ECS1601 EXAM
QUESTIONS WITH
CORRECT VERIFIED
ANSWERS
, ECS1601 EXAM QUESTIONS WITH CORRECT VERIFIED ANSWERS
__________ is not a primary cause of government failure. - -Answer--2) The inefficient behaviour of the
market (correct)
____________ is NOT likely to cause a problem in the measurement of GDP.
[1] Pollution
[2] Smuggling
[3] Commercial farming
[4] Adjustment of original data - -Answer--[3] Commercial farming
_______________ would result due to the closure of the gold mines in South Africa.
[1] Seasonal unemployment.
[2] Structural unemployment.
[3] Cyclical unemployment.
[4] Frictional unemployment. - -Answer--[2] Structural unemployment.
1.7. Use the following two statements to -Answer- the question:
a. The primary function of government is to establish the framework within which the economy
operates.
b. A member of the government cannot be a member of a household.
[1] only a is correct.
[2] a is incorrect and b is correct.
[3] both a and b are correct.
[4] both a and b are incorrect. - -Answer--[1] only a is correct.
A complete business cycle is represented by movement from
1) A to B.
2) B to C.
3) A to C. (correct) - -Answer--3) A to C. (correct)
A country's balance of payments ...
[1] records all the economic activities which take place within the boundaries of the
country.
[2] will show a deficit on the current account if the value of exports exceeds the value of
imports.
[3] keep records of all transactions that its households, firms, and government complete with
households, firms, and government outside the country.
[4] records all the transactions in the rest of world. - -Answer--[3] keep records of all transactions that its
households, firms, and government complete with households, firms, and government outside the
country.
,A decrease in leakages from the circular flow of income and spending leads to _________ in the
multiplier. - -Answer--3) an increase (correct)
A decrease in the marginal propensity to consume - -Answer--4) lowers the value of the multiplier.
(correct)
A decrease in the tax rate in the Keynesian model will ...
[1] shift the aggregate spending curve downwards.
[2] shift the consumption curve upwards.
[3] swivel the consumption curve downwards
[4] swivel the aggregate spending curve upwards - -Answer--[4] swivel the aggregate spending curve
upwards
A depreciation in the value of the rand on the foreign exchange market is most likely to lead to____ - -
Answer--a higher demand for South African exports
A depreciation of the rand against the dollar will lead to a decrease in ...
[1] the price of imported goods in South Africa.
[2] the price of South African products sold in the US.
[3] the price of petrol in South Africa.
[4] the number of tourists from the US visiting South Africa. - -Answer--[2] the price of South African
products sold in the US.
A depreciation of the rand may have inflationary consequences in South Africa because it______. - -
Answer--increases the costs of exports
A depreciation of the rand may have inflationary consequences in South Africa because it______. - -
Answer--increases the costs of imported goods.
A flow variable is defined as a variable that is measured over a period. Which one of the following
variables is not an example of a flow variable?
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production - -Answer--[2] The balance on Sibahle's savings account
A form of expenditure that does NOT depend on real GDP or income is called - -Answer--3) autonomous
expenditure. (correct)
A neutral tax ...
[1] distort the allocation of resources.
[2] lower the welfare of society.
[3] has a low effect on relative prices.
, [4] act as a disincentive to the owners of factors of production. - -Answer--[3] has a low effect on relative
prices.
A News Website headline reads: "SARB Reduces Repo Rate for Third Time This Year."
This headline indicates that the SARB is most likely trying to...
[1] decrease the cost of credit.
[2] increase the liquidity deficit of the private banks.
[3] increase the SARB current market rates.
[4] decrease inflationary pressures in the economy. - -Answer--[1] decrease the cost of credit.
A person is considered unemployed, when he/she is ...
[1] a fulltime student.
[2] not looking for a job because there are no jobs available where he/she stays.
[3] a fulltime stay home dad or mom who looks after the family.
[4] temporarily laid off. - -Answer--[4] temporarily laid off.
A person should specialize in the activity ...
[1] with the lowest cost.
[2] which he likes the most.
[3] with the lowest opportunity cost.
[4] closest to home. - -Answer--[3] with the lowest opportunity cost.
A simultaneous decrease in aggregate supply and an increase in aggregate demand will always - -
Answer--3) increase the price level. (correct)
A specific tariff imposed on the imports of motor vehicles will - -Answer--2) increase the level of
domestic production of motor vehicles. (correct)
A surplus on the current account implies ...
[1] the value exports are more than the value of imports.
[2] the value exports are less than the value of imports.
[3] a net inflow of foreign capital.
[4] a net outflow of foreign capital. - -Answer--[1] the value exports are more than the value of imports.
A tax is progressive if - -Answer--3) the marginal tax rate increases as income increases. (correct)
Accommodation policy by the South African Reserve Bank may involve ...
(a) supplying funding for low-cost housing.
(b) providing liquidity to the banks by means of repurchase agreements.
(c) selling of government stock to contribute to lower interest rates.
(d) quantitative easing.
[1] only (a) and (c) are correct.
[2] only (a) and (d) are correct.
QUESTIONS WITH
CORRECT VERIFIED
ANSWERS
, ECS1601 EXAM QUESTIONS WITH CORRECT VERIFIED ANSWERS
__________ is not a primary cause of government failure. - -Answer--2) The inefficient behaviour of the
market (correct)
____________ is NOT likely to cause a problem in the measurement of GDP.
[1] Pollution
[2] Smuggling
[3] Commercial farming
[4] Adjustment of original data - -Answer--[3] Commercial farming
_______________ would result due to the closure of the gold mines in South Africa.
[1] Seasonal unemployment.
[2] Structural unemployment.
[3] Cyclical unemployment.
[4] Frictional unemployment. - -Answer--[2] Structural unemployment.
1.7. Use the following two statements to -Answer- the question:
a. The primary function of government is to establish the framework within which the economy
operates.
b. A member of the government cannot be a member of a household.
[1] only a is correct.
[2] a is incorrect and b is correct.
[3] both a and b are correct.
[4] both a and b are incorrect. - -Answer--[1] only a is correct.
A complete business cycle is represented by movement from
1) A to B.
2) B to C.
3) A to C. (correct) - -Answer--3) A to C. (correct)
A country's balance of payments ...
[1] records all the economic activities which take place within the boundaries of the
country.
[2] will show a deficit on the current account if the value of exports exceeds the value of
imports.
[3] keep records of all transactions that its households, firms, and government complete with
households, firms, and government outside the country.
[4] records all the transactions in the rest of world. - -Answer--[3] keep records of all transactions that its
households, firms, and government complete with households, firms, and government outside the
country.
,A decrease in leakages from the circular flow of income and spending leads to _________ in the
multiplier. - -Answer--3) an increase (correct)
A decrease in the marginal propensity to consume - -Answer--4) lowers the value of the multiplier.
(correct)
A decrease in the tax rate in the Keynesian model will ...
[1] shift the aggregate spending curve downwards.
[2] shift the consumption curve upwards.
[3] swivel the consumption curve downwards
[4] swivel the aggregate spending curve upwards - -Answer--[4] swivel the aggregate spending curve
upwards
A depreciation in the value of the rand on the foreign exchange market is most likely to lead to____ - -
Answer--a higher demand for South African exports
A depreciation of the rand against the dollar will lead to a decrease in ...
[1] the price of imported goods in South Africa.
[2] the price of South African products sold in the US.
[3] the price of petrol in South Africa.
[4] the number of tourists from the US visiting South Africa. - -Answer--[2] the price of South African
products sold in the US.
A depreciation of the rand may have inflationary consequences in South Africa because it______. - -
Answer--increases the costs of exports
A depreciation of the rand may have inflationary consequences in South Africa because it______. - -
Answer--increases the costs of imported goods.
A flow variable is defined as a variable that is measured over a period. Which one of the following
variables is not an example of a flow variable?
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production - -Answer--[2] The balance on Sibahle's savings account
A form of expenditure that does NOT depend on real GDP or income is called - -Answer--3) autonomous
expenditure. (correct)
A neutral tax ...
[1] distort the allocation of resources.
[2] lower the welfare of society.
[3] has a low effect on relative prices.
, [4] act as a disincentive to the owners of factors of production. - -Answer--[3] has a low effect on relative
prices.
A News Website headline reads: "SARB Reduces Repo Rate for Third Time This Year."
This headline indicates that the SARB is most likely trying to...
[1] decrease the cost of credit.
[2] increase the liquidity deficit of the private banks.
[3] increase the SARB current market rates.
[4] decrease inflationary pressures in the economy. - -Answer--[1] decrease the cost of credit.
A person is considered unemployed, when he/she is ...
[1] a fulltime student.
[2] not looking for a job because there are no jobs available where he/she stays.
[3] a fulltime stay home dad or mom who looks after the family.
[4] temporarily laid off. - -Answer--[4] temporarily laid off.
A person should specialize in the activity ...
[1] with the lowest cost.
[2] which he likes the most.
[3] with the lowest opportunity cost.
[4] closest to home. - -Answer--[3] with the lowest opportunity cost.
A simultaneous decrease in aggregate supply and an increase in aggregate demand will always - -
Answer--3) increase the price level. (correct)
A specific tariff imposed on the imports of motor vehicles will - -Answer--2) increase the level of
domestic production of motor vehicles. (correct)
A surplus on the current account implies ...
[1] the value exports are more than the value of imports.
[2] the value exports are less than the value of imports.
[3] a net inflow of foreign capital.
[4] a net outflow of foreign capital. - -Answer--[1] the value exports are more than the value of imports.
A tax is progressive if - -Answer--3) the marginal tax rate increases as income increases. (correct)
Accommodation policy by the South African Reserve Bank may involve ...
(a) supplying funding for low-cost housing.
(b) providing liquidity to the banks by means of repurchase agreements.
(c) selling of government stock to contribute to lower interest rates.
(d) quantitative easing.
[1] only (a) and (c) are correct.
[2] only (a) and (d) are correct.
