ECS1601 Assignment 4 Semester 2 2023 (SOLUTIONS/ANSWERS)

ECS1601 Assignment 4 Semester 2 2023 (SOLUTIONS/ANSWERS) Question 1 Answer saved Marked out of 1.00 Flag question Question text The distribution effects of inflation are best described by … a. the elderly benefiting at the expense of the young. b. creditors benefiting at the expense of debtors. c. borrowers benefiting at the expense of lenders. d. the poor benefiting at the expense of the rich. Clear my choice Question 2 Answer saved Marked out of 1.00 Flag question Question text The appropriate policy to combat cost-push inflation would be to increase ______, which will be illustrated by __________. a. interest rates; leftward shift of the aggregate demand curve b. productivity; rightward shift of the aggregate supply curve c. wages; leftward shift of the aggregate supply curve d. government spending; rightward shift of the aggregate demand curve Question 3 Answer saved Marked out of 1.00 Flag question Question text In the case of demand-pull inflation, an increase in the general price level is accompanied by … in total production. In the case of cost-push inflation, an increase in the general price level is accompanied by…in total production. a. a decrease; an increase b. an increase; a decrease c. an increase; an increase d. a decrease; a decrease Clear my choice Question 4 Answer saved Marked out of 1.00 Flag question Question text If the inflation rate increases and nominal interest rate is unchanged, then _________. a. the nominal interest rate will decrease b. the real interest rate will increase c. the real interest rate will decrease d. the real interest rate will be unchanged Question 5 Answer saved Marked out of 1.00 Flag question Question text If inflation accelerates due to the increase in the price of oil (an import), the best policy to combat such inflation in a country with a high unemployment rate, would be to... a. implement contractionary monetary policy, illustrated by the rightward shift of the AD curve. b. apply incomes policy, illustrated by a leftward shift of the AS curve. c. respond with demand management policy that will increase aggregate demand, which will be illustrated by a rightward shift of the AD curve. d. apply the supply-side policy that will increase aggregate supply, which will be illustrated by a rightward shift of the AS curve. Clear my choice Question 6 Answer saved Marked out of 1.00 Flag question Question text Demand-pull inflation can be combated by … a. increasing government spending. b. decreasing personal income tax. c. lowering interest rates. d. raising interest rates. Clear my choice Question 7 Answer saved Marked out of 1.00 Flag question Question text Which of the following statements regarding the types of unemployment is correct? a. An increase in the aggregate demand for goods and services can reduce cyclical unemployment. b. Structural unemployment can be attributed mainly to a temporarily decline in the aggregate demand for goods and services. c. Seasonal unemployment is usually associated with economic recessions. d. Frictional unemployment is caused mainly by political frictional which gives rises to lower economic growth. Clear my choice Question 8 Answer saved Marked out of 1.00 Flag question Question text Kyla works for a fruit packing company in the Western Cape. However, she has been not working during certain periods of the year. This is an example of … a. frictional unemployment b. structural unemployment c. cyclical unemployment d. seasonal unemployment Question 9 Answer saved Marked out of 1.00 Flag question Question text Suppose Botswana’s population comprise 8 000 000 people who are unemployed, 3 000 000 students, 7 000 000 home-makers, 2 000 000 not economically active, employed, and people who are not in the age category 15 to 65 years. What does Botswana’s labour force population equal? Answer: Question 10 Answer saved Marked out of 1.00 Flag question Question text Available data indicate that the level of real GDP will continue to decrease over the next five years. This suggests that the amount of unemployment will be___ ____. a. cyclical; increasing b. seasonal; increasing c. frictional; increasing d. structural; decreasing Question 11 Answer saved Marked out of 1.00 Flag question Question text Suppose people are in the labour force, people are employed in the public sector and 10 000 000 people are employed in the private sector. How many people are unemployed? Answer: 7000000 Question 12 Answer saved Marked out of 1.00 Flag question Question text You are given the following information about a country: The rate of change in prices increases while the unemployment rate falls. This is … a. an upward movement along the Phillips curve. b. a leftward shift of the Phillips curve. c. a rightward shift of the Phillips curve. d. a downward movement along the Phillips curve. Clear my choice Time left 0:42:13 Question 13 Answer saved Marked out of 1.00 Flag question Question text Suppose people are in the labour force, people are employed in the public sector and 20 000 000 people are employed in the private sector. What is the unemployment rate? round to two decimals Answer: 28.33% Question 14 Answer saved Marked out of 1.00 Flag question Question text Which of the following is the cost of unemployment? (a) tends to give rise to crime (b) a decrease in tax revenue (c) an increase in government spending a. a) and (b) are correct b. a), (b) and (c) c. b) and (c) are correct d. only (a) is correct Question 15 Answer saved Marked out of 1.00 Flag question Question text Use the following information to answer the question: Amount of Economic Activity (Nominal): Gross Domestic Production GDP per capita 14,3 trillion 14,7 trillion 70 Million 73 Million What is the growth rate in nominal GDP from 2019 to 2020? Round to two decimals. Answer: 2.8% Question 16 Answer saved Marked out of 1.00 Flag question Question text Suppose that real GDP for 2009 was 1 000 and the rate of economic growth between 2009 and 2010 was 5%, what is real GDP for 2010? a. 1 050 b. 1 005 c. 950 d. 1 500 Time left 0:41:22 Question 17 Answer saved Marked out of 1.00 Flag question Question text Economic growth is calculated by … a. rate of change in nominal GDP. b. rate of change in real GDP. c. nominal GDP multiplied by the population growth rate. d. real GDP divided by the population. Clear my choice Question 18 Answer saved Marked out of 1.00 Flag question Question text Which of the following statements regarding economic growth is correct? a. With the recent use of high-speed computers, economists are able to measure the size of the informal sector accurately. b. Real gross domestic product (GDP) measures the impact of economic growth on pollution and environmental degradation. c. An increase in real GDP per capita implies that income is more evenly distributed in the economy. d. When measuring economic growth, changes in prices and in the population should be taken into account. Question 19 Answer saved Marked out of 1.00 Flag question Question text Which one of the following is not a source of economic growth? a. capital widening b. imports c. government spending d. natural resources Clear my choice Question 20 Answer saved Marked out of 1.00 Flag question Question text Use the following information to answer the question: Amount of Economic Activity (Nominal): Gross Domestic Production Population 18,4 billion 15,8 billion 2,3 Million 2,35 million Gross Domestic Product (GDP) per capita is one of the economic indicators used to measure the performance of an economy and is commonly used as a broad measure of average living standards or economic wellbeing. GDP per capita equals gross domestic product divided by population. What is the growth rate in GDP per capita from 2019 to 2020? Round to two decimals. Answer: -15.958