Economics 1B
ECS1601
1
, D. EXERCISES ON LEARNING UNITS
This part of the tutorial letter provides you with the opportunity to practise the diagrams, calculations and
explanations that you have to master for ECS1601. Use this section as follows:
Read the question carefully.
Answer each question in the space provided.
Evaluate your answer using the suggested answers in section 2.
D1 EXERCISES ON LEARNING UNIT 2
1.1 Complete the following table: (10)
Function of money Medium of exchange Store of value
Motive for holding money for this
function
Symbol used to depict this motive for
holding money
Does this form part of the active or
passive demand for money?
Main determinant of this motive for
holding money
Is the relationship positive or
negative?
1.2 (a) Draw a diagram that illustrates the relationship between the interest rate level and the demand
for active balances. (2)
2
ECS1601
1
, D. EXERCISES ON LEARNING UNITS
This part of the tutorial letter provides you with the opportunity to practise the diagrams, calculations and
explanations that you have to master for ECS1601. Use this section as follows:
Read the question carefully.
Answer each question in the space provided.
Evaluate your answer using the suggested answers in section 2.
D1 EXERCISES ON LEARNING UNIT 2
1.1 Complete the following table: (10)
Function of money Medium of exchange Store of value
Motive for holding money for this
function
Symbol used to depict this motive for
holding money
Does this form part of the active or
passive demand for money?
Main determinant of this motive for
holding money
Is the relationship positive or
negative?
1.2 (a) Draw a diagram that illustrates the relationship between the interest rate level and the demand
for active balances. (2)
2
