ECS2602 ASSIGNMENT 1 SEMESTER 1 2025

ECS2602 2025 ECS2602 ASSIGN 1 2025 ECS2602 2025




DISCLAIMER


ECS2602 ASSIGNMENT 1 2025 SEMESTER 1 GUIDE IS A PRODUCT OF
INTERNAL AND EXTERNAL RESEARCH THAT INCLUDES THE STUDY GUIDE,
PRESCRIBED TEXTBOOK, AND OTHER AUTHENTIC SOURCES.

, ECS2602 2025 ECS2602 ASSIGN 1 2025 ECS2602 2025


Learning Unit 1 (18 marks)

Questions 1 to 5 (8 marks)

Question 1

According to the video, fiscal policy is the use of government
spending and taxation to influence the economy. (2)

Question 2

Fiscal policy is a powerful tool. The key to its power is the multiplier effect. (1)

Question 3

In the video, there is a reference to supply-side economists, like Milton Friedman. (1)

Question 4

Monetary policy is the way the central bank influences the economy through the
management of the money supply and interest rates. (3)

Question 5:

The central bank system in the United States is called the Federal Reserve. (1)

Questions 6 to 11 (10 marks)

Question 6:

In the video, the more traditional financial market is explained where it is assumed that
the central bank is in control of the money supply, in other words, the exogenously
determined money approach. In our particular financial market in the ECS2602
module, we follow the endogenously determined money approach where
expansionary monetary policy in South Africa entails a(n) decrease in the interest
(repo) rate in order to increase the demand for goods in the economy and or
a(n) increase in the level of output and income. (3)0717513144