Macroeconomics 1st year [University] Notes [ECO10B]
ECS1501 Assignment 04 semester 01 2023 Exam (elaborations) ECS1501 - Economics IA Economics for South African Students, ISBN: 9780627033421
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Economics Ecs1601 (ECS1601)
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Question text
The circular flow model reveals that a decrease in South African imports will … .
a.
increase revenue and domestic production in South Africa
b.
increase revenue to foreign firms
c.
decrease South African imports
d.
increase output and income in the rest of the world
Question text
Identify the various leakages and injections into the circular flow of income and
spending. a) Leakages: imports, savings b) Injection: exports, investment c) Injection: X +
I + G d) Leakages: S+ Z
a.
b, c and d
b.
a, b, c and d
c.
a and b
d.
b and c
Question text
Pick n Pay, Spar, Checkers and Shoprite came together to fix the price of gas heaters in
July 2022. This was so that they could keep the price at a level to ensure that all four
stores remained profitable. On which area of study in economics does this focus?
,d.
When additional cash is kept in a cheque account, this represents the function of money
as a store of value.
Question text
When the inflation rate is expected to exceed the target rate by a significant margin, the
South African Reserve Bank (SARB) will tend to
a.
increase the repurchase rate (repo rate).
b.
purchase government bonds on the open market.
c.
reduce the cost of credit to the banks.
d.
use moral suasion to persuade banks to provide more loans to their clients.
e.
decrease the repo rate.
Question text
The South African Reserve Bank (SARB) holds cash reserves for commercial banks such as
Absa, FNB, Capitec, Nedbank and Standard Bank; and supervises and regulates their
activities to ensure a sound and efficient banking system. Which function of the SARB is
this?
a.
service to the government
b.
formulation and implementation of monetary policy
Zenokuhle applied for a credit card at Absa Bank a week ago and her application was
approved. She now uses it to pay for petrol and other essentials. Which of the following
statements is true about credit card use?
a.
Credit cards are money because they function as a medium of exchange.
b.
Credit cards and electronic money are forms of money, as they can be used as means of
payment.
c.
Credit cards are a means to facilitate payment and cannot be regarded as money.
d.
Credit cards are not seen as money.
Question 12
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Question text
The SARB has decreased interest rates to ease financial pressures on households and
firms during the harsh times for the economy in 2020. In the money market, the amount
of money that people wish to hold for
(i) transaction purpose will increase, illustrated by a rightward shift of the L1 curve.
(ii) speculative purpose will increase, illustrated by a downward slide along the L2 curve.
(iii) both transaction and speculative purposes will stay the same, illustrated by L curve.
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