Beryl’s Chocolate and Confectionary Sdn Bhd (Beryl’s) Was Created with One Aim in Mind – Excellence. Since Our Establishment in 1995, We’ve Focused on Ensuring the Creation, Supply and Maintenance of the Very Best

Questions List * Level 1 1) A recession occurs when real GDP declines. ( T ) 2) For an economy as a whole, income equals expenditure because the income of the seller must be equal to the expenditure of the buyer. ( T ) 3) If the marginal propensity to consume is 0.8, the marginal propensity to save will be 0.2. ( T ) 4) When Government totals expenditure greater than total revenue, the government budget is in surplus. ( F ) * If Government total expenditure greater than total revenue, government spending exceeds tax revenues, and the budget is in deficit 5) The major problem of barter is the need for a double coincidence of wants. ( T ) 6) A bank will list the mortgage loans it makes as liabilities. ( F ) * They are assets to the bank. 7) A recession occurs when real GDP declines. ( T ) 8) If the MPC for the economy is 0.8, the tax multiplier is 3.5. ( F ) * 1/1-MPC , 5 9) Rapid increases in the price level during periods of recession or high unemployment are known as inflation. ( F ) * Stagflation 10) The larger the MPC, the smaller the government spending multiplier. ( F )

* Level 2 1) A progressive income tax means that those with a higher income pay
(a) A lower percentage of their income in taxes than low-income people.
(b) A higher percentage of their income in taxes than low-income people.
(c) The same percentage of their income in taxes as low-income people.
(d) All the taxes in the economy.

2) Economists identify a tax structure as being progressive if
(a) The average tax rate increases as the level of taxable income increases
(b) The marginal tax rate falls as taxable income rises
(c) The average tax rate remains constant as the level of taxable income rises
(d) The marginal tax rate remains constant as the level of taxable income rises

3) A current account deficit implies that
(a) Spending