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Dashboard / My courses / ECS1601-23-S1 / Online assessments / Assessment 6
Started on Tuesday, 6 June 2023, 9:49 AM

State Finished
Completed on Tuesday, 6 June 2023, 10:04 AM
Time taken 15 mins 14 secs
Marks 15.00/20.00
Grade 75.00 out of 100.00
Question 1
Incorrect
Mark 0.00 out of 1.00
Which of the following statements is/are incorrect with regard to the main purpose of economic theory?
a) Economic theory aims to capture every detail of a phenomenon under study.
b) Economic theory explains how the real economy functions.
c) Economic theory aims to predict changes in economic conditions and its impact on the whole economy.
d) Economic theory serves as an underpinning for the formulation and analysis of economic policies.
a. a and b 
b. a and c
c. a only
d. a, b, c and d
The purpose of the economic theory is not to capture every detail of a phenomenon under study.
The correct answer is: a only
Question 2
Incorrect
Use the following statements to answer the question:

a) Financial institutions channel funds from surplus economic units to deficit economic units.
b) Financial institutions channel funds from surplus household to deficit household units only.
a. Both statements a and b are incorrect.

b. Statement b is correct and a is incorrect. 
c. Only statement a is correct.
d. Both statements a and b are correct.
financial institutions channel funds to those whose expenditure is greater than the income, that is, deficit economic units. A deficit unit can
be a firm that wants to expand or government financing a certain project, as well as a household, who for example, wants to buy a house.
government financing a certain project, as well as a household, who for example, wants to buy a house. in addition to the households. See
box 2-3 in your textbook.
The correct answer is: Only statement a is correct.
Question 3
Incorrect
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Which of the following statements are correct?

Dashboard
a) South/African
My courses / ECS1601-23-S1
government raises most of/ its
Online assessments
tax revenue / personal
through Assessment 6 tax and value-added tax.
income
b) Personal income tax in South Africa is a progressive tax.
c) Government should implement restrictive fiscal policy measures during a recession.
d) Privatization could improve efficiency, but it might have an adverse effect on employment.
a. a, b, c
b. b, c, d
c. a, b, d
d. All of the statements are correct. 
Value Added Tax (VAT) and Personal Income tax are the largest contributors to tax revenue; the former is regressive whilst the latter is
progressive. The government would use expansionary fiscal policy in times of a recession. See Chapter 3. The arguments for privatization are
provided in Box 3-1.
The correct answer is: a, b, d
Question 4
Correct
A tax is progressive if
a. lower income groups pay a smaller percentage of their taxable income in the form of tax than higher income groups pay. 
b. it takes a greater percentage of the taxable income of lower income groups than of higher income groups.
c. it takes the same percentage of the taxable income of lower and higher income groups.
d. it changes the economic behaviour of taxpayers.
A tax is progressive when the ratio of tax paid to taxable income increases as taxable income increases. In other words, a progressive tax
means that people with high incomes pay a larger percentage of their income in tax than people with lower incomes. Personal income tax
(PAYE) in South Africa is an example of a progressive tax.
The correct answer is: lower income groups pay a smaller percentage of their taxable income in the form of tax than higher income groups
pay.
Question 5
Correct
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What impact is the increase in the supply of Dollars on price and the supply curve’s direction?
Dashboard
(a) The price /ofMy
thecourses / ECS1601-23-S1
Dollar becomes / Online assessments / Assessment 6
relatively lower.
(b) The Rand appreciates against the Dollar.
(c) The supply curve for the Dollar will shift to the left.
(d) The equilibrium point will be lower down on the Dollar demand curve.
Statement a and b.
All the statements are correct. 
Statements b and c are correct.
Statements b, c and d are correct.
Statements b and d are correct.
When the supply of dollars increases it means that the price of dollars becomes relatively lower in rand terms and therefore the rand
appreciates. This can be illustrated by a rightward shift of the dollar supply curve, and a new equilibrium point lower down on the dollar
demand curve.
The correct answers are: Statement a and b., All the statements are correct., Statements b and c are correct., Statements b, c and d are
correct., Statements b and d are correct.
Question 6
Correct
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.
There are five macroeconomic objectives: economic growth, full employment, price stability, balance of payments stability and equitable
income distribution.
The correct answer is: South Africa records the highest increase in the immortality rate since the Covid-19 pandemic and the July unrest.
Question 7
Incorrect
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The introduction of the foreign sector in the Keynesian model______ the slope of the consumption function. As a result, the multiplier
becomes______.
a. increases; larger
b. reduces; smaller
c. increases; smaller 
d. reduces; larger
When the foreign sector is introduced, the slope of the consumption function is reduced further. As a result, the multiplier becomes even
smaller. Please see example in page 156 of the prescribed book.
The correct answer is: reduces; smaller
Question 8
Correct
Which of the following is correct about the introduction of tax in the economy?
a. Taxes influence aggregate spending and income in a direct way by increasing spending and disposable income.
b. Disposable income is equal to c(1-t)Y.
c. In South Africa as your personal income increases the tax rate also increases. 
d. When the government raises the tax rate, the size of the multiplier remains unchanged.
Your answer is correct.
In South Africa, progressive tax is used where an individual pays more tax as their income increases. High-income earners pay a larger
percentage of tax compared to low-income earners. (See page 59 on prescribed book.)
Firstly, taxes represent a leakage, as money is withdrawn from the economy. For example, when the minister of finance announces that taxes
are to increase during a budget speech. This will cause people’s income after tax (disposable income) to decrease. That is, they will have less
money available for spending. Hence, aggregate spending decreases. Secondly, disposable income is taxable income minus tax. Yd= Y-T, of
which T=t*Y or Yd= Y-tY. Thirdly, the multiplier is affected by the tax rate. This is because the tax rate reduces the slope of the consumption
function, which causes the multiplier to be small after the introduction of tax rate.
The correct answer is:

In South Africa as your personal income increases the tax rate also increases.
Information
CASE STUDY 1
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Study the information below and answer the questions that follow.
Article title: Cape Town’s renewable energy technology centre Saretec battling to meet demand for trained technicians
Saretec, with German assistance, was now partnering with Eskom in reskilling and upskilling workers from decommissioned coal-fired power
stations, starting with Komati in Mpumalanga, with two more expected to follow soon.
Modise told Habeck that without Saretec providing the necessary skills, it would be difficult for South Africa to achieve its Just Energy
Transition, which requires not only that South Africa wean itself off its current dependency on coal for some 80% of its electricity generation,
but also that, in the process, the country preserve the livelihoods of coal workers and their communities.
Germany, with France, the UK, the US and the European Union, last year pledged $8.5-billion to help finance South Africa’s Just Energy
Transition.
Germany’s support of Saretec began well before that, but Nhlapo told Daily Maverick that Saretec was to receive about €10-million of the
$8.5-billion from KFW to finance the building of a wind turbine tower and rooftop solar panels and storage batteries that would help the
institution avoid rolling blackouts, as well as provide a realistic training environment for its students.
Modise told Habeck that Saretec’s annual intake of students was between 150 and 200 for its shorter courses, but below 30 for its longer
and more intensive seven-month course which provided higher skills such as those required by wind turbine service technicians.
She suggested, in a later interview with German TV, that the constraints on training renewable energy technicians were also slowing South
Africa’s conversion to renewable energy.
Modise agreed, saying the only constraint on Saretec’s ability to train more technicians was the lack of infrastructure, particularly the need
for more workshops and laboratories, as the institute placed a lot of emphasis on practical training.
“The expansion of the infrastructure is necessary to serve the continent. We would definitely require support in that context to expand the
infrastructure, so if we need to take 100 or more students (on a long course) at one go, we can do that.”
One of Saretec students is Amanda Shayi, previously an Eskom electrical technician who is completing the seven-month Saretec course to
upgrade to becoming a wind turbine service technician, enthused about the course. She noted that her expertise had previously been in
wiring and maintaining the continuity of power.
Shayi has completed the first five months of the course in the Saretec workshops and is now doing in-service training at the Acciona wind
farm north of Cape Town.
[Adapted from Daily Maverick, accessed 17 Jan 2013]

Question 9
Correct
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Saretec was to receive about €10 million of the $8.5 billion pledged funds. At an exchange rate of €1 = R22.75, Saretec was to receive
227500000
 rand.
(Answer hint: Type in numbers only without spaces in between. Round to two decimals. E.g., 25000050.59)
Refer to section 4.3 in the prescribed textbook. The answer can be calculated using the given exchange rate. To determine the rand amount
Saretec was to receive, we multiply €10 million by the exchange rate.
The correct answer is: 227,500,000.00
Question 10
Correct
"One of the Saretec's students is Amanda Shayi, previously an Eskom electrical technician who is completing the seven-month Saretec
course to upgrade her skills, to become a wind turbine service technician, thus, maintaining the continuity of power." From the following
alternatives, what type of unemployment is applicable, and what type of policy, from which side, is being applied to tackle the
unemployment problem caused by the decommissioning of the coal-fired power stations?
a. Cyclical (demand deficiency); demand side.

b. Structural; supply side. 
c. Frictional; supply side.
d. Seasonal; demand side.
The unemployment problem caused by the decommissioning of the coal-fired power stations is applicable here due to the need to upgrade
skills or retrain. To tackle this type of unemployment, policies that would address skills shortage mustt be implemented as outlined in
Section 11.1 of the prescribed textbook.
The correct answer is: Structural; supply side.

Question 11
Correct
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Shayi has completed the first five months of the course at the Saretec workshops and is now doing in-service training at the Acciona wind
Dashboard
farm, north of/ Cape
My courses
Town. If/ Shayi
ECS1601-23-S1 / Online
is a Malawi citizen, assessments
which / Assessment
of the following is correct6regarding her contribution to GDP?
a. Shayi’s salary is not considered when measuring GDP in South Africa.

b. GDP only consists of income from South African citizens.
c. Salaries are not considered when measuring GDP.
d. Shayi’s salary is taken into consideration when measuring the South African GDP. 
The GDP is the total value of all final goods and services produced within the borders of a country, during a particular period (usually one
year). Therefore, all income of production factors received within the country, irrespective of who receives that income, forms part of the
South African GDP. See section 5.1 of the prescribed book.
The correct answer is: Shayi’s salary is taken into consideration when measuring the South African GDP.
Question 12
Correct
The fund pledged to help finance South Africa’s just energy transition are denoted in which currency?
(i) Rand
(ii) US dollar
(iii) British pound
a. (i), (ii) and (iii)

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)
Refer to section 4.3 in the prescribed textbook.
The correct answer is: (ii)

Information
CASE STUDY 1
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Transition.

