ECS1601 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Which of the following is/are correct regarding the distinction
between macroeconomics and microeconomics?
a) The price of apples at the supermarket is an example of a
macroeconomic variable.
b) An increase in the general price level (inflation) in the economy is an
example of a macroeconomic variable.
Answer: only b is correct
●● A flow variable is defined as a variable that is measured over a
period. Which one of the following variables is not an example of a flow
variable?
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production
Answer: [2] The balance on Sibahle's savings account
,●● Which of the following is not an acceptable intervention by the
public sector in a mixed economy?
[1] the provision of funds for public goods such as parks and streetlights
[2] regulation of the pricing behaviour of monopoly industries
[3] stabilisation of the economy during periods of economic instability
[4] regulation of the price increases that result from changes in patterns
of demand and supply in the competitive market
Answer: [4] regulation of the price increases that result from changes in
patterns of demand and supply in the competitive market
●● The factors of production in an economy are ...
[1] households, capital, land, entrepreneurship
[2] government, household, firms, natural resources
[3] natural resources (land), labour, capital, and entrepreneurship
[4] human capital, land, natural resources, technology
Answer: [3] natural resources (land), labour, capital, and
entrepreneurship
●● Which of the following are the remuneration of the factors of
production?
,[1] natural resources, rent, interest, labour
[2] rent, salaries and wages, interest, profit
[3] households, land, profit, capital
[4] entrepreneur, firms, capital, labour
Answer: [2] rent, salaries and wages, interest, profit
●● In the circular flow of income and spending ...
[1] savings, imports, taxes are leakages, while investment, government
spending, exports are injections.
[2] imports, taxes, investments are leakages, while exports, investments,
government spending are injections.
[3] savings, exports, taxes area leakages, while imports, investments,
government spending are injections.
[4] savings, government spending, imports are leakages, while
investments, exports, taxes are injections.
Answer: [1] savings, imports, taxes are leakages, while investment,
government spending, exports are injections.
●● In the circular flow of goods and services ...
[1] firms sell factors of production on the goods market.
[2] goods and services offered for sale on the goods market are
purchased by firms.
, [3] households combine factors of production and produce consumer
goods and services.
[4] households offer factors of production in the factor market.
Answer: [4] households offer factors of production in the factor market.
●● What does the letters A, B, C and D in the figure represent?
a) A represents factors of production
b) B represents goods and services
c) C represents foreign sector
d) D represents spending by firm
[1] only a is correct
[2] only b and c are correct
[3] only b and d are correct
[4] a and b are correct, while c and d are incorrect
Answer: [3] only b and d are correct
●● Which of the following is not an injection into the economy of South
Africa?
[1] A domestic company in South Africa sells leather to a client that is in
Italy.
AND CORRECT ANSWERS
COMPREHENSIVE STUDY GUIDE
●● Which of the following is/are correct regarding the distinction
between macroeconomics and microeconomics?
a) The price of apples at the supermarket is an example of a
macroeconomic variable.
b) An increase in the general price level (inflation) in the economy is an
example of a macroeconomic variable.
Answer: only b is correct
●● A flow variable is defined as a variable that is measured over a
period. Which one of the following variables is not an example of a flow
variable?
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production
Answer: [2] The balance on Sibahle's savings account
,●● Which of the following is not an acceptable intervention by the
public sector in a mixed economy?
[1] the provision of funds for public goods such as parks and streetlights
[2] regulation of the pricing behaviour of monopoly industries
[3] stabilisation of the economy during periods of economic instability
[4] regulation of the price increases that result from changes in patterns
of demand and supply in the competitive market
Answer: [4] regulation of the price increases that result from changes in
patterns of demand and supply in the competitive market
●● The factors of production in an economy are ...
[1] households, capital, land, entrepreneurship
[2] government, household, firms, natural resources
[3] natural resources (land), labour, capital, and entrepreneurship
[4] human capital, land, natural resources, technology
Answer: [3] natural resources (land), labour, capital, and
entrepreneurship
●● Which of the following are the remuneration of the factors of
production?
,[1] natural resources, rent, interest, labour
[2] rent, salaries and wages, interest, profit
[3] households, land, profit, capital
[4] entrepreneur, firms, capital, labour
Answer: [2] rent, salaries and wages, interest, profit
●● In the circular flow of income and spending ...
[1] savings, imports, taxes are leakages, while investment, government
spending, exports are injections.
[2] imports, taxes, investments are leakages, while exports, investments,
government spending are injections.
[3] savings, exports, taxes area leakages, while imports, investments,
government spending are injections.
[4] savings, government spending, imports are leakages, while
investments, exports, taxes are injections.
Answer: [1] savings, imports, taxes are leakages, while investment,
government spending, exports are injections.
●● In the circular flow of goods and services ...
[1] firms sell factors of production on the goods market.
[2] goods and services offered for sale on the goods market are
purchased by firms.
, [3] households combine factors of production and produce consumer
goods and services.
[4] households offer factors of production in the factor market.
Answer: [4] households offer factors of production in the factor market.
●● What does the letters A, B, C and D in the figure represent?
a) A represents factors of production
b) B represents goods and services
c) C represents foreign sector
d) D represents spending by firm
[1] only a is correct
[2] only b and c are correct
[3] only b and d are correct
[4] a and b are correct, while c and d are incorrect
Answer: [3] only b and d are correct
●● Which of the following is not an injection into the economy of South
Africa?
[1] A domestic company in South Africa sells leather to a client that is in
Italy.
