UNIVERSITI SAINS MALAYSIA

School of Management
ATW 108 MACROECONOMICS
(Semester 2, 2015/2016)
TUTORIAL 1

QUESTION 1:
(a)

Briefly, discuss the differences between microeconomics and macroeconomics

(b)

Macroeconomic policy refers to the economic objectives or target and the ways in
which the policymaker tries to reach the objectives. Explain three types of
macroeconomic policies used in the existing economy.

(c)

Briefly, explain the macroeconomic goals

QUESTION 2:
Price per unit
Year 2010
Agricultural
RM 0.50
Manufacturing
RM 0.30
Services
RM 0.70
Goods

2015
RM 0.40
RM 1.00
RM 0.90

Production (Million units)

2010
2015
6
11
7
4
10
12

The table presented above shows sectoral productions of a country in 2010 and 2015 and
their market prices. Reproduce the table and add columns to answer the following:
(a)
(b)
(c)
(d)

Calculate the nominal GDP in 2010 and 2015

Calculate the real GDP in 2015 at the price level of 2010
How much is the increase of nominal and real GDP in 2015?
Does nominal GDP always greater than real GDP? Why

QUESTION 3:
(a)

It has been well noted in many macroeconomics books that the study of national
income accounting has become a vital element to individuals, firms as well as the
governments. For the sake of brevity, it helps to identify sources of income and heads
of expenditure. Explain what can you actually learn from the information provided by
national income accounting?

(b)

Economists use national income accounting GDP to measure total production in the
economy. For that reason, economists would like GDP to be as comprehensive as
possible and not overlooking any significant production that takes place in the
economy. Most economists believe that GDP does a good job in measuring
production. Does national income accounting GDP really covers all significant
production that takes place in the economy? Discuss

1
[Dr. Tang, C.F., CenPRIS]

(c)

Given the following information, construct a national income accounting and calculate:
National income GDP and GNP using two possible national accounting
approaches
(ii) Briefly, explain what is the difference between GDP and GNP?
(i)

Items
Private consumption
Public consumption
Gross fixed capital formation
Change in inventory
Wages and salaries
Income from employment
Income from self-employment
Export of goods and services
Import of goods and services
Net factor income from abroad
Factor income received from abroad
Profit
Factor income paid abroad
Indirect tax
Subsidies
Income from rent, dividend and interest
Depreciation

RM (Million)
2500
350
350
100
2400
1800
600
600
500
100
800
500
700
300
150
400
50

QUESTION 4
Items
Tuitions & Fees
Rooms & Board
Books & Journal
Stationary

2000 (RM)
2500
6000
1000
150

2015 (RM)
3000
6800
1400
220

Usage
30%
35%
15%
20%

Alan wishes to analyse and understand the educational cost in Malaysia over the year 2000
to 2015. Therefore, he visited the Department of Statistics and extracted some relevant
information as illustrated above from the Household Expenditure Survey (HES). Based on
the given information, what is the education price index for 2015 with respect to 2000s
price? What is the percentage change in education price in 2015?

2
[Dr. Tang, C.F., CenPRIS]