Question 13
Incorrect
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Of the $8.5 billion pledged to help finance South Africa’s just energy transition, what percentage of this pledged funds will be received by
Saretec? (assume: €1 = $1.15)
(Answer hint: Type in numbers only, without spaces in between. Round off to two decimals. E.g., 0.59%)
Answer:
0.15%

First, convert the €10 million into the US dollar using the exchange rate (€1 = $1.15).
Second, determine the percentage using the converted €10 million which was to be received by Saretec and the total pledge of $8.5 billion.
Refer to section 3.4 as well as Box 1-3 in the prescribed textbook.
The correct answer is: 0.14%
Question 14
Correct
With regard to generating 80% of its electricity, South Africa needs to wean itself off of its existing reliance on coal, as it is detrimental to
human health and the general ecosystem. The environmental pollution emanating from coal mining is an example of _____.
(a) a public good
(b) positive externalities
(c) negative externalities

(d) externalities
a. a, b and c
b. b and d
c. d and c 
d. b, c, and d
Air pollution is an example of a negative externality. Externalities refer to a situation where positive or negative spill over effects, due to the
use or production of certain goods or services, are not reflected in the market prices. See section 3.1 of the study guide.
The correct answer is: d and c
Question 15
Correct
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Saretec has received financial assistance from Germany, to develop a wind turbine tower, rooftop solar panels, and storage batteries. This
Dashboard
will lead to a(/ n)My courses / ECS1601-23-S1 / Online assessments / Assessment 6
_____.
a. increase in spending in the circular flow of income and spending in the economy of South Africa 
b. decrease in spending which reduces income and spending from the circular flow of the South African economy
c. reduction of total expenditure from the circular flow of income and spending in the economy of South Africa
d. direct injection into South Africa’s goods market.
Financial assistance from Germany, to develop a wind turbine tower, rooftop solar panels and storage batteries, is an investment in South
Africa’s economy. Therefore, investment by firms means that income, production and spending will increase, indicating an injection in the
circular flow of income and spending. Refer to sec 1.4 and 1.5 of the prescribed book.
The correct answer is: increase in spending in the circular flow of income and spending in the economy of South Africa
Question 16
Correct
Suppose Saretec, with German assistance, is now partnering with Eskom to reskill and upskill workers from decommissioned coal-fired
power stations. Which of the five macroeconomic objectives will this initiative directly contribute to?
a. Economic growth.
b. Full employment. 
c. Balance of payments stability (or external stability).
d. Price stability.
e. Equitable distribution of income.
The reskilling and upskilling of workers will contribute to the alleviation of the unemployment problem caused by the decommissioning of
the coal-fired power stations. Refer to section 5.1 in the textbook.
The correct answer is: Full employment.
Information
CASE STUDY 2
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Climate Change
Dashboard / MyImplications: Economic Impacts
courses / ECS1601-23-S1 and Constraints
/ Online assessmentsin/ Western Cape,
Assessment 6 coastal areas.
2021 - 2040:
Water for basic needs will almost certainly become increasingly unavailable in the
Western Cape. Whilst desalination may provide a short- to medium-term option, in the longer term
the vulnerability of coastal infrastructure to extreme storm events will very likely negate this option.
Residents of massively expanding informal settlements such as Khayalitsha will spend much of their
days waiting in queues at standpipes where these exist, or paying exorbitant prices for tanker
water.
Personal health will very likely be compromised by poor sanitation. The majority of residents will
likely suffer from multiple illnesses, including spread of poverty-linked illnesses such as TB. Health
services, where they exist, will very likely be overwhelmed by the sick, malnourished, and the
injured from the many social conflicts. (Currently, the ongoing and future prevalence of COVID19
and/or other zoonotic outbreaks is unquantifiable, but as likely as not to be a significant factor in
terms of public health, and availability of over-stretched health services). Service provision will
become increasingly difficult, being unable to keep up with the rapidly expanding settlements as
people migrate in from across the sub-continent, driven off the land by climate impacts and social
disruption. Xenophobia will very likely increase and children will suffer serious trauma and harms
in exposure to violence, cultural disconnection and physical displacement.
Much of the Western Cape economy, dependent on agriculture, including wine-farming, and
tourism, will very likely be severely reduced, compromising farm work opportunities and those
across the tourism and hospitality sectors. Increasingly, the biodiversity attractions of the Cape
Floral Kingdom will be lost due to the increasingly unsuitable climate change and associated
extreme weather events, including extreme fire outbreaks, reducing the tourism potential of the
region and exacerbating unemployment and economic hardships.
2041 – 2060:
It is very likely that climate impacts will have devastated the agricultural sector in the
Western Cape, including viticulture, and the tourism and hospitality sector, given the collapse of
wine-farming, coastal zone attractions, and loss of the Cape Floral Kingdom. Coastal property prices
are likely to have collapsed due to sea-level rise and storm-surge coastal erosion and damage to
property and transport networks along the coastline. The provincial economy will likely struggle to
cope with rapidly rising social demands alongside collapse of the traditional economic sectors.
Water and sanitation provision, and health services will become increasingly scarce and diseases
rampant. Children will struggle to participate in educational activities, through economic hardship,
social disruption and their own health and wellbeing problems. Social conflict will almost certainly
rise everywhere as people struggle to get by, exacerbated by the constant in-flow of climate
refugees from elsewhere.
[Adapted from centre for Environmental Rights, accessed 17 Jan 2013]

Report title: Climate Change Implications for SA’s Youth
Link: https://cer.org.za/wp-content/uploads/2021/09/Nick-King-Report-Final.pdf
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Question 17
Correct
Much of the Western Cape economy is dependent on the agriculture sector, which is a main contributor to the country's GDP. Which of the
following best describes the effect of climate change on the economy of the Western Cape?
a. The real GDP will increase.

b. The real GDP will decrease. 
c. The nominal GDP per capita will increase.
d. The nominal GDP will remain unchanged.
The effect of climate change will decrease the real GDP or the economic growth rate in the province as it will have a negative impact on
various sectors in the region's economy and their contribution to the real GDP of the Western Cape economy. Refer to section 12.1 of the
prescribed textbook.
The correct answer is: The real GDP will decrease.
Question 18
Correct
In paragraph 3 of the case study, it is said that the Western Cape economy will likely be severely reduced, and unemployment exacerbated.
What type of unemployment will be exacerbated?
(i) Frictional unemployment
(ii) Seasonal unemployment
(iii) Cyclical unemployment
(iv) Structural unemployment
(v) Voluntary unemployment
a. (i), (ii), and (iii)

b. (ii) and (iii)
c. (iv) 
d. (i) and (iii)
e. (v)
Refer to types of unemployment, pages 227 to 229 in the prescribed textbook.

The correct answer is: (ii) and (iii)
Question 19
Correct
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The scarcity of resources mentioned in paragraph 1 of the case study is caused by _____, which has a negative effect on the aggregate supply
curve.
a. deterioration in weather conditions 

b. an increase in productivity
c. a decrease in productivity
d. improvement in weather conditions
Refer to Table 9-2 in the prescribed textbook.

The correct answer is: deterioration in weather conditions
Question 20
Correct
The climate change impact, described in the last paragraph of the case study, will likely result in _____.
(i) an increase in unemployment due to job losses in the agricultural, tourism, and hospitality sectors.
(ii) a decrease in total production in the economy of the Western Cape Province.
(iii) an increase in gross domestic product, ceteris paribus.

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Refer to Section 9.1 in the prescribed textbook.

The correct answer is: (ii) and (i)
◄ Assessment 5
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Started on Friday, 12 May 2023, 8:11 PM

State Finished
Completed on Friday, 12 May 2023, 8:16 PM
Marks 16.00/20.00
Question 1
Correct
Suppose there is a reduction in interest rates in the economy. This may cause …inflation and may result in … in production, income and
employment.
a. demand-pull; decreases
b. cost push; decreases
c. cost-push; increases
d. demand-pull; increases 
Refer to section 10.4 of the prescribed textbook.
Question 2
Correct
The appropriate policy to combat cost-push inflation would be to increase ______, which will be illustrated by __________.
a. interest rates; leftward shift of the aggregate demand curve

b. productivity; rightward shift of the aggregate supply curve 
c. government spending; rightward shift of the aggregate demand curve
d. wages; leftward shift of the aggregate supply curve
See sections 9.1 and 10.4 of the prescribed textbook.

Question 3
Incorrect
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Which one of the following will not be appropriate in an attempt to combat demand-pull inflation?
a. A decrease in government spending

b. Measures to decrease the productivity of labour
c. An increase in taxes
d. An increase in interest rates 
Question 4
Correct
Which of the following can cause demand-pull inflation?

[1] A decrease in interest rates which leads to an increase in consumption and investment spending.
[2] An increase in government spending on social wealth and education.

[3] A rise in the cost of import intermediate goods due to a depreciation of the domestic currency.
a. [1] and [2] 
b. [2]
c. [3]
d. [1]
e. [1], [2] and [3]
Question 5
Correct
The appropriate policy measure to combat inflation would be to …
a. decrease productivity.
b. increase aggregate spending.
c. increase the repo rate. 
d. decrease taxes.
See section 10.4 of the prescribed textbook.

