Question 1

(a) There are FOUR main components of GDP. Explain the components.

[16 marks]

(b) Assume the GNP for Malaysia is lower than the GDP. Explain why this could happen.

[14 marks]

Question 3

Explain why the consumption function is upward sloping and the investment function is horizontal.

[30 marks]

Question 4

Elaborate how fiscal policy can solve the problem of unemployment in Malaysia.

[20 marks]