ECS1601/201/1/2018
Tutorial Letter 201/1/2018
Economics 1B
ECS1601
First Semester
Department of Economics
IMPORTANT INFORMATION:
This tutorial letter contains important
information about your module.
BARCODE
, CONTENTS
1 DISCUSSION OF ASSIGNMENT 01/2018 ...................................................................................... 3
2 DISCUSSION OF ASSIGNMENT 02/2018 ................................................................................... 10
3 DISCUSSION OF ASSIGNMENT 03/2018 .................................................................................... 16
4 DISCUSSION OF ASSIGNMENT 04/2018 .................................................................................... 23
2
, ECS1601/201
Dear Student
In this tutorial letter, we provide you with the answers to the multiple-choice questions in Assignments 01
to 04, with brief explanations where necessary. In most cases, however, we merely refer you to the
prescribed textbook and/or the study guide. If you have any questions about the answers that are provided,
please discuss this with your fellow students and your e-tutor on the e-tutor website.
All references, unless otherwise indicated, are to the prescribed textbook: Mohr, P and associates. 2015.
Economics for South African students. 5th edition. Pretoria: Van Schaik.
1 DISCUSSION OF ASSIGNMENT 01/2018
1.1 The correct answer is option [3].
Refer to section 3.2 of the textbook. A stock has no time dimension and is measurable at a particular point
in time, for example, Friday, 28 February 2016; while a flow variable has a time dimension and can only
be measured over a period (e.g., per minutes, hours, weeks, months etc.). Therefore, option [2] is incorrect.
Option [1] is incorrect. A mortgage bond and money supply are stock variables as they are measured at a
specific moment or particular date (e.g., 01 March 2017). For example, when a person buys a home
through the bank, he or she gets a lump sum from the bank to pay for the property. This lump sum is then
measured at that specific moment when the transaction is processed rather than over a period of time.
Option [3] is incorrect. Money supply (also known as money stock) is the total amount of money available
and can only be measured at a particular point in time.
Option [4] is incorrect. For example, balance in savings account is a stock variable which is accumulated
over time by inflows of monthly savings.
1.2 The correct answer is option [1].
Refer to section 3.2 of the textbook. Spending over a period, for example daily, weekly, quarterly or yearly,
is considered a flow variable; while population, as the total number of people in a city or country, is
considered a stock variable since it indicates the number of people at a particular point in time. Therefore,
option [1] is the only correct answer.
3
Tutorial Letter 201/1/2018
Economics 1B
ECS1601
First Semester
Department of Economics
IMPORTANT INFORMATION:
This tutorial letter contains important
information about your module.
BARCODE
, CONTENTS
1 DISCUSSION OF ASSIGNMENT 01/2018 ...................................................................................... 3
2 DISCUSSION OF ASSIGNMENT 02/2018 ................................................................................... 10
3 DISCUSSION OF ASSIGNMENT 03/2018 .................................................................................... 16
4 DISCUSSION OF ASSIGNMENT 04/2018 .................................................................................... 23
2
, ECS1601/201
Dear Student
In this tutorial letter, we provide you with the answers to the multiple-choice questions in Assignments 01
to 04, with brief explanations where necessary. In most cases, however, we merely refer you to the
prescribed textbook and/or the study guide. If you have any questions about the answers that are provided,
please discuss this with your fellow students and your e-tutor on the e-tutor website.
All references, unless otherwise indicated, are to the prescribed textbook: Mohr, P and associates. 2015.
Economics for South African students. 5th edition. Pretoria: Van Schaik.
1 DISCUSSION OF ASSIGNMENT 01/2018
1.1 The correct answer is option [3].
Refer to section 3.2 of the textbook. A stock has no time dimension and is measurable at a particular point
in time, for example, Friday, 28 February 2016; while a flow variable has a time dimension and can only
be measured over a period (e.g., per minutes, hours, weeks, months etc.). Therefore, option [2] is incorrect.
Option [1] is incorrect. A mortgage bond and money supply are stock variables as they are measured at a
specific moment or particular date (e.g., 01 March 2017). For example, when a person buys a home
through the bank, he or she gets a lump sum from the bank to pay for the property. This lump sum is then
measured at that specific moment when the transaction is processed rather than over a period of time.
Option [3] is incorrect. Money supply (also known as money stock) is the total amount of money available
and can only be measured at a particular point in time.
Option [4] is incorrect. For example, balance in savings account is a stock variable which is accumulated
over time by inflows of monthly savings.
1.2 The correct answer is option [1].
Refer to section 3.2 of the textbook. Spending over a period, for example daily, weekly, quarterly or yearly,
is considered a flow variable; while population, as the total number of people in a city or country, is
considered a stock variable since it indicates the number of people at a particular point in time. Therefore,
option [1] is the only correct answer.
3