Question 6
Correct
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In the AD-AS model, an expansionary fiscal policy may lead to a…

a. rightward shift of aggregate demand and demand-pull inflation. 

b. leftward shift of aggregate supply and cost-push inflation.
c. rightward shift of aggregate supply and cost-push inflation.
d. leftward shift of aggregate demand and demand-pull inflation.
Question 7
Correct
In the business cycle, the recession phase is followed by a/an …
a. upswing
b. trough 
c. peak
d. downswing
Refer to section 22.2 (the business cycles).
Question 8
Incorrect
In the business cycle, an economic expansion occurs…
a. at the trough.
b. between the trough and the peak.
c. at the peak.
d. between the peak and the trough. 

Question 9
Correct
MENU
The Phillips curve shows that an increase in aggregate demand will result in … and …
a. an increase in unemployment rate; a decrease in inflation rate.

b. a decrease in unemployment rate; a decrease in inflation rate.
c. a decrease in unemployment rate; an increase inflation rate. 
d. an increase in unemployment rate; a decrease in inflation rate.
The Phillips curve explains the trade-off between unemployment and inflation. As aggregate demand increases, the demand for labour rises,
unemployment rate falls. Increased employment (more people earning wages) results in increased demand and consumption and thus
higher inflation.
Question 10
Correct
During a downswing phase, cyclical unemployment will … and inflation will …
a. decrease; decrease.
b. increase; increase
c. decrease; increase.
d. increase; decrease. 
During a downswing, also known as a recession, the decrease in aggregate demand results in a decrease in the demand of labour in certain
sectors, and thus increased unemployment; this is cyclical unemployment. As aggregate demand falls and the unemployment rate rises,
inflation will fall.
Question 11
Correct
Which one of the following is not a source of economic growth?
a. government spending
b. capital widening
c. natural resources
d. imports 
Refer to section 22.3 (sources of economic growth).

Question 12
Correct
MENU
Economic growth is calculated by …

a. real GDP divided by the population.

b. rate of change in nominal GDP.
c. rate of change in real GDP. 
d. nominal GDP multiplied by the population growth rate.
Question 13
Correct
Suppose 60 000 000 people are in the labour force, 23 000 000 people are employed in the public sector and 20 000 000 people are
employed in the private sector. How many people are unemployed?
Answer: 17 000 000 
Question 14
Correct
employed in the private sector. What is the unemployment rate? round to two decimals
Answer:
28.33%

Question 15
Correct
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The phase of the business cycle, in which almost all available resources in the economy are in use, is referred to as…
a. the recovery phase.

b. the peak phase. 
c. the trough phase.
d. the expansion phase.
The business cycle is more or less the regular pattern of expansion (recovery) and contraction (recession) in economic activity around the
path of trend growth. One complete cycle, which usually lasts a number of years, consists of four elements:
a trough; an upswing or expansion (also called a boom); a peak; a downswing or contraction (also called a recession). During the recovery
phase, economic activity starts to increase and more resources, but not all available resources, are used. During the expansion phase,
economic activity continues to increase and more resources, but not all available resources, are used. A through phase is a lower turning
point during which the level of economic activity and the use of resources are low. Whilst during the peak phase (upper turning point),
economic activity is high and almost all available resources are used.
Question 16
Correct
Suppose Ghana’s population comprise 18 000 000 employed, 8 000 000 students, 5 000 000 home-maker, 7 000 000 not economically
active, 13 000 000 people who are unemployed, and 40 000 000 people who are not in the age category 15 to 65 years. What does Ghana’s
labour force population equal?
Answer: 31 000 000 
Refer to learning unit 11

Question 17
Correct
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You are given the following information about a country: The rate of change in prices increases while the unemployment rate falls. This is …
a. a leftward shift of the Phillips curve.

b. a downward movement along the Phillips curve.
c. an upward movement along the Phillips curve. 
d. a rightward shift of the Phillips curve.
The Phillips curve relates the inflation rate to the unemployment rate. Lower inflation is related to higher unemployment, and vice versa. A
downward movement along the Phillips curve indicates that as the inflation rate (rate of change in prices) falls, unemployment increases.
Whilst a rightward shift indicates that at each inflation rate, the level of unemployment is higher. The converse being a leftward shift
indicates that at each inflation rate, the level of unemployment is lower. Consequently, an upward movement along the Phillips curve
indicates that as the inflation rate (rate of change in prices) increases, unemployment falls.
Question 18
Incorrect
Use the following information to answer the question:
Amount of Economic Activity (Nominal): Population

Gross Domestic Production
2019 2020 2019 2020
351 billion 302 billion 58,6 Million 59,3 million
Gross Domestic Product (GDP) per capita is one of the economic indicators used to measure the performance of an economy and is
commonly used as a broad measure of average living standards or economic wellbeing. GDP per capita equals gross domestic product
divided by population. What is the growth rate in GDP per capita from 2019 to 2020? Round to two decimals.
Answer:
24.38

Refer to Learning unit 12 PowerPoint slide and chapter 12 in the prescribed textbook.
Question 19
Incorrect
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Amount of Economic Activity (Nominal): GDP per capita
2019 2020 2019 2020
351 billion 302 billion 58,6 million 59,3 million
What is the growth rate in nominal GDP from 2019 to 2020? Round to two decimals.
Answer:
-3.57%

Question 20
Correct
Which one of the following will increase the unemployment pool?
a. a decrease in the number of new entrants in the labour market

b. a decrease in the number of people who are laid off
c. an increase in the number of people looking for a job 
d. an increase in the number of people who are hired
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.
◄ Assessment 3
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Assessment 5 ►
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Started on Saturday, 15 April 2023, 10:29 AM

State Finished
Completed on Saturday, 15 April 2023, 10:34 AM
Marks 19.00/20.00
Question 1
Correct
If the government wishes to increase the equilibrium level of income by R250 million, it should ...
a. decrease government spending by R250 million.
b. increase the tax rate.
c. decrease government spending by R250 million, divided by the multiplier.
d.
increase government spending by more that R250 million.
e. increase government spending by less than R250 million. 
Government spending (G) in the Keynesian model is assumed to be autonomous and independent from the level of income (Y). It forms part
of autonomous spending in the Keynesian model. Thus, for the equilibrium level of income (Y) to increase by R250 million, the multiplier in
the model must be multiplied by an amount less than R250 million of government spending (G). The equilibrium level of income (Y) is
determined by multiplying the level of autonomous spending by the multiplier. See pages 164 to 166 in the prescribed book.
Question 2
Correct
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This question is based on the information below:

Based on the information above, what is the change in government spending required for the economy to reach full employment? (at each
step of your calculation, round off to 2 decimal places)
a. R1 311 million 
b. R2 229 million
c. R3 689 million
d. R2 771 million
MENU
Question 3
Incorrect
With the given information, answer the question.
Autonomous consumption 50 billion

Autonomous government expenditure 20 billion
Autonomous investment 25 billion
Autonomous exports 40 billion

Autonomous imports 25 billion
Marginal propensity to consume 0.8
What is the equilibrium level of income?
Answer:
105 000 000 000


Question 4
Correct
MENU

Autonomous consumption R 250 billion
Autonomous government expenditure R 100 billion
Autonomous investment R 250 billion

Autonomous exports R 350 billion
Autonomous imports R 250 billion
What is autonomous aggregate spending?
Answer:
700 000 000 000


Question 5
Correct

Marginal propensity to consume 0,8
What is the size of the multiplier?
Answer:
5

Question 6
Correct
MENU
Which of the following statements is incorrect in terms of the Keynesian model about the effect of income tax?
a. Income tax will decrease autonomous spending, ceteris Paribus. 

b. Income tax will decrease induced consumption spending.
c. Income tax will decrease the income that can be spent on consumption.
d. Income tax will decrease the size of the multiplier.
Income tax will not affect autonomous spend at all.
Question 7
Correct
The question below is based on the following information:
Based on the information in the table, the response is an example of ______ policy.
a. contractionary fiscal
b. expansionary fiscal
c. contractionary monetary
d. expansionary monetary 
A decrease in the repo rate at which the SARB provides credit to the banks is an example of expansionary monetary policy, whereas an
increase in the repo rate at which the SARB provides credit to the banks is an example of contractionary monetary policy. An increase in
government spending (G) or reduction in taxes (T) is an example of expansionary fiscal policy, while a decrease in government spending (G)
or increase in taxes (T) is an example of contractionary fiscal policy.
See Section 9.3 in the prescribed book.

Question 8
Correct
MENU
Suppose that the South African economy is depicted by the following information:
Y = 10 500
S = -250 + 0.65Y
I = 500
G = 1 100
2 000 = 200 + mY
Which of the following is correct? (hint: when calculating, round off to three decimal places where applicable)
i. The multiplier in the economy is 2.857.

ii. The aggregate expenditure in the economy is 1 650.00.
iii. The equilibrium level of income is 2 009.70.
iv. The multiplier in the economy is 1.282.
a. (i), (ii) and (iv) are correct.

b. (ii) and (iv) are correct.
c. (ii) and (iii) are correct. 
d. (i) and (ii) are correct.
You have to calculate the autonomous expenditure, the multiplier and the equilibrium level of income to answer the question.
Question 9
Correct
Which of the following is true regarding an open economy in the Keynesian model?
Select one:
a. A larger marginal propensity to consume will increase the size of the multiplier. 
b. The impact of a change in aggregate expenditure is larger than in a closed economy.
c. When net exports increase, aggregate spending will decrease.
d. As investment spending decreases, the size of the multiplier decreases
Question 10
Correct
MENU
The question is based on the figure below:

The movement from X to X’ can result from …
Select one:
a. an increase in domestic income.
b. a decrease in domestic income.
c. a depreciation of the rand against the dollar. 
d. an appreciation of the rand against the dollar.
Question 11
Correct
Net exports are positive when…
Select one:
a. A nation’s exports are more than its investments.
b. A nation’s exports are less than its investments.
c. A nation’s imports are more than its exports.
d. A nation’s imports are less than its exports. 
Question 12
Correct
MENU
Which of the following is correct about an increase in interest rate in the Keynesian model?
Select one:
a. increase investment
b. decrease investment 
c. increase price levels
d. decrease price levels
Question 13
Correct
Expansionary demand management policy measures tend to …
Select one:
a. increase the real GDP, but reduce inflation.
b. increase both inflation and the level of unemployment.
c. increase the production cost, which will decrease total production.
d. increase both the real GDP and inflation. 
Question 14
Correct
A decrease in Investment spending will cause a/an
Select one:
a. increase in aggregate demand
b. increase in aggregate supply
c. decrease in aggregate supply
d. decrease in aggregate demand 
Question 15
Correct
MENU
This question is based on the diagram below:

