ECS1601 ASSESSMENT 4 SEM 2 OF 2024 EXPECTED QUESTIONS AND ANSWERS
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Course
Economics IB (ECS1601)
Institution
University Of South Africa (Unisa)
THIS DOCUMENT CONTAINS ECS1601 ASSESSMENT 4 SEM 2 OF 2024 EXPECTED QUESTIONS AND ANSWERS. USE IT AS A GUIDE AND FOR PRACTICE TO HELP YOU SCORE ABOVE 75%
Started on Friday, 30 August 2024, 9:24 PM
State Finished
Completed on Friday, 30 August 2024, 9:53 PM
Time taken 29 mins 8 secs
Question 1 Spending on goods produced in the _____ is a/an ______ into the circular flow of goods and services in the domestic economy.
Complete
Marked out of (i) domestic economy; leakage
1.00 (ii) foreign sector; Leakage
(iii) foreign sector; injection
Flag
question (iv) domestic economy; injection
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d. (ii) and (iii) are correct. tutorials
Question 2 Identify the various leakages and injections into the circular flow of income and spending.
Complete a) Leakages: imports, savings
Marked out of
b) Injection: exports, investment
1.00 c) Injection: X + I + G
d) Leakages: S+ Z
Flag
question
a. a, b, c and d
b. b, c and d
c. b and c
d. a and b
Question 3 With reference to the circular flow of goods and services, complete the following sentence: Suppose that Reneilwe runs a
Complete construction company, where she uses capital and labour. After completing projects, the payment for services will remunerate
Marked out of _______to ________in the ________ market.
1.00
Flag a. wages; capital; factor
question
b. interest; capital; factor
c. wages; labour; goods
d. wages; entrepreneurship; factor
Question 4 Which of the following statements is/are NOT an example of macroeconomics?
Complete
Marked out of a) An increase in the general price level in the economy.
1.00
b) Shoprite (Africa’s largest supermarket retailer)'s decision to keep the price of basic goods unchanged even when inflation is rising.
Flag
c) The price of oranges at the supermarket.
question
a. a and b
b. a, b and c
c. a only
d. b and c
Question 5 When the income level increases, the demand for …..money increases, which results in a/an …..increase.
Complete
Marked out of a. transaction; passive balance
1.00
b. speculative; active balance
Flag
question c. speculative; passive balance
d. transaction; active balance
,Question 6 Which of the following statements is/are correct about the difference between direct and indirect financing?
Complete
Marked out of
a) Indirect financing takes place when the deficit units borrow directly from the surplus units with the assistance of a financial
1.00 intermediary.
Flag b) Direct financing takes place when the deficit units borrow directly from the surplus units without the assistance of a commercial
question bank.
c) Indirect financing takes place when surplus units deposit funds with financial intermediaries and the deficit units borrow from South
African Reserve Bank.
b and c
a
a and b
b
a and c
Question 7 Suppose that South Africa demands L2 units of currency, which of the following will result in an increase in the demand for money?
Complete
Marked out of a. There is an increase in the interest rate by the South African Reserve Bank to fight inflation.
1.00
b. There is an increase in income taxes in South Africa.
Flag
question c. There is a decrease in the number of grant recipients in South Africa.
d. The interest returns on nominal bonds falls.
Question 8 The South African Reserve Bank (SARB) holds cash reserves for commercial banks such as Absa, FNB, Capitec, Nedbank and
Complete Standard Bank; and supervises and regulates their activities to ensure a sound and efficient banking system. Which function of the
Marked out of
SARB is this?
1.00
Flag a. maintaining financial stability
question
b. service to the government
c. provision of economic and statistical services
d. formulation and implementation of monetary policy
Question 9 The SARB has decreased interest rates to ease financial pressures on households and firms during the harsh times for the economy in
Complete 2020. In the money market, the amount of money that people wish to hold for
Marked out of
1.00 (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.
Flag
question (iii) both transaction and speculative purposes will stay the same, illustrated by L curve.
a. (i), (ii) and (iii) are correct
b. (i) and (ii) are correct
c. Only (i) is correct
d. Only (ii) is correct
e. (ii) and (iii) are correct
Question 10 In 2022, the cost of paying a home loan, car loan and groceries in South Africa has increased faster than households’ incomes, due to
Complete rapidly rising interest rates and a decline in real income. In the money market, this would be illustrated by which diagram?
Marked out of
1.00
Flag
question
, a. [3]
b. [1]
c. [2]
d. [4]
Question 11 Which one of the following does not pertain to fiscal policy?
Complete
Marked out of a. The minister of finance
1.00
b. tax increases
Flag
question c. The budget deficit
d. private investment
e. government spending cuts
Question 12 Buyelwa earns a monthly salary of R10 000, is levied an income tax rate of 10%, and has no fixed property or long-term investments.
Complete Tshepiso earns a monthly salary of R30 000, is levied an income tax rate of 25% and is also levied a capital gains tax rate of 18% on
Marked out of the interest she earns on her Old Mutual unit trusts. This illustrates the _____________ criterion for a good tax.
1.00
Flag a. regressive
question
b. administrative simplicity
c. neutrality
, d. equity
Question 13 Which of the following statements is/are correct?
Complete (a) Privatisation of Denel is the transfer of ownership from a private enterprise to the government.
Marked out of
(b) An example of nationalisation is when the South African Reserve Bank transfers ownership to the government.
1.00 (c) One of the arguments in favour of privatisation is that the privatised firm may attract foreign direct investment and charge higher
prices to both domestic and international customers.
Flag
question
b and c
a, b and c
a and b
b
Question 14 The tax and income of two South African households, A and B, are as follows:
Complete
Marked out of Household A Household B
1.00
Income (R) 5 000 1 500
Flag
question PAYE (R) 1 500 200
VAT-Paid on Goods (R) 300 300
Tax Paid on Fuel (R) 800 600
According to the table, which of the following is correct?
(i) PAYE is a progressive tax,
(ii) VAT is a progressive tax.
(iii) Taxes on fuel are regressive taxes.
a. (iii) is correct.
b. (i) and (iii) is correct.
c. (ii) and (iii) are correct.
d. (i) and (ii) are correct.
e. (i), (ii) and (iii) are correct.
Question 15 One of the following is an instrument of trade policy.
Complete
Marked out of a. balance of payments
1.00
b. gross domestic product
Flag
question c. import tariff
d. foreign exchange reserves
e. currency depreciation
Question 16 The financial account is a component of the balance of payments. Which of the following transactions would be recorded in the
Complete account?
Marked out of
1.00 a. South Africans purchasing shares on the JSE
Flag
question b. importing rubber from Thailand for the production of tyres in South Africa
c. American Corporations purchasing land and buildings in South Africa
d. sales of machinery from South Africa to China
Question 17 The question is based on the following diagram:
Complete
Marked out of
1.00
Flag
question
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