ECS1601 ASSIGNMENT 1 FOR 2024

Question 1 Not yet answered Marked out of 1.00 Flag question Question text Which one of the following is the main objective of macroeconomic policy? a. Unemployment b. Equitable distribution of income c. Price instability d. Sluggish economic growth Question 2 Not yet answered Marked out of 1.00 Flag question Question text Which of the following statements is/are correct in explaining the difference between production and income? a) Income is the remuneration that the factors of production receive for being part of the production process. b) Production is when business combines factors of production in planned activity to bring about goods and services to satisfy the needs and wants of society. c) Production is when a firm combines factors of production in planned activity to bring about goods that only satisfy society’s wants. d) Income is the reward that the factors of production receive for not taking part in the production process. a. a and b b. a and c c. b and d d. a, b, c and d yet answered Marked out of 1.00 Flag question Question text Which one of the following statements is true about causality and correlation? a. Causality between two variables always implies correlation. b. Causation between two variables proves correlation. c. An example of correlation is when an increase in the value of imports causes a rise in economic growth. d. Correlation between variables occurs when two variables have a relationship Question 4 Not yet answered Marked out of 1.00 Flag question Question text Identify the various leakages and injections into the circular flow of income and spending. a) Leakages: imports, savings b) Injection: exports, investment c) Injection: X + I + G d) Leakages: S+Z a. a and b b. b, c and d c. a, b, c and d d. b and c Question 5 Not yet answered Marked out of 1.00 Flag question Question text The two basic participants in the economy of South Africa are ……… a. households and firms. b. firms and government. c. firms and the Reserve Bank. d. households and government Question 6 Not yet answered Marked out of 1.00 Flag question Question text Which of the following is/are correct regarding the distinction between microeconomics and macroeconomics? a) An increase in the general price level in the economy is an example of macroeconomic variables. b) The SARB decided to keep the repo rate unchanged at 3.5%; this is in line with expectations of most economists. c) The price of oranges at the supermarket is an example of the microeconomic variables. a. b and c b. a only c. a and b d. a, b and c Question 7 Not yet answered Marked out of 1.00 Flag question Question text Which of the following statements is/are incorrect in explaining the tax being treated as leakage in the circular flow of income between household and firms? a) Tax is the part of income that is received by households but then paid to government. b) Tax is taken out of the circular flow of income. c) Households can spend it on goods and services. d) Taxi is an amount that is withdrawn or leaked from the circular flow of income. a. b, c and d b. a, b and c c. b and c d. c only Question 8 Not yet answered Marked out of 1.00 Flag question Question text Which one of the following statements is true about causality and correlation? a. Causality between two variables always implies correlation. b. Causation between two variables proves correlation. c. An example of correlation is when an increase in the value of imports causes a rise in economic growth. d. Correlation between variables occurs when two variables have a relationship Question 9 Not yet answered Marked out of 1.00 Flag question Question text In the 2015 budget speech, the Minister of Finance announced an increase in taxes amounting to R17 billion in the 2015/16 financial year. In the context of the circular flow, this increase in taxes will be a(n ) ... a. injection. b. withdrawal. c. saving. d. investment. Question 10 Not yet answered Marked out of 1.00 Flag question Question text Which of the following statements is correct about the primary objective of the SARB? a. SARB protects the value of the currency in the interest of balanced and sustainable economic growth in the Republic. b. SARB does not need to consult the cabinet member responsible for national financial matters since it performs it functions independently. c. SARB’s objective is to sell government security to commercial banks. d. SARB’s objective is to make use of the repo rate to influence economic activities. Question 11 Not yet answered Marked out of 1.00 Flag question Question text Which of the following statements are correct? a) The use of money eliminates the need for a double coincidence of wants associated with a barter economy. b) An economy in which goods are traded for other goods is called a barter economy. c) Money consists of notes and coins only. A. a, b and c B. a and b C. a and c D. b and c E. a only Question 12 Not yet answered Marked out of 1.00 Flag question Question text The commercial bank’s ability to create money is decreased when… a. individuals choose to deposit their funds at the ABC bank. b. bankers borrow from the SARB. c. the SARB increases the reserve requirement ratio. d. the banking lending rate increases. Question 13 Not yet answered Marked out of 1.00 Flag question Question text In the money market, there is…between active balances and the interest rate. a. a positive relationship b. an inverse relationship c. a complementary relationship d. no relationship Question 14 Not yet answered Marked out of 1.00 Flag question Question text Which one of the following statements is true about the South African Reserve Bank? a. The South African Reserve Bank uses an accommodation policy to drain excess liquidity from the banking system. b. It accepts deposits from individuals. c. It is not the only bank that can issue notes. d. It is the banker to the government Clear my choice Question 15 Not yet answered Marked out of 1.00 Flag question Question text The figure below illustrates the demand for money for transaction (L1) and speculative motives (L2) in South Africa: If South Africa’s economy grows, one would expect a. curves L1 and L2 to shift to the right. b. curves L1 and L2 to shift to the left. c. no effect on curve L1, but a rightward shift of curve L2. d. a rightward shift of curve L1 and no effect on curve L2. Question 16 Not yet answered Marked out of 1.00 Flag question Question text A decrease in the interest rate… a. lowers the opportunity cost of money and leads to an increase in the quantity of money demanded. b. raises the opportunity cost of money and leads to an increase in the quantity of money demanded c. lowers the opportunity cost of money and leads to a decrease in the quantity of money demanded. d. raises the opportunity cost of money and leads to a decrease in the quantity of money demanded. e. does not have any effect on the quantity of money demanded.