A shift of the AS curve from AS to AS1 is the result of…
Select one:
a. an increase in productivity.
b. an increase in price level.
c. a decrease in consumption spending.
d. a decrease in labour productivity. 
The diagram illustrates a graph for the aggregate demand-aggregate supply model. Everything that impacts the total spending in the
economy affects the aggregate demand, and everything that influences production in the economy necessarily influences aggregate supply.
In the prescribed textbook, refer to the table 9-1 and table 9-2 as well as figures 9-4, 9-5 and 9-6.
Question 16
Correct
When the SARB decreases the interest rates, investment spending will increase, which will lead to an increase in aggregate spending and
aggregate demand in the economy. This chain of events is called …
Select one:
a. monetary policy transmission mechanism. 
b. transmission mechanism of contractionary monetary policy.
c. transmission mechanism of contractionary fiscal policy.
d. fiscal policy transmission mechanism.
Question 17
Correct
MENU
Within the AD-AS model, what will be the impact of expansionary demand management policy on the economy?
Select one:
a. real output and the price level will increase, while unemployment decrease. 
b. aggregate demand will decrease and the price level increase.
c. aggregate supply will decrease and the price level increase.
d. total production and employment will increase, while inflation decrease.
Question 18
Correct
Which one of the following chain of events best represents the monetary transmission mechanism?
Select one:
a. ∆i→∆I→∆A→∆AS→∆Y
b. ∆i→∆I→∆A→∆AD→∆Y 
c. ∆P→∆i→∆A→∆Y
d. ∆G→∆A→∆Y
Information
Have a look at the following diagram and answer the questions that follow:
MENU
Question 19
Correct
If the investment spending is R15 million, then the level of autonomous consumption is…
Answer:
25 000 000

Question 20
Correct
MENU
If the total income is R80 million and the investment spending is R15 million, then the level of total consumption is R…
Answer:
65 000 000

◄ Assessment 2
Jump to...
Assessment 4 ►
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Started on Monday, 27 March 2023, 12:55 PM

State Finished
Completed on Monday, 27 March 2023, 1:56 PM
Time taken 1 hour
Marks 15.00/20.00
Question 1
Incorrect
Import tariffs are generally used to protect domestic industries from foreign competition, they often lead to a(n )___________to society.
a. net welfare gain 
b. net welfare loss
c. net economic loss.
d. net economic profit.
e. economic growth.
Import tariffs, as part of a range of protectionist measures that governments can use, are duties or taxes imposed on products imported into
a country. They are generally used to protect domestic industries or sectors from foreign competition, but it can be shown that they result in
a net loss of welfare to the domestic economy. See page 70 in the prescribed book.
Question 2
Correct
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Dashboard
(a) The price /ofMy
thecourses / ECS1601-23-S1
Dollar becomes / Online assessments / Assessment 2
relatively lower.
Statement a and b.
demand curve.
Question 3
Correct
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. The demand for Dollars will decrease and the Rand will appreciate. 
d. The demand for Dollars will increase and the Rand will depreciate.
The decrease in the price of Brent Crude oil will decrease the demand for US Dollars, as this implies that less Rands will be needed to buy a
barrel of oil. Consequently, the decrease in the demand for Dollars will shift the demand curve to the left and the Rand will appreciate. See
Section 4.3 of the prescribed book.
Question 4
Correct
MENU
Zandile orders a pair of leather boots from France at a price of €275. The Rand/Euro exchange rate is R16,93/€1. Upon arrival in South Africa,
Dashboard
an import tax/ of
My courses
15% / ECS1601-23-S1
is levied on the imported /boots.
Online assessments
What is the total/ value
Assessment 2 imported in South African Rand?
of the item
a. R4 655,75
b. R698,36
c. R5 345,11 
d. R6 133,47
First, multiply the value of the boots in Euros by the exchange rate of R16,93/€1: €275,00 × 16,93 = R4 655,75
Then calculate the 15% import tax and change it to a decimal: 15/100 = 0,15 R4 655,75 × 0,15 = R698,36
Finally, add the Rand value of the leather boots and the import tax to calculate the total Rand value: R4 655,75 + R698,36 = R5 345,11
Question 5
Incorrect
MENU
Suppose that South Africa has the following current account transactions:
Dashboard / My courses / ECS1601-23-S1 / Online assessments
Transaction Value (R /‘000)
Assessment 2
Nickle exports 150 000
Copper exports 320 000
Silicon exports 125 000
Lithium exports 400 000
Solar panel imports 560 000
Lithium battery imports 670 000
Suppose that the financial and capital accounts are balanced (equal to zero). Given the above, we know that:
(i) South Africa has a current account surplus of R635 million.

(ii) South Africa has a current account deficit of R235 million.
(iii) South Africa’s GDP is smaller than the GDE by R635 million.
(iv) South Africa’s GDP is larger than the GDE by R235 million.
a. (ii) is correct.
b. (ii) and (iii) are correct. 
c. (ii) and (iv) are correct.
d. (i) and (iii) are correct.
You have to calculate the current account (net exports).
CA = X – M
Therefore the current account has a deficit
Since the current account has a deficit, it is understood that the gross domestic product (GDP) will be less than gross domestic expenditure
(GDE). See Section 5.5 of the prescribed book.
Question 6
Correct
MENU
The figure below shows the demand and supply curves for US dollars (in terms of the South African Rand) in the foreign exchange market.
Use this information to answer the question below.
In the diagram above, an increase in American tourists to South African game reserves would cause the
a. supply curve to the right. 
b. demand curve to shift to the left.
c. supply curve and the demand curve to remain unchanged.
d. demand curve to shift to the right.
e. supply curve to shift to the left.
An increase of American tourists in South Africa will increase the supply of Dollars on the South African foreign exchange market, ceteris
paribus. The supply curve for dollars on the South African Foreign market will thus shift to the right while the demand for dollars will remain
constant, ceteris paribus. See pages 71 to 76. Figure 4-3 and Table 4-1 in the prescribed book.
Question 7
Correct
MENU
This question is based on the table below:

Which of the following statements about the information above are correct?
(a) The opportunity cost of producing diamonds and rice is the same in both Botswana and India.
(b) India has a comparative advantage in the production of rice.
(c) Botswana has a comparative advantage in the production of diamonds.
(d) India is more efficient in the production of both diamonds and rice.
a. a and c
b. b and d
c. a, b, c and d
d. only b and c 
The opportunity cost of producing both diamonds and rice is not the same in Botswana and India. They do not have an equal advantage and
do not have the same endowment of resources. This is because the factors of production are not equally distributed across the world. The
table below gives a breakdown of the opportunity cost of producing diamonds and rice in both countries:
Therefore, Botswana has a comparative advantage in the production of diamonds because it gives up 0.2 tonnes of rice to produce 1 tonne
of diamonds. This means that Botswana is more efficient in the production of diamonds than in rice. To produce 1 tonne of rice requires
Botswana to sacrifice 5 tonnes of diamonds. India has a comparative advantage in the production of rice because it gives up only 0.2 tonnes
of diamonds to produce 1 tonne of rice. This means that India is more efficient in the production of rice than in diamonds. To produce 1
tonne of diamonds requires India to sacrifice 5 tonnes of rice.
Question 8
Correct
MENU
One of the main objectives of the South African Reserve Bank (SARB) is to maintain price stability. Which statement/s is/are correct about
Dashboard
the / My
instrument thatcourses / uses
the SARB ECS1601-23-S1 / Online
to achieve this goal? assessments / Assessment 2
a) The SARB will try to maintain the inflation rate between 3 to 6% within the target range.
b) The SARB will ensure that a negative inflation rate is not attained, as this will decrease prices, which is not desirable because it will
discourage production.
c) The SARB will use inflation rate targeting to ensure that the price of the particular product or service is stable.
a and b 
b and c
c
b
a, b and c
Price stability refers to the general stability for all products or services, not an increase in a particular product or service. Some products may
become more expensive, for example, when demand for the product increase due to it being in fashion. This does not form part of inflation
but is due to market forces.
Question 9
Correct
The annual inflation rate in South Africa accelerated from 5.9% in April 2022 to 7.5 in May 2022. This is the highest since January 2017. Based
on this information, which is the suitable policy measure that the South African Reserve Bank (SARB) can implement in this scenario?
a. Decrease the prime rate.

b. Increase the repo rate. 
c. Increase taxes
d. Increase aggregate spending.
One of the SARB’s objectives is to maintain the inflation rate between 3 and 6%; therefore, when the inflation rate increases, the most
appropriate policy measure that the SARB can implement to eliminate inflation is to increase the repo rate – which in turn will increase the
prime rate that commercial banks use to borrow money to clients. This will result in a decrease in consumer spending and dampen the
aggregate demand in the economy. Increasing taxes is an example of contractionary fiscal policy. See Section 5 in the prescribed book.
Question 10
Incorrect
MENU
Use the following table to calculate the GDP in Economy A:

Dashboard / My courses
Item / ECS1601-23-S1 / Online assessments
Value (R /‘000)
Assessment 2
Intermediate inputs 32 000
Labour cost 36 000
Profits 20 000
Which of the following is correct?
i. The total value added is equal to R 88 000.

ii. The GDP in the economy will be R 68 000.
iii. The correct way to calculate the GDP is through the income approach, which is R 56 000.
a. (i) and (ii) are correct. 

b. (ii) and (iii) are correct.
c. (i) is correct.
See Section 5.1 of the prescribed book.
Question 11
Correct
Dissaving refers to when
a. consumption is financed by previous savings. 

