Assessment 6
Semester 2 2024
ECS1601
Question 1
A depreciation of the rand may have inflationary consequences in South Africa because
it…
a.
Increases the costs of exports.
b.
Discourages savings.
c.
Increases the costs of imported goods.
d.
Discourages exports.
Question 2
In the AD-AS model, an expansionary fiscal policy may lead to a…
a.
rightward shift of aggregate demand and demand-pull inflation.
b.
leftward shift of aggregate demand and demand-pull inflation.
c.
rightward shift of aggregate supply and cost-push inflation.
d.
leftward shift of aggregate supply and cost-push inflation.
Question 3
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.
government spending; rightward shift of the aggregate demand curve
c.
productivity; rightward shift of the aggregate supply curve
d.
wages; leftward shift of the aggregate supply curve
Question 4
Demand-pull inflation can be combated by …
a.
raising interest rates.
b.
lowering interest rates.
c.
increasing government spending.
d.
decreasing personal income tax.
Question 5
The distribution effects of inflation are best described by …
a.
borrowers benefiting at the expense of lenders.
b.
creditors benefiting at the expense of debtors.
c.
Semester 2 2024
ECS1601
Question 1
A depreciation of the rand may have inflationary consequences in South Africa because
it…
a.
Increases the costs of exports.
b.
Discourages savings.
c.
Increases the costs of imported goods.
d.
Discourages exports.
Question 2
In the AD-AS model, an expansionary fiscal policy may lead to a…
a.
rightward shift of aggregate demand and demand-pull inflation.
b.
leftward shift of aggregate demand and demand-pull inflation.
c.
rightward shift of aggregate supply and cost-push inflation.
d.
leftward shift of aggregate supply and cost-push inflation.
Question 3
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.
government spending; rightward shift of the aggregate demand curve
c.
productivity; rightward shift of the aggregate supply curve
d.
wages; leftward shift of the aggregate supply curve
Question 4
Demand-pull inflation can be combated by …
a.
raising interest rates.
b.
lowering interest rates.
c.
increasing government spending.
d.
decreasing personal income tax.
Question 5
The distribution effects of inflation are best described by …
a.
borrowers benefiting at the expense of lenders.
b.
creditors benefiting at the expense of debtors.
c.
