment demand curve will shift to the least as the result of
13. Given that the saving function in a two sector economy is S = - 80 + 0.15Yd, then the value
of multiplier in this economy is
A. 0.67
B. 1.33
C. 5.00
D. 6.67
14. How much is the marginal propensity to consume if the investment multiplier is 2.5?
A. 0.2.
B. 0.4.
C. 0.6.
D. 1.0
15. The consumption function is given as C = 200 + 0.7 Yd. If income is RM1,500 and net
taxes are RM50, saving equals
A. RM175
B. RM235
C. RM1 215
D. RM1 290
16. A house is bought by a bank and sold to you at an agreed price, then the bank and you
determine the period and manner of its installments. This Islamic financial product is
known as
A. al – Murabahah
B. al – Musyarakah
C. al – Mudharabah
D. al - Bai Bithaman Ajil
18. Under this Islamic scheme of savings and current account, the customers will enjoy
interest free safekeeping of money, as well as a share of any profit that the bank makes
by utilizing the deposit. This Islamic financial product is known as
A. al – ‘araf
B. al – falah
C. al – wadiah
D. al – mudharabah
19. When economists refer to “tight” monetary policy, they mean the Bank Negara Malaysia
is taking actions that will
20. Al – Jizyah
22. Nik Suriati pays a tax of RM200 on her income of RM40,000, while Azwani pays a tax of
RM300 on her income of RM60,000. This tax structure is
A. constant.
B. regressive.
C. progressive.
D. proportional.
23. Assume an economy is at full employment but planned investment exceeds planned
saving, other things being equal, what fiscal policy actions would best address these
problems?
A. excise tax
B. regressive tax
C. proportional tax
D. progressive tax
26. All of the following are not included in a labor force except
A. pensioner.
B. housewife.
C. quit voluntarily.
D. absent from the job because of bad weather.
27. If the number of people employed is 2,905,000 and the labor force is 3,500,000, the
unemployment rate is
A. 17%.
B. 20%.
C. 83%.
D. cannot be determined from this information
A. Lenders.
B. Borrowers.
C. Pensioners.
D. Savers
33. Unemployment that occurred during the Covid-19 pandemic outbreak can be considered
as
A. cyclical unemployment.
B. frictional unemployment.
C. seasonal unemployment.
D. structural unemployment.
34. The infant industry argument for protectionism suggests that an industry must be protected
in the stage of its development so that
A. Policy to protect.
B. Restriction on the volume of import.
C. Government restricts the supply of foreign currency in the country.
D. Government directly bans items into the country due to economic, social or political
reasons.
37. Which of the followings not included in the current account balance?
A. Net income.
B. Current transfer.
C. Financial account.
D. Balance of goods and services.
A. a form of international barrier to trade created by the IMF to help maintain fixed
exchange rates between member countries.
B. a form of international reserve holdings created by the IMF to help maintain
purchasing power parities.
C. a form of international money created by the IMF that member countries can use
to settle international accounts.
D. none of the above.
40. Under a system of floating exchange rates, an excess supply of a currency will lead to
PART B
QUESTION 1
The table shows the monetary items for country COV in year 2019.
ITEMS RM (Million)
Coins 14,500
i) M1
(3 marks)
ii) M2
(3 marks)
iii) M3
(3 marks)
QUESTION 2
Assume Bank STU receives a deposit of RM25,000 from Mr Yu and faces a reserve requirement
of 5%.
a) Determine how much the bank would lend out. Show your answer on Bank STU’s balance
sheet.
(3 marks)
d) If the central bank plans to increase cash ratio in the economy by 1%, what happened to
the new total money supply? Find the value.
(2 marks)
e) Assuming that the loan shown in Bank STU’s balance sheet is deposited into Bank MNO.
Using the reserve requirement rate of 5%, show the changes in Bank MNO’s balance
sheet.
(3 marks)
QUESTION 3
Table below shows the trade of two goods between two countries. Based on the table, answer
the following questions.
a) Based on the absolute advantage theory, determine which country has absolute
advantage in the production of medical product and electronic product? Give your reason.
(2 marks)
b) Calculate the opportunity cost of producing each product for Japan and China. State which
country should specialize in the production of medical product and electronic product.
(4 marks)
c) Construct a table to show the total production after specialization for both countries.
(3 marks)
e) Define term of trade. Assuming the term of trade is 1 medical product for 1.5 electronic
product and both countries need 2200 units of medical product each. Show in the table
the amount of goods consumed by both countries after trade takes place.
(4 marks)
QUESTION 4
The following table shows the Balance of Payments item for Malaysia in 2020.
ITEMS RM (MILLION)
Freight charges 2230
Consultancy services 3230
Travel and tourism 1030
Banking and insurance 930
Errors and omissions 4580
Transportation 530
g) Calculate official reserve account. Determine the effect on reserve asset of this country.
(1 mark)