b. no saving takes place.
c. consumption is larger than saving.
d. saving is larger than consumption.
e. the monetary value to the decision-maker of the choice made.
Autonomous saving will always be negative. This is because when the income level is zero, consumption will be financed by using past
savings or credit which is called dissaving. At an income level of zero, dissaving will thus equal to the level of autonomous consumption. The
slope of the saving function is equal to the marginal propensity to save. See pages 118 and 119 as well as Figure 6.3 prescribed book.
Question 12
Correct
MENU
Suppose that Households A in South Africa earn a total income of R15 000 and total consumption is R13 700. In addition, the households
Dashboard
have R1 000 /in My courses
transfers / the
from ECS1601-23-S1
government. /Which
Online
of assessments
the following /is correct?
Assessment 2
a. If total income rises by R1 000, their induced consumption will rise by R913,33. 
b. If total income rises by R1 000, their autonomous consumption will rise by R846,66.
c. The marginal propensity to consume is 0.846.
d. The autonomous consumption is R1 000 and it increases when total income rises.
To answer this question, you have to compute the consumption function given the information. The function becomes:
Question 13
Correct
MENU

Based on the diagram above, which of the following statements is correct?
a. A represents aggregate income and Y aggregate spending.

b. The 45⁰ line running through the origin represents all possible equilibrium points. 
c. Where A > Y there is excess supply.
d. Where A < Y there is excess demand.
The 45⁰ line running through the origin represents all possible equilibrium points. Each point on this line indicates that A = Y, as on the
diagram below: (A diagram is missing).The symbol A represents aggregate spending while the symbol Y represents aggregate income (and
production).
Where A > Y there is an excess demand for goods and services in the economy. This means that the available supply of goods and services
is not enough to meet people’s demand. In this case, the levels of production and income will tend to increase. Where A < Y there is an
excess supply of goods and services in the economy. This means that not all the available supply of goods and services will be consumed. In
this case, the levels of production and income will tend to decrease.
Question 14
Correct
MENU
Consider the following graph to answer the question:

The gap labelled W represents an upward shift of A curve due to a change in…
a. autonomous consumption.
b. investment spending. 
c. induced consumption.
d. autonomous spending.
The gap represents is investment spending, which is also autonomous by nature in a simple Keynesian model.
Question 15
Correct
MENU
In the simple Keynesian model without a government or foreign trade, assuming the MPC is 0,50, a R20 billion increase in investment
Dashboard
spending will/ …My courses / ECS1601-23-S1 / Online assessments / Assessment 2
a. leave the equilibrium GDP unchanged.

b. increase the equilibrium GDP by R50 billion.
c. increase the equilibrium GDP by R400 billion.
d. increase the equilibrium GDP by R40 billion. 
e. increase the equilibrium GDP by R20 billion.
𝛼=1/1−𝑐
∴ 𝛼=11−0.5
∴𝛼=2
Increase in GDP
=40
The new equilibrium will increase by R40 billion P: ∝ (Δ𝐼)
=2(𝑅20 𝑏𝑖𝑙𝑙𝑖𝑜𝑛)
Question 16
Correct
The following question is based on the following equation, which refers to a closed economy with no government: C = 100 + 0,75Y
Which of the following statements is/are correct?
a) When income is zero, private savings are 100.
b) The slope of the savings function is 0,75.
c) The savings function will be given by S = 100 + 0,25Y.
a. None of the statements is correct. 

b. a and b
c. b and c
d. a and c
e. All the statements are correct.
Refer to Box 17-4.In this equation autonomous consumption is equal to 100.This means that autonomous saving is equal to -100.
The marginal propensity to save is equal to 1-c. c is equal to 0,75, thus s=1-0,75=0,25.
The slope of the saving function is therefore 0,25. The saving function is therefore S=-100+0,25Y.
Question 17
Correct
MENU
If the marginal propensity to consume is 0,6 which of the following statements is correct?
a. It means that 60% of the increase in income is saved, while the remaining 40% will be used for consumption.
b. It means that 60% of total income earned is saved.
c. It means that a change in income does not affect the marginal propensity to consume.
d. It means that 60% of an increase in income will be used for consumption, while the remaining 40% will be saved. 
If 60% of the increase in income is saved, it would mean that the marginal propensity to save (s = 1 – c) is 0,6
Q6
So, the marginal propensity to consume would be 0,4. This means that 40% of the increase in income would be used for consumption. The
marginal propensity to consume only refers to the percentage of a change in income that is used for consumption. It does not relate to a
portion of total income; it only relates to a portion of the increase in income.
A change in income does affect the marginal propensity to consume. When there is an increase in income, consumers can afford to buy
more goods and services. When there is a decrease in income, this reduces consumers’ buying power as they cannot afford to purchase
goods and services as they did before the decrease in income.
The marginal propensity to consume (c) indicates the proportion of an increase in income that will be used for consumption. Therefore,
when the marginal propensity to consume is 0,6 it means that 60% of the increase in income will be used for consumption. The remaining
40% of the increase in income will be saved. Therefore, the marginal propensity to save (s = 1 – c) will be 0,4:s = 1 – 0,6 = 0,4.
Question 18
Correct
Which one of the following factors will increase the size of the multiplier?
a. an increase in government spending

b. an increase in the marginal propensity to consume 
c. an increase in the marginal propensity to save
d. increase in autonomous consumption
Government spending and Autonomous Consumption in the Keynesian model are autonomous expenditures, consequently an increase in
government spending or autonomous consumption will only increase aggregate spending. An increase in the marginal propensity to save
will decrease the marginal propensity to consume as MPS = 1-MPC, the lower MPC will reduce the size of the multiplier.
Question 19
Correct
MENU
The equation C = 45 + 0.75Y, where C is consumption and Y is income, tells us that…

a. households will consume forty five cents of whatever level of disposable income they receive.
b. households will consume R45 if their disposable income is zero. 
c. there is an unknown relationship between disposable income and consumption.
d. households will save R45 if their disposable income is zero.
e. induced consumption is 75+45=120.
R45 is the autonomous consumption, which is independent of the level of income. Households will consume R45 if their disposable income
is zero.
Question 20
Correct
The consumption function is based on the premise that as income increases, consumption expenditure will …
a. increase by the identical amount.

b. increase by a lesser amount. 
c. increase by an indeterminable amount.
d. remain zero since the consumption function does not shift.
e. remain negative unless taxes also change.
One of the characteristics of the consumption function is that when income increases, consumption increases but the increase in
consumption is less than the increase in income. This happens because households save some of their income.
◄ Assessment 7: Alternative assessment 1
Jump to...
Assessment 3 ►
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Started on Thursday, 16 March 2023, 11:45 AM

State Finished
Completed on Thursday, 16 March 2023, 12:45 PM
Marks 15.00/18.00
Question 1
Correct
Which one of the following statements is true about causality and correlation?
a. Causality between two variables always implies correlation.

b. An example of correlation is when an increase in the value of imports causes a rise in economic growth.
c. Causation between two variables proves correlation.
d. Correlation between variables occurs when two variables have a relationship 
Correlation does not imply causation. Correlation between variables occurs when two variables have a relationship.
Question 2
Correct
With reference to the circular flow of goods and services, complete the following sentence: Suppose that Reneilwe runs a construction
company, where she uses capital and labour. After completing projects, the payment for services will remunerate _______to ________in the
________ market.
a. wages; entrepreneurship; factor

b. interest; capital; factor 
c. wages; capital; factor
d. wages; labour; goods
Factors of production are compensated for their respective factor incomes as per the circular flow of income. See Section 1.4 of the
prescribed book.
Question 3
Correct
MENU
Consider the circular flow of income. Which of the following is correct?

a. The government sector can purchase factors of production in the factor market. 
b. Households purchase goods and services in the factor market.
c. The government sector can only purchase goods and services in the factor market.
d. The role of the foreign sector is to only purchase goods and services in the goods market.
Question 4
Correct
The National Treasury has announced an increase in the capital gains tax rate to 45% to increase the funding of social grants to the poor in
South Africa. Which objective of macroeconomic policy is the government trying to achieve through this decision?
a. balance of payments stability

b. economic growth
c. full employment
d. equitable income distribution 
Capital gains tax is levied on profits from real estate (land and buildings) and financial assets (shares and bonds). In other words, it is a tax
levied on the profits from selling real estate, on dividends earned by shareholders in companies and on interest earned by bondholders. This
tax is targeted at high-income earners in a society with the ability to pay. Revenues generated from capital gains tax are allocated to social
grants for the poor to improve their welfare. This is meant to reduce the extent of inequality between the rich and the poor. Therefore, the
South African government is trying to achieve the macroeconomic objective of equitable income distribution. See Section 1.7 on page 13 of
the prescribed book for a detailed explanation of the five objectives of macroeconomic policy.
Information
Have a look at the following information and answer the question below.
MENU
Suppose that a firm is spending R49 million per month on salaries, which are allocated as follows:
Monthly Salaries
Dashboard / My courses / ECS1601-23-S1 / -Online
2020 assessments
Monthly /Salaries - 20211
Assessment
CEO R 21 million R 22 million
Executives R 15 million R 16 million
Three thousand employees R 13 million R 14 million
Assume that the CEO spend 0.5%, while executives spend 2% and employees 65% of their monthly salaries on goods and services in both
years.
(Round off your answers to two decimals). Example on how you should type in your answers:
For percentage answer: 1,55%

For amount answer: 100 / 1 000 / 100 000 / 106 300,56
Question 5
Correct
Suppose the 2021 monthly salary of the Three thousand employees was increased by 8%. Calculate the new monthly salary of the
employees. Type in your answer
15 120 000

Question 6
Correct
MENU
Which of the following statements are correct about trade of goods and services?
a. The use of money eliminates the need for a double coincidence of wants associated with a barter economy.
b. An economy in which goods are traded with money is called a barter economy.
c. Money consists of notes only.
a. a and b.
b. All the statements are correct.
c. a. 
d. a and c.
the use of money eliminates the need for a double coincidence of wants under barter economy where goods were exchanged with other
goods
Question 7
Correct
Suppose that South Africa demands L2 units of currency, which of the following will result in an increase in the demand for money?
a. The interest returns on nominal bonds falls. 

