ECS1601 Exam Prep — Economics IB (Macroeconomics I)
Semester 2, 2026 | Questions, Answers & Rationales
Exam Overview
| Item | Details |
|||
| Module Code | ECS1601 |
| Module Name | Economics IB (Macroeconomics I) |
| NQF Level | 6 |
| Credits | 12 |
| Prescribed Textbook | Mohr, P., Van Zyl, C., & Pretorius, A. (2018). Understanding
Macroeconomics (2nd ed.). Pretoria: Van Schaik. |
| Assessment Type | Multiple Choice / ShortAnswer |
| Coverage | Learning Units 1–5 (Circular Flow, Public Sector, Monetary Sector, Foreign
Sector, Macroeconomic Objectives) |
| Language | English |
| Instructions | Choose the best answer. Rationales are provided for each question. |
Table of Contents
| Topic | Questions |
,|||
| Topic 1: Basic Economic Concepts & Scarcity | Q1–Q10 |
| Topic 2: The Circular Flow of Income & Spending | Q11–Q25 |
| Topic 3: Macroeconomic Variables (GDP, GNI, etc.) | Q26–Q38 |
| Topic 4: The Public Sector & Fiscal Policy | Q39–Q52 |
| Topic 5: The Monetary Sector & Monetary Policy | Q53–Q68 |
| Topic 6: The Foreign Sector & International Trade | Q69–Q82 |
| Topic 7: The ADAS Model & Macroeconomic Equilibrium | Q83–Q95 |
| Topic 8: Macroeconomic Objectives & Policy Synthesis | Q96–Q105 |
Questions, Answers & Rationales
TOPIC 1: Basic Economic Concepts & Scarcity
Q1. Which of the following best describes the fundamental economic problem of scarcity?
A. Resources are unlimited, but wants are limited.
B. Wants are unlimited, but resources are limited.
C. Both wants and resources are unlimited.
D. Both wants and resources are limited.
Answer: B
,Rationale: Scarcity is the basic fact of economic life: households are confronted with
unlimited wants but have limited resources with which to satisfy those wants. Scarcity
necessitates choice.
Q2. The factors of production in an economy are:
A. Households, capital, land, entrepreneurship
B. Government, household, firms, natural resources
C. Natural resources (land), labour, capital, and entrepreneurship
D. Human capital, land, natural resources, technology
Answer: C
Rationale: The four factors of production are natural resources (land), labour, capital, and
entrepreneurship.
Q3. Which of the following correctly matches the factor of production with its
remuneration?
A. Natural resources — rent; Labour — salaries and wages; Capital — interest;
Entrepreneurship — profit
B. Natural resources — profit; Labour — rent; Capital — wages; Entrepreneurship —
interest
C. Natural resources — interest; Labour — profit; Capital — rent; Entrepreneurship —
wages
, D. Natural resources — wages; Labour — interest; Capital — profit; Entrepreneurship —
rent
Answer: A
Rationale: The remuneration for natural resources is rent, for labour is salaries and wages,
for capital is interest, and for entrepreneurship is profit.
Q4. The price of apples at a supermarket is an example of a:
A. Macroeconomic variable
B. Microeconomic variable
C. Flow variable
D. Stock variable
Answer: B
Rationale: The price of a single good (apples) is a microeconomic variable.
Macroeconomics deals with aggregates such as the general price level, national income,
and unemployment.
Q5. An increase in the general price level (inflation) in the economy is an example of:
A. A microeconomic variable
B. A macroeconomic variable
Semester 2, 2026 | Questions, Answers & Rationales
Exam Overview
| Item | Details |
|||
| Module Code | ECS1601 |
| Module Name | Economics IB (Macroeconomics I) |
| NQF Level | 6 |
| Credits | 12 |
| Prescribed Textbook | Mohr, P., Van Zyl, C., & Pretorius, A. (2018). Understanding
Macroeconomics (2nd ed.). Pretoria: Van Schaik. |
| Assessment Type | Multiple Choice / ShortAnswer |
| Coverage | Learning Units 1–5 (Circular Flow, Public Sector, Monetary Sector, Foreign
Sector, Macroeconomic Objectives) |
| Language | English |
| Instructions | Choose the best answer. Rationales are provided for each question. |
Table of Contents
| Topic | Questions |
,|||
| Topic 1: Basic Economic Concepts & Scarcity | Q1–Q10 |
| Topic 2: The Circular Flow of Income & Spending | Q11–Q25 |
| Topic 3: Macroeconomic Variables (GDP, GNI, etc.) | Q26–Q38 |
| Topic 4: The Public Sector & Fiscal Policy | Q39–Q52 |
| Topic 5: The Monetary Sector & Monetary Policy | Q53–Q68 |
| Topic 6: The Foreign Sector & International Trade | Q69–Q82 |
| Topic 7: The ADAS Model & Macroeconomic Equilibrium | Q83–Q95 |
| Topic 8: Macroeconomic Objectives & Policy Synthesis | Q96–Q105 |
Questions, Answers & Rationales
TOPIC 1: Basic Economic Concepts & Scarcity
Q1. Which of the following best describes the fundamental economic problem of scarcity?
A. Resources are unlimited, but wants are limited.
B. Wants are unlimited, but resources are limited.
C. Both wants and resources are unlimited.
D. Both wants and resources are limited.
Answer: B
,Rationale: Scarcity is the basic fact of economic life: households are confronted with
unlimited wants but have limited resources with which to satisfy those wants. Scarcity
necessitates choice.
Q2. The factors of production in an economy are:
A. Households, capital, land, entrepreneurship
B. Government, household, firms, natural resources
C. Natural resources (land), labour, capital, and entrepreneurship
D. Human capital, land, natural resources, technology
Answer: C
Rationale: The four factors of production are natural resources (land), labour, capital, and
entrepreneurship.
Q3. Which of the following correctly matches the factor of production with its
remuneration?
A. Natural resources — rent; Labour — salaries and wages; Capital — interest;
Entrepreneurship — profit
B. Natural resources — profit; Labour — rent; Capital — wages; Entrepreneurship —
interest
C. Natural resources — interest; Labour — profit; Capital — rent; Entrepreneurship —
wages
, D. Natural resources — wages; Labour — interest; Capital — profit; Entrepreneurship —
rent
Answer: A
Rationale: The remuneration for natural resources is rent, for labour is salaries and wages,
for capital is interest, and for entrepreneurship is profit.
Q4. The price of apples at a supermarket is an example of a:
A. Macroeconomic variable
B. Microeconomic variable
C. Flow variable
D. Stock variable
Answer: B
Rationale: The price of a single good (apples) is a microeconomic variable.
Macroeconomics deals with aggregates such as the general price level, national income,
and unemployment.
Q5. An increase in the general price level (inflation) in the economy is an example of:
A. A microeconomic variable
B. A macroeconomic variable
