1- If disposal income is NIS 400 million, autonomous consumption is NIS 60 million, and MPC is 0.8, what is the level of saving?

Select one:

a. NIS 380 million.

b. NIS 590 million.

c. NIS 20 million.

d. NIS 210 million.

2- A firm is considering a one-year project that is expected to deliver a 7% nominal profit rate. The current real interest rate is 5% and inflation is expected to equal 1%. Then, the firm should not invest in the project.

Select one:

a. False.

b. True.

3- In a simple Keynesian model with an MPC of 0.8, if the government increases spending by NIS400 billion and increases taxes by NIS400 billion, GDP will increase by NIS400 billion.

Select one:

a. False.

b. True.

4- A Palestinian citizen buys an automobile produced in Egypt by a Jordanian company. As a result,

Select one:

a. Egypt net exports increase, Egypt GDP is unaffected, Jordanian GNP increases, Palestinian net exports decrease, and Palestinian GNP and GDP are unaffected.

b. Egypt net exports and GDP increase, Jordanian GNP increases, Palestinian net exports decrease, and Palestinian GNP and GDP are unaffected.

c. Egypt net exports and GDP increase, Jordanian GNP increases, Palestinian net exports decrease, Palestinian GNP and GDP decrease.

d. Egypt net exports and GDP are unaffected, Jordanian GNP increases, and Palestinian net exports, GNP, and GDP decrease.