b. There is a decrease in the number of grant recipients in South Africa.
c. There is an increase in income taxes in South Africa.
d. There is an increase in the interest rate by the South African Reserve Bank to fight inflation.
Changes in the demand for money is derived from the transactionary and speculative factors. Changes in disposable income and interest
rates will affect the demand for money. See Section 2.5 of the prescribed book.
Question 8
Incorrect
MENU
Which of the following statements is /are incorrect in explaining the difference between M1, M2, and M3
Dashboard
a) / of
M3 consists MyM2
courses
plus a /long-term
ECS1601-23-S1
deposit /andOnline assessments
is more / Assessment
of a comprehensive 1 that includes funds held as a unit of account.
measure
b) M1 consists of cash in circulation outside the monetary sector plus demand deposit.
c) M2 consists of M1 plus short-term deposit and medium-term deposit.
d) M2 consists of M1 plus quasi money.
a. b
b. a and d 
c. b and d
d. a
e. a, c and d
M3 consists of M2 plus long-term deposit and is more of a comprehensive measure that includes funds held as a store of value.
Refer to sections 2.1 and 2.3 in the prescribed textbook.
Question 9
Correct
Suppose the SARB increases repo rate in an attempt to curb inflation. As a result the….
a. price of interest-bearing securities or bonds in South Africa will increase.

b. creation of money will slow down as demand for loans declines. 
c. cost of borrowing charged by banks will decrease.
d. quantity of money supply will increase by percentage increase of repo rate.
Refer to section 14.8 (Open-market policy). When the SARB wishes to curb rising inflation, it will increase the interest rate. This will
discourage the creation of bank deposits as people and firms will reduce or postpone borrowing from the banks, since the cost of borrowing
rises as the interest rate increases. The quantity demanded for money decreases as the cost of borrowing (interest rate) rises.
Question 10
Incorrect
MENU
The money in circulation in South Africa is depicted below:

a. The amount of short- and medium-term deposits decreased by 57.85%.
b. The amount of long-term deposits rose by 4.65%.
c.
The amount of coins and notes in circulation decreased in 2021.
d. The amount of long-term deposits increased by 22.81%. 
Remember the definitions:

M1 = Coins in circulation
M2 = M1 + Short and medium-term deposits

M3 = M2 + Long-term deposits
From the above we see that:
Short and Medium Deposits = M2 – M1 &
Long Term Deposits = M3 – M2

Question 11
Correct
MENU
Thato has logged into her Absa Online Banking profile to view the monthly rental income she has been earning from her late father’s house
Dashboard
for / My
the past 12 courses
months. / ECS1601-23-S1
In this / rental
case, the monthly Onlineincome
assessments / Assessment
is an example 1
of a __________ variable.
a. liquidity
b. credit
c. stock
d. flow 
A flow variable is measured over a period of time (for example 12 months or five years). While a stock variable is measured at a particular
moment in time (for example 31 December 2023).
Question 12
Incorrect
Stats SA has reported that South Africa’s gross domestic product (GDP) decreased as a result of an ESKOM load-shedding which led to a
decline in economic activities across several industries. This negatively affected the remuneration of the factors of production and income of
the businesses. In the money market, the…….
(i) demand for active balances (L1) will decrease and will be reflected in a leftward shift of the L1 curve.
(ii) demand for passive balances will increase.
(iii) total demand for money (L) will increase and will be reflected in a rightward shift of the L curve.
a. (ii) and (iii) are correct

b. (i) and (ii) are correct 
c. Only (i) is correct
d. Only (ii) is correct
e. (i), (ii) and (iii) are correct
Refer to section 2.5 in the study guide, and sections 2.5 and 2.6 in the prescribed textbook
Question 13
Correct
MENU
Suppose the number of higher-rate taxpayers in Botswana increased by one million, mainly driven by an increase in employment income. In
Dashboard
the / My courses
money market, / ECS1601-23-S1
this would be illustrated by /which
Online assessments / Assessment 1
diagram?
a. [3]
b. [2]
c. [1] 
d. [4]
Refer to section 2.5 in the study guide, and sections 2.5 and 2.6 in the prescribed textbook.
Question 14
Correct
MENU
The equity criteria of taxation are best explained as:

(i) When my salary increases, my tax contribution must decrease.
(ii) Households that earn the most income should pay the most taxes.
(iii) Residents in a poor neighbourhood pay less tax than residents in a rich neighbourhood because they receive less services.
a. Only (ii) is correct

b. (i) and (ii) are correct
c. Only (iii) is correct
d. (ii) and (iii) are correct 
e. Only (i) is correct
Question 15
Correct

(a) Privatisation of Denel is the transfer of ownership from a private enterprise to the government.
(b) An example of nationalisation is when the South African Reserve Bank transfers ownership to the government.
(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.
b and c 
b
a, b and c
a and b
Nationalisation is when SARB transfers ownership to the government. The topic of nationalisation/privatisation has been a heated debate for
years to date, thus arguments in favour of privatisation are that the privatised firm may attract FDI and charge higher prices for both
domestic and international customers.
Question 16
Correct
MENU
When the government uses its overdraft facilities at the central bank, it ___________ the quantity of money in the economy. This is called
Dashboard / My financing.
___________________ courses / ECS1601-23-S1 / Online assessments / Assessment 1
a. increases; deflationary
b. decreases; inflationary
c. increases; direct
d. increases; inflationary 
e. decreases; deflationary
Taxation is not sufficient to finance all government spending. A budget deficit will arise, which will then be financed by borrowing. The
government can borrow in the domestic and international capital markets, or it can borrow from the central bank by using, as it were, its
overdraft facilities. This type of financing increases the quantity of money in the economy, and it is potentially inflationary. It is avoided as far
as possible. See page 56 of the prescribed book.
Question 17
Correct
Which one of the following statements is correct about the South African government’s action to stimulate economic activities since the
Covid-19 pandemic?
a. Decrease both the repo rate and taxation for businesses only, and provide Covid-19 relief grants.
b. Decrease taxation and provide Covid-19 relief grants for both individuals and businesses. 
c. Increase both taxation and the repo rate.
d. Decrease the repo rate charge for businesses only.
The correct action that may work for the SA government to stimulate economic activities since the Covid pandemic is to decrease taxation
and provide Covid relief grants for both businesses and individuals.
Question 18
Correct
MENU
The tax and income of two South African households, A and B, are as follows:
Household A Household B
Income (R) 5 000 1 500
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. (i), (ii) and (iii) are correct.

b. (i) and (ii) are correct.
c. (iii) is correct.
d. (i) and (iii) is correct. 
e. (ii) and (iii) are correct.
To answer this question, the student needs to compare the percentage of the income that is taxes in the respective households.
Percentage of Tax = (Taxable Income/Total Income)*100
As a result, the shares of PAYE, VAT & Taxes on fuel are:
% of PAYE = (Total PAYE Paid/Total Income)*100

% of VAT = (Total VAT Paid/Total Income)*100
% of Taxes on Fuel = (Total Fuel Taxes Paid/Total Income)*100
Given the above, we can see that the PAYE is progressive tax. VAT and fuel are regressive taxes.
◄ Entry Survey (ECS1601 orientation)
Jump to...
Assessment 7: Alternative assessment 1 ►

MENU 
Dashboard / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6

State Finished
Marks 17.00/20.00
Question 1
Incorrect
Using the table below, what is the M2 for the year 2013?
a. R636 337 million

b. R833 908 million
c. R1 132 039 million
d. R2 049 694 million
e. R2 512 251 million 
M2 is equal to M1 plus other demand deposits plus all other short-term and medium-term deposits of the domestic private sector with
monetary institutions. Thus: R87 014 million + R549 323 million + R495 702 million + R917 655 million = R2 049 694 million.
The correct answer is: R2 049 694 million

Question 2
Correct
MENU
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.
Nationalisation is the transfer of ownership or management of an industry or entity to the government with or without compensation.
The correct answer is: the acquisition of private companies by the public sector.
Question 3
Correct
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.
The economy consists of three major flows, namely total spending, total income, and total production.
The correct answer is: Total spending, total income, and total production.
Question 4
Incorrect
MENU

a. The difference between government spending and borrowing is called the budget deficit.
b. If government finances part of its spending from borrowing from the central bank, this is called inflationary financing.
c. Expansionary fiscal policy implies that taxes must increase, and government spending must be limited.
a. All statements are correct.
b. 
a and b
c. b and c
d. a
e. b
Your answer is incorrect.
The budget deficit refers to the difference between government spending and current revenue of the government, see section 3.2. See
section 3.5 on fiscal policy.

b
Question 5
Correct
a. net welfare gain
b. net welfare loss 
e. economic growth.

net welfare loss
Question 6
Correct
MENU


c. Increase taxes
The correct answer is: Increase the repo rate.

Question 7
Correct
MENU
Use the following figure to answer the question: When government spending is included in the economy, aggregate spending is affected.
An increase in government spending, ceteris paribus will______ aggregate spending, which is shown by ______ of the aggregate spending
curve.
a. decrease; a downward shift from A0 to A1

b. increase; a downward swivel from A1 to A2
c. decrease; downward swivel from A1 to A2
d. increase; an upward shift from A0 to A1 
When the economy is closed but with government spending included, aggregate spending will be affected. The introduction of government
spending will increase aggregate spending because money is injected into the circular flow of income and spending. As a result, the
aggregate spending curve will shift to the right. Firstly, because it is a decrease in government spending that will cause a downward shift in
the aggregate spending curve. Secondly, a swivel of the aggregate spending curve is caused by a change in taxes and not a change in
government spending.
The correct answer is: increase; an upward shift from A0 to A1

Question 8
Correct
MENU
Which of the following statements is true about introducing the government sector into the economy?
a. The size of the multiplier increases.

b. Government spending is determined by its relationship with total income.
c. Including government spending represents a leakage in the economy.
d. An increase in government spending raises aggregate spending. 
The government plays an important role in the economy. The government sector provides public goods such as law and order, education
and health, among others. When government undertakes these projects, money is injected into the economy. On the other hand, to finance
this spending, government must borrow and charge taxes. Taxes represent a leakage, as money is withdrawn from the economy. When
government spending is increased, this is an injection of money into the economy. As a result, aggregate spending will increase. Firstly,
government spending does not affect the multiplier. Secondly, government spending is an exogenous variable and therefore not
determined by total income (there is no relationship between government spending and total income). Thirdly, government spending
represents an injection.
The correct answer is: An increase in government spending raises aggregate spending.
Information
CASE STUDY 1
MENU
Transition.

