ECS1601-UNISA-Exam-Memo-OctoberNovember-2011-ECS1601-

UNISA Exam Memo October/November 2011 ECS1601

SECTION A (50 MARKS)
QUESTION 1 (7 MARKS)

(i) (4marks)
 the total value of all final goods and services produced within the boundaries
of a country in a particular year
 Most important barometer of the performance of the economy.
 Real GDP takes into account inflation, i.e. adjusted for changes in the price
level.
 Nominal GDP is not adjusted for inflation
 Nominal GDP and GDP at current prices are synonyms.

(ii) (3 marks)
 Inflation is defined as a continuous and considerable rise in prices in general.
 Divided into cost-push inflation and demand-pull inflation
 Cost-push inflation is triggered by increases in the cost of production.
Increases in production costs push up the price level.
 Demand-pull inflation occurs when the aggregate demand for goods and
services increases while the aggregate supply remains unchanged.

QUESTION 2 (15 MARKS)
(i) (3 marks)




1

, (ii) (3 marks)




D for $ will ( - shift to the left; $ depreciates; ZAR appreciates)

(iii) (9 marks)




 Implement contractionary fiscal policy; (G and/or (T; Ad will decrease – shift to the

left; P( and Y(; lower inflation at the cost of production / Y / employment.

QUESTION 3 (11 MARKS)

(i) the multiplier (2 marks)


2