ECO_201011S_20-_20Workshop_202

A r520 b r570 c r720 d r800 14 if the government

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Unformatted text preview: currently consume R100 regardless of their income, and spend three quarters of any income they earn. Currently, there is investment of R30 by the country’s firms. 12. The equilibrium level of output is A. R130 B. R300 C. R480 D. R520 13. If the citizens of the country elect a government headed by Dr David Buchanan, which immediately decides to spend R50 on a new brewery, what will be the new equilibrium level of output given this unfunded increase in government stimulus? A. R520 B. R570 C. R720 D. R800 14. If the government sets the tax rate at 20% and government expenditure is at R50, what is the new equilibrium level of output? A. R450 B. R480 C. R520 D. R720 15. Given the information above (as of the previous question), if it were to happen that investment by firms in this economy is equal to R30 (autonomously) plus 10% of the level of income, what is the new equilibrium level of income? A. R360 B. R450 C. R600 D. R1200 16. Suppose that Dr David Buchanan decides to open up the economy to the outside world. If CA = R100; t = 0.20; MPC = 0.75; G = R50, I = R30 and exports are R35 and imports are 10% of income, what is the new equilibrium level of income in the economy?. A. R430 B. R480 C. R580 D. Impossible to calculate 17. What is the value of the multiplier in the previous question? A. 1.56 B. 2.00 C. 2.50 D. 2.85 18. Given the information about exports and imports in question 5, what would be the balance on current account if the level of income were R400? A. R40 surplus B. R5 surplus C. R5 deficit D. R40 deficit 19. Given the information provided, by how much would disposable income increase if the level of income were to increase by R1? A. R0.20 B. R0.60 C. R0.80 D. R1.00 1.B 2.C 3.B 4 .A 5.C 6.C 7.D 8.A 16.A 17.B 9.B 10.B 11.C 18.C 19.C Compiled by Brendan Meehan - October 2009 12.D 13.C 14.A 15.C...
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