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Tutorial Eco211 (Chapter 4&5)

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94 views

Tutorial Eco211 (Chapter 4&5)

Uploaded by

2022497534
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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TUTORIAL ECO211 (21/5/2024)

QUESTION 1

The balance sheet of Bank Bheta is as follows:

Assets RM (million) Liabilities RM (million)


Cash 2,000 Deposits 10,000
Loans _________
10,000 __________

a) Fill in the blanks with the correct answers.


(2 marks)

b) Define cash reserve ratio and calculate its value.


(4 marks)

c) Calculate the total money supply and total credit created based on the cash ratio.
(4 marks)

d) Suppose someone lends all money from Gamma bank and deposits it at Bank Bheta.
Show the balance sheet for Bank Bheta.
(2 marks)

e) State any three (3) assumptions in the credit creation process.


(3 marks)

QUESTION 2

The table below shows the amount of tax paid in countries D, G, and J.

Country Original Original tax New income New tax paid


income level paid level
D 1, 000 50 5, 000 500
G 1, 200 72 8, 000 480
J 1, 500 150 10, 000 600

a) Calculate the tax rate for each country for original and new income.
(3 marks)

b) Identify the type of tax structure practiced in each country.


(3 marks)

c) Based on (a), the supposed income level increases from 8,000 to 15,000 in country G.
Calculate the new tax paid by residents of Country G.
(2 marks)

d) Define indirect tax and give two (2) examples of indirect tax.
(4 marks)

e) State any three (3) monetary policy tools that can be practiced to achieve
macroeconomic objectives.
(3 marks)

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