Ecs3701 Assessment 1 Sem 1 Of 2025 Expected Questions And Answers

Question 1
Of the following, the smallest is …
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c. coins and bank notes. BNU STA tutorials
d. M2.

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Question 2
Which one of the following statements regarding financial
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a. Financial intermediaries act as middlemen between the
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lender and the borrower.
b. Banks provide a channel for those who want to buy shares.

c. The South African Reserve Bank is an example of a financial
intermediary.
d. Banks do not play a role in determining the quantity of
money.

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Question 3 An attribute of a bond that influences its interest rate is ……
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b. real interest rate.
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c. default.

d. premium.

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Question 4
The concept of ______ is based on the notion that a rand paid to you
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in the future is, in general, less valuable to you than a rand today.
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a. deflation.

b. interest.
c. present discounted value.

d. future discounted value.

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Question 5
Keynes liquidity preference framework determines the equilibrium
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a. interest rate using the supply of and demand for bonds.

b. price using the supply of and demand for assets.
c. in the bond market.

d. in the market for money.

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Question 6
Given an increase in expected inflation
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a. demand for assets will decrease.
b. quantity demanded of bonds will decrease.
c. supply curve of bonds will shift to the left.

d. riskiness of assets will also be affected.

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Question 7 Different measures of money tell the same story about the results of
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True

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Question 8
If the SARB increases the interest rates, either the supply of bonds
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………… or the demand for bonds …….
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a. Increases; increases.
b. Increases; decreases.

c. Decreases; increases.
d. Decreases; decreases.

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Question 9
If you have a R5000 coupon bond that pays R400 every year, what is
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the coupon rate?
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a. R8
b. 12.5

c. 8%
d. 0.8 OSCAR THE TUTOR

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Question 10
As the interest rate on bonds increases, the opportunity cost of
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a. holding bonds, more desirable, falls.
b. holding money, less desirable, increases.

c. holding money, more desirable, falls.

, d. holding money, less desirable, falls.

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Question 11
Shares are sold for the first time in the …… market and resold in the
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a. Capital; money.
b. Primary; secondary.
c. Exchanges; over-the-counter.

d. Money; capital

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Question 12
Which one of the following statements is correct?
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a. During a business cycle contraction, the supply curve of
bonds shift to the right.

b. Everything else held constant, an increase in the money
supply will cause the bond prices to increase.
c. When the economy expands, the demand curve for bonds
shifts to the left.

d. In the Keynesian liquidity preference framework, the demand
for bonds must equal the supply of money.

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Question 13
A situation in which the quantity of bonds supplied exceeds the
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quantity of bonds demanded is called a condition of …
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a. excess supply.