macro questions

1. Mini Test What are the two major groups in a simple macroeconomy? [4 marks] . Firms have two roles identify and explain each role [3 marks] Households have two roles - identify and explain each. [8 marks] In a two sector economy there is only one withdrawal explain what is meant by a withdrawal and which is the only withdrawal in a two-sector economy? [5 marks] . What is meant by an injection to the circular ow and in a two-sector economy what is the only injection? [5 marks] 6. An economy is in equilibrium at a national income level of $6ilni. Due to a recent crisis savings are at a level of $2400. Draw and fully label neatly the equilibrium level circular ow diagram. [3 marks] If there is an increase in investment in one cycle of $300 and the propensity to save does not change then track the impact of this change through 3 cycles and show on the diagram. [12 marks] . Explain what is happening to the original injection during these cycles. [8 marks] . Use the multiplier to calculate the national income when the macroeconomy will eventually return to equilibrium. Show all your workings and explain all terms used [12 marks]