Question 9
Correct
MENU
236000000
 rand.
Question 10
Correct
Germany and other countries’ combined contribution of $8.5 billion to support South Africa would contribute to _____.
a. an increase in spending financed by the government of South Africa

b. massive spending by Saretec on Eskom
c. an increase in energy expenditure by the governments of Germany and other countries 
d. a decrease in spending by Eskom on energy transition
The correct answer is: an increase in energy expenditure by the governments of Germany and other countries
Question 11
Correct
MENU
Which one of the following statements is correct?

a. Wind turbines, purchased from local producers, will decrease domestic firm income.
b. Storage batteries and solar panels, which are purchased from Germany, will result in a withdrawal in the German economy.
c. Storage batteries and solar panels, which are purchased from Germany, will result in an injection in the South African economy.
d. Households in South Africa benefit more if the components of the wind turbines are produced locally. 
The role of the foreign sector in the circular model of income and spending is to provide goods and services in the goods market, as well as
factors of production in the factor market. The imports in the model are withdrawals into the domestic economy, whilst exports are
injections. The effect on the circular flow model speaks to the flow of income with respect to the factor and goods market. Foreign products
(turbine equipment) in the domestic goods markets lead to a leakage of income to foreign firms and the converse is true for domestically
produced goods sold in foreign goods markets.
The correct answer is: Households in South Africa benefit more if the components of the wind turbines are produced locally.
Question 12
Correct
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)

Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct
The internet transfer of the pledged $8.5 billion to the South African government’s local bank account will add to a( n) _______ in the SA
foreign exchange market.
a. increase in the supply of US dollars 

b. decrease in the supply of US dollars
c. increase in the demand for US dollars
d. decrease in the demand for US dollars

The correct answer is: increase in the supply of US dollars
Question 15
Correct
MENU
Germany’s financial support of Saretec, to finance the building of a wind turbine tower, rooftop solar panels and storage batteries,
Dashboarda(/ n)Courses
constitutes _____. / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
a. withdrawal from the circular flow of income and spending in the economy of South Africa
b. addition into the circular flow of the income and spending in the economy of Germany
c. direct portfolio investment in South Africa’s energy transition by the German government
d. injection to the circular flow of income and spending in the economy of South Africa. 
The correct answer is: injection to the circular flow of income and spending in the economy of South Africa.
Question 16
Correct
Poor infrastructure creates a bottleneck for economic growth; therefore, the wind power project will eradicate the aggregate supply
challenge by _____.
a. increasing the capacity of electricity available and will increase current labour productivity 
b. decreasing the interest rate in the economy by increasing money demand
c. increasing the amount of government spending in the economy
d. increasing the amount of imports coming in as consistent with import substitution policy
A critical constraint to South African economic development is electricity efficiency, which refers to the lack of affordable and available
production inputs. Availing additional capacity increases productivity and reduces the cost of production for firms. Changes in the interest
rate affect the quantity demanded for money, not money demand. The monetary transmission mechanism postulates that changes in the
interest rate will impact private domestic investment and consumption, which are factors of aggregate demand. Similarly, changes in imports
do not directly affect government spending. Import substitution involves the creation of import equivalents of consumer goods and capital,
which is a policy intervention that can improve aggregate supply. However, its objective is to reduce reliance on imports.
The correct answer is: increasing the capacity of electricity available and will increase current labour productivity
Information
CASE STUDY 2
MENU
Climate Change
Dashboard Implications:
/ Courses / UNISAEconomic
/ 2023Impacts and Constraints
/ Semester in Western
1 / ECS1601-23-S1 Cape, coastal
/ Online areas./ Assessment 6
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct
Use the diagram below to answer the following question:
It is very likely that climate impacts will have a devastating impact on the agricultural sector in the Western Cape, including viticulture, and
the tourism and hospitality sectors, leading to the collapse of wine-farming, coastal zone attractions, and loss of the Cape Floral Kingdom.
Given such a scenario, which of the following business circle points represents the economic situation in the Western Cape?
a. Point a
b. Point b 
c. Points a and c
d. Point c
The business cycle consists of four phases: a downswing or contraction, a trough, and a boom or peak phase. Climate change will have a
devastating impact on the economy, resulting in a contraction or a downswing of the economy. See section 12.2 of the prescribed book.
The correct answer is: Point b
Question 18
Correct
MENU
What form of government intervention is required in the Western Cape to limit the negative economic impact and constraints created by
Dashboard
climate / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
change?
a. Contractionary fiscal policy.

b. A decrease in government expenditure on environmental-related goods and services.
c. An increase in government spending on environmental-related goods and services. 
d. A decrease in environmental taxes.
The provincial government needs to increase spending on environmental-related goods and services to mitigate the negative impact of
climate change on the economy and society in general. Refer to the case study for information and background and chapter 3 of the
The correct answer is: An increase in government spending on environmental-related goods and services.
Question 19
Correct
Much of the Western Cape economy is dependent on agriculture, including wine farming and tourism. Climate change will negatively affect
workers in the farming and tourism sectors, resulting in a 20% unemployment rate in the province. Based on the above statement, a 20%
unemployment rate is ___
a. a flow variable.
b. both a flow and stock variable.
c. measured over time.
d. a stock variable. 
A stock variable indicates the value at a specific moment in time (meaning it is measured at a particular time), while a flow variable indicates
the change in the variable between two points in time (meaning it is measured over a period of time). See Box 2-6 of the prescribed book.
The correct answer is: a stock variable.
Question 20
Correct
MENU
curve.


◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
Cost-push inflation can be caused by …
a. an increase in profit margins, a decrease in productivity and the impact of natural disasters. 
b. a decrease in wages and salaries.
c. an increase in investment spending and government spending.
d. a decrease in the cost of imported capital and intermediate goods.
Question 2
Correct
A depreciation of the rand may have inflationary consequences in South Africa because it…
a. Increases the costs of exports.

b. Discourages savings.
c. Increases the costs of imported goods. 
d. Discourages exports.

Question 3
Correct
MENU
Demand-pull inflation can be combated by …

a. raising interest rates. 

b. decreasing personal income tax.
c. lowering interest rates.
d. increasing government spending.
Question 4
Correct
a. Cost-push inflation is described as “too much money chasing too few goods”.
b. Cost-push inflation is triggered by an increase in consumption spending.
c. Demand-pull inflation creates a situation known as stagflation.
d. An earthquake can trigger cost-push inflation. 
Question 5
Correct
Which one of the following statements regarding the producer price index (PPI) is true?
a. It measures the cost of living.

b. It measures the cost of production. 
c. It has the same weights as CPI.
d. Its growth rate is always greater than that of CPI.

Question 6
Correct
MENU
In the case of demand-pull inflation, an increase in the general price level is accompanied by … in total production. In the case of cost-push
Dashboard
inflation, / Courses
an increase / UNISA
in the general /price
2023 / is
level Semester 1 / ECS1601-23-S1
accompanied / Online assessments / Assessment 4
by…in total production.
a. a decrease; an increase
b. an increase; a decrease 
c. an increase; an increase
d. a decrease; a decrease
Question 7
Correct
Increased unemployment benefits and less incentive to work can be illustrated by
a. a rightward shift of the aggregate demand curve.

b. a rightward shift of the aggregate supply curve.
c. a leftward shift of the aggregate demand curve.
d. a leftward shift of the aggregate supply curve. 
Aggregate supply can be influenced by incentives that people face. For instance, high taxes may discourage people from working, thereby
lowering the quantity of goods and services produced and reducing aggregate supply. Similarly, an increase in unemployment benefits and
less incentive to work will reduce aggregate supply. Graphically, this is reflected by a leftward shift in the aggregate supply curve. See table
9-2 on page 181.
Question 8
Correct
MENU
If the number of people classified as unemployed is 20 000 and the number of people classified as employed is 230 000, what is the
Dashboard / Courses
unemployment rate? / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
a. 9,2%
b. 8% 
c. 11,5%
d. 8,7%
The unemployment rate is expressed as the percentage of the total number of unemployed persons of the total number of persons that are
capable and willing to work. The total number of persons that are capable and willing to work includes the persons who are unemployed
and those that are working, thus 20 000 + 230 000 = 250 000.
The unemployment rate is therefore: (total number of unemployed persons)
(total labour force)
=(20 000) =0,08 or 8%

(250 000)
Question 9
Correct
Which of the following statements regarding the types of unemployment is correct?
a. Frictional unemployment is caused mainly by political frictional which gives rises to lower economic growth.
b. Seasonal unemployment is usually associated with economic recessions.
c. Structural unemployment can be attributed mainly to a temporarily decline in the aggregate demand for goods and services.
d. An increase in the aggregate demand for goods and services can reduce cyclical unemployment. 
Refer to section 21.1 (types of unemployment).

