Microeconomics studies _________ while macroeconomics studies _______
1. businesses; people.
2. what is happening in the economy currently; what happened in the past.
3. the performance of the private sector; the performance of the government.
4. the overall price level; price determination in a single industry
5. individual decision makers; the economy's overall performance.
Which of the following statements is/are correct?
a. Real GDP is the most used measure of how much output was produced in a country during a
specific year.
b. Real GDP is the most commonly used indicator of the level of total economic activity that
took place in a country during a specific year.
c. If the population increases at a faster rate than the real GDP, the real per capita GDP will
increase.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4
Which of the following variable are endogenous in the goods market model?
1. The level of output and income and investment spending.
2. Marginal propensity to consume and the level of output and income.
3. The level of output and income.
4. Investment spending.
The difference between expenditure on the gross domestic product and gross domestic
expenditure (GDE) is that …
1. expenditure on the gross domestic product includes both imports and exports, while GDE
includes exports and excludes imports.
2. expenditure on the gross domestic product includes exports and excludes imports, while
GDE includes both imports and exports.
3. expenditure on the gross domestic product includes exports and excludes imports, while
GDE includes imports and excludes exports.
,4. expenditure on the gross domestic product includes imports and excludes exports, while
GDE includes exports and excludes imports.
In South Africa, grants such as the Old Age Pension and the Child Support Grant are termed:
1. Transfer payments and they are a part of government’s final consumption expenditure.
2. Transfer payments and they are excluded from government’s final consumption expenditure.
3. Donations and they are a part of government’s final consumption expenditure.
4. Donations and they are excluded from government’s final consumption expenditure.
The biggest contributor to gross fixed capital formation in South Africa is:
1. General government
2. The foreign sector
3. Private business enterprises
4. Public corporations
The demand for goods is influenced by the following factors:
a. The behaviour of households.
b. Government spending and taxes.
c. The variables that influence investment spending.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4 is correct
A decrease in income will cause a decrease in …
a. autonomous consumption.
b. induced consumption.
c. disposable income.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. Only c
,Which of the following is true in terms of consumption spending?
a. An increase in the marginal propensity to consume will change the vertical intercept of the
consumption function.
b. Autonomous consumption decreases if the availability of credit decreases.
c. The equilibrium level of output and income will decrease if the marginal propensity to save
decreases.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4
Which of the following statements is/are correct?
a. A change in the marginal propensity to consume will cause a change in consumption
spending.
b. If the marginal propensity to consume increases, consumption spending will increase.
c. If the marginal propensity to consume decreases, savings will increase.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4
The following is based on the following diagrams. Consider the consumption functions of
country A and country B
Which of the following statements is/are correct?
a. The consumption function for country A is: C = 2 000 + 0.7YD.
b. The consumption function for country B is: C = 1 000 + 0.9YD.
, c. In country A autonomous consumption is higher than in country B.
d. In country B induced consumption is definitely higher than in country A if the level of
disposable income is R5 000.
e. If the level of disposable income is R5 000 in both countries then consumption spending in
country B is higher.
1. a, b, c, d and e
2. Only a, b, c and d
3. Only b, c, d and e
4. Only a, b, d and e
5. Only a, b and c
To counter the impact of a decrease in consumer confidence and investor confidence on the
level of output and income, the government can …
a. increase government spending and decrease taxes which is represented by an upward shift
of the demand for goods curve and via the multiplier effect the level of output and income
increases.
b. decrease government spending and increase taxes which is represented by a downward
shift of the demand for goods curve and via the multiplier effect the level of output and income
increases.
c. use an expansionary fiscal policy.
d. use a contractionary fiscal policy.
1. b and c
2. a and b
3. c and d
4. a and c
5. b and d
Based on the following goods market model:
In the goods market model a decrease in taxes will result in …
a. a downward shift of the ZZ curve.
b. an increase in autonomous consumption.
1. businesses; people.
