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ECS2602
ASSIGNMENT 01
YEAR: 2026
,Question 1
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This question is based on the following information:
Government spending = 150
Taxes = 80
Exports = 300
Imports = 500
Capital inflows = 120
Capital outflows = 170
Which one of the following statements is INCORRECT?
Select one:
A.
A trade deficit of 200 occurs.
B.
A budget surplus of 70 occurs.
C.
A budget deficit of 70 occurs.
D.
The financial account deficit is equal to 50.
, Question 2
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Which one of the following statements is correct, referring to the balanced budget?
Assume that c = 0.6. The government increases its spending by 300, and taxes also increase by 300.
Select one:
A.
The increase in the level of output and income will be 750 due to the increase in government
spending and the increase in taxes. The net effect is an increase of 300 in the level of output and
income.
B.
The increase in the level of output and income will be 750 due to the increase in government
spending, and the increase in the level of output and income will be 450 due to the increase in taxes.
The net effect is an increase of 300 in the level of output and income.
C.
The increase in the level of output and income will be 498 due to the increase in government
spending, and the decrease in the level of output and income will be 299 due to the increase in taxes.
The net effect is an increase of 199 in the level of output and income.
D.
The increase in the level of output and income will be 750 due to the increase in government
spending, and the decrease in the level of output and income will be 450 due to the increase in taxes.
The net effect is an increase of 300 in the level of output and income.
Question 3
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Question text
Consider the consumption function of country A:
Country A: C = 2 000 + 0.7YD
Which one of the following statements concerning the consumption function is INCORRECT?
Select one:
Plagiarism!!
ECS2602
ASSIGNMENT 01
YEAR: 2026
,Question 1
Not yet answered
Marked out of 1.00
Flag question
Question text
This question is based on the following information:
Government spending = 150
Taxes = 80
Exports = 300
Imports = 500
Capital inflows = 120
Capital outflows = 170
Which one of the following statements is INCORRECT?
Select one:
A.
A trade deficit of 200 occurs.
B.
A budget surplus of 70 occurs.
C.
A budget deficit of 70 occurs.
D.
The financial account deficit is equal to 50.
, Question 2
Not yet answered
Marked out of 1.00
Flag question
Question text
Which one of the following statements is correct, referring to the balanced budget?
Assume that c = 0.6. The government increases its spending by 300, and taxes also increase by 300.
Select one:
A.
The increase in the level of output and income will be 750 due to the increase in government
spending and the increase in taxes. The net effect is an increase of 300 in the level of output and
income.
B.
The increase in the level of output and income will be 750 due to the increase in government
spending, and the increase in the level of output and income will be 450 due to the increase in taxes.
The net effect is an increase of 300 in the level of output and income.
C.
The increase in the level of output and income will be 498 due to the increase in government
spending, and the decrease in the level of output and income will be 299 due to the increase in taxes.
The net effect is an increase of 199 in the level of output and income.
D.
The increase in the level of output and income will be 750 due to the increase in government
spending, and the decrease in the level of output and income will be 450 due to the increase in taxes.
The net effect is an increase of 300 in the level of output and income.
Question 3
Not yet answered
Marked out of 1.00
Flag question
Question text
Consider the consumption function of country A:
Country A: C = 2 000 + 0.7YD
Which one of the following statements concerning the consumption function is INCORRECT?
Select one:
