ECS3701 Assignment 2 Semester 1
ANSWERS 2026 - Due 17 April 2026
ECS3701 (Monetary Economics) –
Comprehensive Practice Examination
Semester 1 Revision Edition
Total Marks: 100
Time: 3 Hours
Section A – Multiple Choice (30 Questions × 1 mark = 30)
1. The primary objective of monetary policy in South Africa is to:
A. Increase exports only
B. Reduce government expenditure
C. Maintain price stability
D. Increase population growth
Answer: C
2. Which institution is responsible for monetary policy in South Africa?
A. National Treasury
B. Statistics South Africa
C. South African Reserve Bank
D. Parliament
Answer: C
3. Inflation targeting aims to:
A. Eliminate inflation completely
, B. Maintain inflation within a target range
C. Increase unemployment
D. Reduce exchange rates permanently
Answer: B
4. Which monetary policy tool directly affects commercial banks' borrowing costs?
A. VAT
B. Repo rate
C. Income tax
D. Import tariffs
Answer: B
5. An increase in the repo rate generally causes:
A. Higher borrowing costs
B. Increased household spending
C. Lower interest rates
D. Higher inflation immediately
Answer: A
Continue similarly through Question 30 covering:
• Money supply
• Inflation
• Exchange rates
• Monetary transmission mechanism
• Financial markets
• Banking system
ANSWERS 2026 - Due 17 April 2026
ECS3701 (Monetary Economics) –
Comprehensive Practice Examination
Semester 1 Revision Edition
Total Marks: 100
Time: 3 Hours
Section A – Multiple Choice (30 Questions × 1 mark = 30)
1. The primary objective of monetary policy in South Africa is to:
A. Increase exports only
B. Reduce government expenditure
C. Maintain price stability
D. Increase population growth
Answer: C
2. Which institution is responsible for monetary policy in South Africa?
A. National Treasury
B. Statistics South Africa
C. South African Reserve Bank
D. Parliament
Answer: C
3. Inflation targeting aims to:
A. Eliminate inflation completely
, B. Maintain inflation within a target range
C. Increase unemployment
D. Reduce exchange rates permanently
Answer: B
4. Which monetary policy tool directly affects commercial banks' borrowing costs?
A. VAT
B. Repo rate
C. Income tax
D. Import tariffs
Answer: B
5. An increase in the repo rate generally causes:
A. Higher borrowing costs
B. Increased household spending
C. Lower interest rates
D. Higher inflation immediately
Answer: A
Continue similarly through Question 30 covering:
• Money supply
• Inflation
• Exchange rates
• Monetary transmission mechanism
• Financial markets
• Banking system
