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ECS1601 ASSESSMENT 4 2024
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ECS1601 ASSESSMENT 4 2024
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On calculations please check if it is the same figures, like the exchange rates, thecurrency and denominations, so read careful before you take the answer, all answers
may be there for all the different figures, but if you do not read carefully you will
t6ake the wrong one; hence you need to read careful
,In the circular flow of income and spending, that is, the basic flow of income and spending
between households and firms supplemented by the foreign, financial and government
sectors…
a.
exports are leakages from the circular flow.
b.
investment is a leakage from the circular flow.
c.
savings are injections into the circular flow.
d.
imports are injections into the circular flow.
e.
taxes are leakages from the circular flow.
Which of the following statements regarding rating agencies is correct?
a.
Corruption is not considered when rating agencies assign an investment rating to an
economy.
b.
The level of public debt is not considered when rating agencies assign an investment rating
to an economy.
c.
Countries that fall under non-investment grade are also referred to as “junk status”
economies.
d.
Credit ratings are only assigned at the macroeconomic level.
Which of the following are three major flows in the economy as a whole?
a. Spending, total income, and production.
b. Total spending, total income, and total production.
c. Saving, total investment, and spending.
d. Total income, spending, and saving.
Suppose a state-owned enterprise issues a bond to raise capital to fund its business
expansion. In this case, the state-owned enterprise is a (i)__________ , and the
individuals who purchase the bonds are (ii)__________.
a. (i) borrower; (ii) deficit units.
b. (i) deficit unit; (ii) surplus units.
,c. (i) surplus unit; (ii) savers.
d. (i) savers; (ii) deficit units.
If GDP is greater than GDE,
a. the country has a deficit in the current account.
b. exports are greater than imports.
c. taxes are more than government expenditure.
d. the country is consuming more than
Nationalisation refers to …
a. the acquisition of commercial companies by the public sector.
b. the acquisition of private companies by the public sector.
c. the acquisition of public companies by the private sector.
d. the acquisition of mining companies by the private sector.
Which one of the following statements is not the macroeconomic objective used for
measuring the performance of the South African economy and that of other countries?
a. The South African economy has experienced sluggish economic growth over the past
five years.
b. The South African economy records the lowest rate of employment.
c. South Africa records the highest increase in the immortality rate since the Covid-
19 pandemic and the July unrest.
d. South Africa’s balance of payments has been stable over the past years.
The quantity of money in an economy is …
, a. determined by the interaction between the cost of credit and the demand for
money.
b. fixed by the South African Reserve Bank.
c. dependent on the money supplied.
d. determined by the Minister of Finance.
e. decided jointly by the Reserve Bank and the government, as it has important
implications for inflation targeting.
Neutrality of taxes means that
a.
taxes have the minimum possible effect on relative prices.
b.
the recipients generated by a particular government expenditure should pay for the
goods and services concerned.
c.
the tax burden is spread equally amongst taxpayers.
d.
compliance and administration costs are kept as low as possible.
Suppose that the price of Brent Crude oil, which is a South African import, falls and is
denominated in US Dollars. What is the impact of the price decrease on the foreign
exchange market?
a.
The supply of Dollars will increase and the Rand will appreciate.
b.
The supply of Dollars will decrease and the Rand will depreciate.
c.
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