Exam (elaborations)
ECS1601 Assignment 4
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Economics IB (Macroeconomics I) - ECS1601 Assignment 4
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10/7/23, 11:12 AM Assessment 4: Attempt review 2023 ECS1601-23-S2 Online assessments Assessment 4
QUIZ
Started on Saturday, 7 October 2023, 10:08
AM
State Finished
Completed on Saturday, 7 October 2023, 11:12
AM
Time taken 1 hour 3 mins
Marks 16.00/20.00
Grade 80.00 out of 100.00
Question 1
Correct
Mark 1.00 out of 1.00
One of the objectives of the South African Reserve
Bank is inflation targeting, and the inflation target for
South Africa is between 3 and 6 per cent. There
happens to be an excess demand for goods and
services, which has led to an increase in the general
price level, that is, inflation.
If the inflation rate were above the target, it would be
appropriate for the South African Reserve Bank to …
a. increase the repo rate.
b. lower the interest rate level.
c. buy government bonds.
d. increase the quantity of money.
Refer to section 10.5 of the prescribed textbook.
Question 2
Correct
Mark 1.00 out of 1.00
Which one of the following is NOT an effect of higher
inflation?
a. Redistribution of wealth from the lender to the
borrower.
b. A decrease of the real value of existing
savings.
c. An increase in the standard of living.
d. An increase in the cost of living.
Refer to section 10.3 of the prescribed textbook.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=14000513&cmid=622825 1/9
,10/7/23, 11:12 AM Assessment 4: Attempt review
Question 3
Correct
Mark 1.00 out of 1.00
A depreciation of the rand may have inflationary
consequences in South Africa because it…
a. Discourages savings.
b. Discourages exports.
c. Increases the costs of exports.
d. Increases the costs of imported goods.
Refer to section 10.4 of the prescribed textbook.
Question 4
Incorrect
Mark 0.00 out of 1.00
The distribution effects of inflation are best described
by …
a. the poor benefiting at the expense of the rich.
b. creditors benefiting at the expense of
debtors.
c. the elderly benefiting at the expense of the
young.
d. borrowers benefiting at the expense of
lenders.
Refer to section 10.3 of the prescribed textbook.
Question 5
Correct
Mark 1.00 out of 1.00
The following question is based on the table below:
Month Consumer price index
2012 2013
January 50.3 60.2
February 52.4 61.1
April 53.2 63.1
May 55.5 64.2
June 56.1 65.3
What is the annual inflation rate for May 2013?
a. 15.68
b. 13.55
c. 1.74
d. 8.7
Refer to section 10.2 of the prescribed textbook.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=14000513&cmid=622825 2/9
,10/7/23, 11:12 AM Assessment 4: Attempt review
Question 6
Correct
Mark 1.00 out of 1.00
The appropriate policy measure to combat inflation
would be to …
a. increase aggregate spending.
b. increase the repo rate.
c. decrease taxes.
d. decrease productivity.
See section 10.4 of the prescribed textbook.
Question 7
Correct
Mark 1.00 out of 1.00
If workers in the mines are retrenched because of a
recession, what do you call this type of
unemployment?
a. structural unemployment
b. frictional unemployment
c. cyclical unemployment
d. seasonal unemployment
A recession causes a general downturn in the
economy, in which the demand for goods and services
decline and therefore some workers lose their jobs.
This is known as cyclical unemployment.
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, 10/7/23, 11:12 AM Assessment 4: Attempt review
Question 8
Correct
Mark 1.00 out of 1.00
Which one of the following will increase the
unemployment pool?
a. an increase in the number of people
looking for a job
b. an increase in the number of people who are
hired
c. a decrease in the number of people who are
laid off
d. a decrease in the number of new entrants in
the labour market
The unemployment pool increases if the inflow of
people is more than the outflow of people. A decrease
in the number of new entrants decreases the inflow
reducing the labour force and decreasing
unemployment. An increase in the number of people
who are hired increases the outflow, causing a decline
in the unemployment pool.
A decrease in the number of people who are laid off
decreases the inflow, causing a decline in the
unemployment pool. Thus an increase in the number
of people looking for a job increases the inflow, which
increases the unemployment pool.
Question 9
Correct
Mark 1.00 out of 1.00
Suppose 25 000 000 people are in the labour force, 8
000 000 people are employed in the public sector and
5 000 000 people are employed in the private sector.
How many people are unemployed?
Answer: 12000000
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