LEARNING UNIT
Welcome to the second part of your introduction to economics. We hope that you will find this module mentally stimulating and worthwhile.
The purpose of the module is to gain insight into macroeconomic theory and variables such as total production and income of a country, e...
This is the study guide for ECS1601 and contains the study
instructions for all the learning units.
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Contents
Page
Learning unit 0
Introduction....................................................................................................................... 3
Learning unit 1
Production, income and spending in the mixed economy ................................................... 8
Learning unit 2
The monetary sector ........................................................................................................ 16
Learning unit 3
The public sector .............................................................................................................. 28
Learning unit 4
The foreign sector ............................................................................................................ 38
Learning unit 5
Measuring the performance of the economy .................................................................... 47
Learning unit 6
Income determination in a simple Keynesian macroeconomic model ............................... 57
Learning unit 7
Keynesian models including the government and the foreign sector ................................ 79
Learning unit 8
More on macroeconomic theory and policy ...................................................................... 88
Learning unit 9
Inflation ........................................................................................................................... 96
Learning unit 10
Unemployment .............................................................................................................. 104
Learning unit 11
Economic growth and business cycles ....................................................................... 110
, 3 ECS1601/001
Introduction
LEARNING UNIT
Welcome to the second part of your introduction to economics. We hope that you will find this module
mentally stimulating and worthwhile.
PURPOSE OF THE
MODULE
The purpose of the module is to gain insight into macroeconomic theory and variables such as total
production and income of a country, economic growth, unemployment, inflation, and the balance of
payments.
MODULE OUTCOMES
After you have studied this module, you should be able to
■ explain the functioning of the economy as a whole
■ assess the performance of the economy
CRITICAL CROSS-
FIELD OUTCOMES
As a student enrolled for a tertiary qualification, you will be exposed to a formative learning experience
that should not only educate you in the chosen discipline but also form your character.
The formative nature of the qualification is described in the critical cross-field outcomes that all tertiary
qualifications aim to achieve. Critical cross-field outcomes refer to broad generic outcomes encompassing
various areas, which all qualifications and standards should aim to promote.
After you have completed this tertiary qualification, you should be able to
■ identify and solve problems in such a way that you display responsible decision making using
critical and creative thinking
■ work effectively with others as a member of a team, group, organisation or community
■ organise and manage yourself and your activities responsibly and effectively
■ collect, analyse, organise and critically evaluate information
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■ communicate effectively using visual, mathematical and/or language skills in the modes of oral
and/or written persuasion
■ use science and technology effectively and critically, showing responsibility towards the
environment and health of others
■ demonstrate an understanding of the world as a set of related systems by recognising that
problem solving does not happen in isolation
In order to contribute to your full personal development as a student (and to that of every other student)
as well as the social and economic development of society as a whole, any programme of learning should
have the underlying intention of making an individual aware of the importance of
• reflecting on and exploring a variety of strategies to learn more effectively
• participating as responsible citizens in the life of local, national and global communities
• being culturally and aesthetically sensitive across a range of social contexts
• exploring education and career opportunities
• developing entrepreneurial opportunities
THE PRESCRIBED BOOK
The following book is prescribed for this module:
Mohr, P, Fourie, L & Associates. 2015. Economics for South African
students.
5th edition. Pretoria: Van Schaik.
NOTE: If you already have a copy of the 4th edition of the textbook, you may use it if you prefer not to
buy the 5th edition. We shall provide a copy of the MO001 (i.e. this study guide) for the 4th edition under
Additional Resources on MyUnisa. Note, however, that all other study material will only refer to the 5th
edition of the textbook, and that section numbers will therefore not correspond to that of the 4th edition.
The prescribed book can be obtained from the University's official booksellers (refer to the list of
official booksellers and their addresses listed in the my Studies @ Unisa brochure). If you have
difficulty in locating the book at these booksellers, please contact the Prescribed Book Section at
telephone 012 429-4152 or e-mail vospresc@unisa.ac.za
STUDYING
ECONOMICS
The main requirements for the study of economics are a willingness to think and an active approach to
learning. Economics is not a subject that can simply be memorised – it has to be understood. This means
that you will always have to think about what you are studying and that you must try to understand the
work. The solution is to study actively. Use a pen and paper to work out each argument by drawing
diagrams, doing calculations, and writing down the logic of the argument. It is not sufficient simply to
read the prescribed book and underline or highlight the key concepts.
Do not omit any of the chapters prescribed. These chapters follow a logical pattern. If you skip some
chapters, you will not be able to follow or understand the reasoning in the study guide as a whole.
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