İKTİSADA GİRİŞ II - Deneme Sınavı - 23

If there is an excess demand in the economy, stocks decrease while production increases.

Since;

 

Economic agents obtain the goods and services they demand by paying the cost, that is, by spending. If we rewrite our aggregate expenditure function for an open economy, we get:
AE = C + I + G + NX

The answer is B.

Leakages and Injections- Injections

In order to achieve equilibrium in the economy, the leakages from income – expenditure flow must be balanced by additions (i.e., injections) to this flow. There are three types of injections for income-expenditure model developed so far: investments, government expenditures, and exports for an open economy.

In the Classical model, thanks to the smooth operation of the market mechanism, the economy is at full employment

An increase in export does not create leakage in income-expenditure flow in the open economy.

Equilibrium GDP Level is the level at which planned aggregate expenditures are equal to GDP

4 is the value of the expenditure multiplier when the marginal propensity to save (MPS) is 0.20 and the marginal propensity to import (MPI) is 0.05

In developing countries economic stabilization policies are generally used to realize macroeconomic objectives such as improving balance of payments, reducing public sector deficits and decreasing the inflation. In other words, the main objective of stabilization policies is to set up the disrupted equilibrium between existing resources and changing needs and to redirect the economy. Doğru yanıt " D " dir.

Social Transfers: Transfers made by the state with the social purposes (financial
aids for retirement funds and association, student grants etc.).

Autonomous tax is the part of total taxes that is independent of income.

Tax multiplier = - (5 -1) = -4

Correct answer is D.

Transfer expenditures are the unreturned (outright) expenditures and have no direct effect on the national income. They only cause purchasing power to shift among private individual or social stratums. These shifts are performed unreturned, and there are no changes on the flow of goods and services within national economy. In other words, the transfer expenditures made by public sector do not refer to consumption of real sources.

Contractionary fiscal policy is the fiscal policy that aims to decrease aggregate expenditures by reducing government spending and/or increasing taxes.

Change in income =Tax Multiplier x Change in Taxes

Change in income = [(-0.80+0.20)/(0.20+0.20)] x (-100) = -1.5 x (-100) = -150

The best way to understand the function of money as a medium of exchange is to consider an environment having no common instrument for exchanging. In such an environment, goods and services would be exchanged with other goods and services. So, in such environments there would be a barter economy and people would Exchange the goods they produced with the goods they want to consume.

The necessity of double coincidence of wants and uncertainty about the rate of exchange in a barter economy cause inefficiency by preventing specialization in division of labor. Thus, since the barter requires too much time and to bargain other people one by one, it is not a desired way.

Serving as a Store of Value: The third function of money is to be a store of value. Money, as a store of value, ensures to keep purchasing power on hand.

The objects having no value as goods but referring to a value in purchasing goods and services are called as fiat Money.

Banks create money by collecting deposits from people and using them to make loans and investments. This money created in form of demand deposits as a result of banks’ credit transactions is called as deposit Money.