Question 1

List and explain the THREE (3) problems in using Consumer Price Index (CPI) as a measure of the cost of living.

Question 2

Using supply and demand diagrams representing the market for loanable funds, show and explain the effect on the equilibrium interest rate and quantity of loanable funds in the following events. Each event is treated independently:

a) A reduction in government spending

b)a change in tax laws that encouraged households to save more

Question 3

Jia Chong deposits RM50,000 with Bank A. Assume that the required reserves are 10 percent of checking deposits, banks hold no excess reserves and households hold no currency.

(a) Draw a simple T-account for the first three banks. Make sure your balance sheet balances.

(b) Calculate the size of money multiplier.

(c) Calculate the total money supply

Question 4

The table below uses data for the year 2021 provided by the Bureau of Labor Statistics. All values are in thousands. Compute (a)- (i), show your calculations.

Country	Adult Population	Labor Force	Employed	Unemployed	Unemployment Rate	Labor-Force Participation Rate
Malaysia	109,474	(a)	62,510	3,500	(b)	(c)
Brazil	(d)	26,870	(e)	2,577	(f)	57.41
Singapore	70,159	39,591	(g)	(h)	9.69	(i)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)