2. what is happening in the economy currently; what happened in the past.
3. the performance of the private sector; the performance of the government.
4. the overall price level; price determination in a single industry
5. individual decision makers; the economy's overall performance.
Which of the following statements is/are correct?
a. Real GDP is the most used measure of how much output was produced in a country during a
specific year.
b. Real GDP is the most commonly used indicator of the level of total economic activity that
took place in a country during a specific year.
c. If the population increases at a faster rate than the real GDP, the real per capita GDP will
increase.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4
Which of the following variable are endogenous in the goods market model?
1. The level of output and income and investment spending.
2. Marginal propensity to consume and the level of output and income.
3. The level of output and income.
4. Investment spending.
The difference between expenditure on the gross domestic product and gross domestic
expenditure (GDE) is that …
1. expenditure on the gross domestic product includes both imports and exports, while GDE
includes exports and excludes imports.
2. expenditure on the gross domestic product includes exports and excludes imports, while
GDE includes both imports and exports.
3. expenditure on the gross domestic product includes exports and excludes imports, while
GDE includes imports and excludes exports.
,4. expenditure on the gross domestic product includes imports and excludes exports, while
GDE includes exports and excludes imports.
In South Africa, grants such as the Old Age Pension and the Child Support Grant are termed:
1. Transfer payments and they are a part of government’s final consumption expenditure.
2. Transfer payments and they are excluded from government’s final consumption expenditure.
3. Donations and they are a part of government’s final consumption expenditure.
4. Donations and they are excluded from government’s final consumption expenditure.
The biggest contributor to gross fixed capital formation in South Africa is:
1. General government
2. The foreign sector
3. Private business enterprises
4. Public corporations
The demand for goods is influenced by the following factors:
a. The behaviour of households.
b. Government spending and taxes.
c. The variables that influence investment spending.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4 is correct
A decrease in income will cause a decrease in …
a. autonomous consumption.
b. induced consumption.
c. disposable income.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. Only c
,Which of the following is true in terms of consumption spending?
a. An increase in the marginal propensity to consume will change the vertical intercept of the
consumption function.
b. Autonomous consumption decreases if the availability of credit decreases.
c. The equilibrium level of output and income will decrease if the marginal propensity to save
decreases.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4
Which of the following statements is/are correct?
a. A change in the marginal propensity to consume will cause a change in consumption
spending.
b. If the marginal propensity to consume increases, consumption spending will increase.
c. If the marginal propensity to consume decreases, savings will increase.
1. a, b and c
2. Only a and b
3. Only a and c
4. Only b and c
5. None of the options 1 to 4
The following is based on the following diagrams. Consider the consumption functions of
country A and country B
Which of the following statements is/are correct?
a. The consumption function for country A is: C = 2 000 + 0.7YD.
b. The consumption function for country B is: C = 1 000 + 0.9YD.
, c. In country A autonomous consumption is higher than in country B.
d. In country B induced consumption is definitely higher than in country A if the level of
disposable income is R5 000.
e. If the level of disposable income is R5 000 in both countries then consumption spending in
country B is higher.
1. a, b, c, d and e
2. Only a, b, c and d
3. Only b, c, d and e
4. Only a, b, d and e
5. Only a, b and c
To counter the impact of a decrease in consumer confidence and investor confidence on the
level of output and income, the government can …
a. increase government spending and decrease taxes which is represented by an upward shift
of the demand for goods curve and via the multiplier effect the level of output and income
increases.
b. decrease government spending and increase taxes which is represented by a downward
shift of the demand for goods curve and via the multiplier effect the level of output and income
increases.
c. use an expansionary fiscal policy.
d. use a contractionary fiscal policy.
1. b and c
2. a and b
3. c and d
4. a and c
5. b and d
Based on the following goods market model:
In the goods market model a decrease in taxes will result in …
a. a downward shift of the ZZ curve.
b. an increase in autonomous consumption.
