ECS2602 EXAM PACK 2025

ECS2602
EXAM PACK




FOR ASSISTANCE WITH THIS MODULE +27 67 171 1739

, OCTOBER NOVEMBER 2021




Part 1 of 14 - ECS2602 Exam_2021 Syllabus

Question 1 of 30 3.33 Points
This question is based on the following consumption function: C = 300 + 0.4Yp

If the level of disposable income (Yp) were to increase by 100, the level of autonomous
consumption will be:




. A. 340
,
. B. 400

~ © 6.100
-
. D. 300
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Part 2 of 14 - ECS2602 Exam_ 2021 Syllabus

Question 2 of 30 3.33 Points
This question is based on the following information regarding the goods market:

Marginal propensity to consume = 0.8

Which of the following policy actions will increase the level of output and income by a R1 000?

1. An increase in government spending of R200.
2. A decrease in taxation of R200.
3. A decrease in taxation of R250.




© ° A.Only1

, e C.

1 and 2


n
e D. Only 2
o
° E.1and3
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Part 3 of 14 - ECS2602 Exam_2021 Syllabus

Question 3 of 30 3.33 Points
Which one of the following statements is INCORRECT, referring to the balanced budget
multiplier? Assume that c = 0.6. The government increases Its spending by 300 and taxes also
increase by 300, then ...




there will be still a net expansionary effect on the equilibrium level of output and
income, although there is an increase of R300 in taxes.


- ' Cc
the multiplier effect for an increase in government spending will be higher than the
backwards multiplier effect for an increase in taxes since the multiplier starts to
operate from 300 in the case of government spending and the case of taxes it
operates through the change in disposable income.

i
a.
=




e D.

increase in the level of output and income will be 750 due to the increase in
government spending and the decrease in the level of output and income will be
450 due to the increase in taxes. The net effect is an increase of 300 in the level of
output and income.

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Part 4 of 14 - ECS2602 Exam 2021 Syllabus

, Question 4 of 30 3.33 Points
This question is based on the following data for the country XYZ for 2016.
Marginal propensity to consume = 0.5
Autonomous consumption = R600 million
Investment spending = R40 million
Government spending = R280 million
Taxes = R300 million

Yr =R1 700 milllion
In the goods market, the equilibrium level of income is , and to reach the full-employment
level of income, government spending (G) must increase by ,




° C A.

R 1240 million; G must increase by R460

——..




° s B.

R 1240 million; G must increase by R230


e 2 C.

R 1540 million; G must increase by R80

° D.

R 1540 million; G must increase by R160

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Part 5 of 14 - ECS2602 Exam_ 2021 Syllabus

Question 5 of 30 3.33 Points
Study the following diagram and answer the question:
Which one of the following statements is correct?