Question 10
Correct
MENU
In 2008, South Africa experienced higher job losses in the mining industry, resulting from insufficient demand for mining commodities. This
isDashboard
an example/ of…
Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
a. structural unemployment
b. cyclical unemployment 
c. seasonal unemployment
d. frictional unemployment
See the explanations of the potential causes of cyclical unemployment on page 402 in the prescribed textbook.
Question 11
Correct
In the business cycle, the opposite of a peak is a/an …
a. upswing
b. recession
c. downswing
d. trough 
A peak is the highest point of the business cycle while a trough is the lowest point of the business cycle. A downswing refers to the period in
which the economy is experiencing a decline while an upswing describes the period in which economic activity is increasing.
Question 12
Correct
Which one of the following factors does not account for increased unemployment in South Africa?
a. a rapid increase in population growth.

b. an increase in immigration.
c. an increase in the cost of employing labour.
d. an increase in labour intensity of production. 
An increase in the amount of labour used in production results in an increase in the demand for labour and therefore a decrease in
unemployment
Question 13
Correct
MENU
Reasons on the supply-side of the labour market for increased unemployment in South Africa could include?
Dashboard
(a) / in
an increase Courses / UNISA
population / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
growth.
(b) an increase in the capital intensity of production.
(c) an increase in immigration.
(d) an increase in the cost of employing labour.
a. a), (b) and (c)

b. c) and (d)
c. a) and (d)
d. a) and (c) 
The increase in population growth and immigration can be the cause of unemployment on the supply side of the labour market. See section
11.1 of the textbook.
Question 14
Incorrect

2019 2020 2019 2020
1,65 trillion 1,63 trillion 51,7 Million 51,8 million
Answer:
0.18

Question 15
Correct
MENU
a. the trough phase.

b. the recovery phase.
c. the peak phase. 
Question 16
Correct
Answer:
5.71%

Question 17
Correct
MENU
If it is argued that the solution to unemployment is more labour-intensive methods of production, one can conclude that the kind of
Dashboard / Courses
unemployment / UNISA
that is being / 2023
dealt with is… / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
a. seasonal unemployment.
b. frictional unemployment.
c. structural unemployment. 
d. cyclical unemployment.
Cyclical (demand-deficiency) unemployment occurs when a slump or recession in the economy (as a result of a temporary lack of demand)
gives rise to unemployment.Seasonal unemployment arises because certain occupations require workers only for part of each year. It is in
some cases related to the weather or the calendar, and very specific steps have to be taken to accommodate workers during the periods
when they do not have employment. Frictional unemployment (sometimes also called search unemployment) arises because it takes time to
find a job or to move from one job to another. It can be regarded as part and parcel of the way in which a market economy operates.
Structural unemployment occurs when there is a mismatch between workers’ qualifications and job requirements, or when jobs disappear
because of structural changes in the economy. Structural unemployment is usually confined to certain industries, sectors or categories of
workers.
Question 18
Incorrect
Amount of Economic Activity (Nominal): Gross GDP per capita

Domestic Production
2019 2020 2019 2020
14,3 trillion 14,7 trillion 70 Million 73 Million
Answer:
13.00

Question 19
Correct
MENU
Answer:
25 000 000

Question 20
Correct
Answer: 31 000 000 
◄ Assessment 3
Jump to...
Assessment 5 ►
MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
Which of the following statements is correct about government spending in the Keynesian model?
a. The income level does not affect government spending. 
b. The income level is affected by government spending.
c. The size of the multiplier decreases as government spending decreases.
d. It affects the size of the multiplier.

Government spending is autonomous from (Y) income level since government spending is typically a political decision. The size of the
multiplier does not affect government spending.

Question 2
Correct
MENU
Use a Keynesian model to calculate the answer.

Full employment output = R80 million
Investment = R20 million
Autonomous consumption = R15 million
The marginal propensity to consume = 0,6.
The value of the multiplier is
Answer:
2.5

Question 3
Correct
Given the following information:
Autonomous consumption spending R250 billion
Marginal propensity to save ¼ (0.25)
Investment spending R350 billion
Government spending R300 billion
Answer:
900 000 000 000

Question 4
Correct
MENU

Full employment output = 80 million
Investment = 20 million
Autonomous consumption = 15 million
The marginal propensity to consume = 0,6
Given the above information, if the marginal propensity to save increases by 0,10, what will the equilibrium level of income be?
Answer:
70 000 000

Question 5
Correct
Which of the following statements is/are correct about the fiscal policy measure to increase employment?
a) Autonomous spending will increase, and because of the increase in demand in the economy firms will incur an unexpected decline in
inventories, thus forcing them to increase production.
b) The increase in government spending does not have to match the required increase in income to decrease unemployment.
c) The multiplier effect will bring about the required increase in income level to increase employment.
d) Production will be encouraged and the level of income will increase as well as employment.
all the statements are correct 

a and b
b, c and d
a, b and c
The expansionary fiscal policy will be implemented to increase economic activity in two ways, either an increase in government spending and
a decrease in taxation, for an increase in government spending to increase employment this will not have to be equal to the required income
level, due to the multiplier effect is in operation, the increase in government spending that will bring about the required increase in income
will be smaller.
Question 6
Correct
MENU
Suppose government expenditure in South Africa is R10 billion while autonomous consumption and investment spending are R25 billion
Dashboard
and / Courses
R50 billion / UNISA
respectively. / 2023exports
Autonomous / Semester 1 /billion
are R100 ECS1601-23-S1 / Online
and autonomous assessments
imports / Assessment
are R35 billion. Also, c = 30,85; t = 0,275 and m =
0,125. What is the equilibrium level of income in the economy? (Hint: at each step of your calculations, round off to 2 decimal places)
a. R365 billion
b. R150 billion
c. R167.5 billion
d. R295.5 billion 
Question 7
Correct
MENU

Select one:

Question 8
Correct
MENU
Y = 10 500
S = -250 + 0.65Y
I = 500
G = 1 100
2 000 = 200 + mY


c. (ii) and (iii) are correct. 
d. (ii) and (iv) are correct.
Question 9
Correct
Which of the following is correct regarding disposable income and total income?
Select one:
a. Total income is equal to a fraction (1-t) of disposable income Yd.
b. Disposable income is equal to total income minus taxes paid. 
c. Disposable income is denoted by (Y) and total income by (Yd).
d. Total income is the income that households have after they paid taxes.
Question 10
Correct
MENU
Suppose South Africa does not export nor import, but there is a government sector. Therefore, South Africa’s total spending formula can be
Dashboard
written as… / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 3
Select one:
a. A=C+I+G. 
b. A=C+I+G+X+Z.
c. A=C+I.
d. A=C+I+G+X-Z.
Question 11
Incorrect
In the Keynesian model with a government and foreign sector, an increase in government spending …
Select one:
a. increases both exports and imports.
b. decreases the equilibrium level of income. 
c. increases the equilibrium level of income and decrease imports.
d. increases the equilibrium level of income.
Question 12
Correct
MENU

Based on the information in the table, which of the following statement is correct regarding the aggregate demand (AD) curve?
a.
A downward movement along the AD curve will be reflected.
b. The aggregate demand (AD) curve will shift to the right.
c. An upward movement along the AD curve will be reflected.
d. The aggregate demand (AD) curve will shift to the left. 

The decision taken by the South African Reserve Bank to increase the repo rate to 4,25% will increase the interest rate (prime rate) which
commercial banks use to borrow its clients. The increase in the interest rate led to direct decline in the investment spending then aggregate
demand decreases which lead decrease in AD that is shown by the leftward shift of the AD. Refer to page 188 of the textbook.
An upward and downward movement of the AD curve emanates from an increase and decrease in the level of prices. See section 9.1 in the
prescribed book.
Question 13
Correct
MENU

Select one:
Question 14
Correct
Which one of the following would increase per unit production cost and therefore shift the aggregate supply curve to the left?
Select one:
a. An increase in worker productivity and production advances.
b. A reduction in business taxes.
c. An increase in the price of imported resources. 
d. The deregulation of industry.
Question 15
Correct
MENU
Contractionary demand management policies tend to …

Select one:
a. increase both inflation and the level of unemployment.
b. decrease the real GDP and the price level. 
c. decrease real GDP and increase the price level.
d. increase the price level and decrease real output.
Question 16
Correct
Suppose that Y = C + I + G + X – Z. Which of the following can be illustrated by a rightward shift of the AD curve?
(a) Increased technological innovation and political stability.
(b) A boom in major economies such as China, which are South Africa’s major trading partners.
(c) Depreciation of the local currency against the world’s major currencies due to speculation.
Select one:
a. Only (a) is correct
b. Only (c) is correct
c. All (a), (b) and (c) are correct 
d. Only (a) and (b) are correct
e. Only (b) and (c) are correct
Question 17
Correct
Expansionary demand management policy measures tend to …
Select one:
a. increase the real GDP, but reduce inflation.
b. increase both inflation and the level of unemployment.
c. increase the production cost, which will decrease total production.
d. increase both the real GDP and inflation. 
Question 18
Incorrect
MENU
In the AD-AS model, the aggregate supply curve is upward sloping because…
Select one:
a. it illustrates the total real output supplied at each price level.
b. as the price level decreases, total production decreases.
c. as the price level increases, total production decreases. 
d. as the price of a good increase, quantity supplied increases.
Information
Question 19
Correct
MENU
Answer:
65 000 000

Question 20
Correct
The marginal propensity to save is…
Answer:
0.5
◄ Assessment 2
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Assessment 4 ►
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Started on Wednesday, 29 March 2023, 9:17 AM

State Finished
Completed on Wednesday, 29 March 2023, 9:20 AM
Marks 20.00/20.00
Grade 100.00 out of 100.00
Question 1
Correct
The process whereby the world’s economies have become more integrated through trade, capital markets and technology are called______
a. economic growth.
b. economic development.
c. economic integration
d.
colonisation
e. globalisation 
The world has become a global village in which individuals, businesses, and governments have to think, plan and act globally. Factors of
production have become extremely mobile, and developments in one country often have implications for other countries. See page 63 of
the prescribed book.
Question 2
Correct
MENU
South African firms purchase more US capital goods. The ____________ for dollars increases and rand ______________ against the dollar.
a. supply; depreciates
b. demand; depreciates 
c. supply; appreciates
d. demand; appreciates
e. demand; decreases
If South African purchases and thus imports more capital goods, like machinery etc., from the US, South African firms have to pay for the
imports in dollars. The demand for dollars on the South African foreign exchange market will increase, ceteris paribus, and therefore the
Rand will depreciate relative against to the dollar, ceteris paribus. Refer toSee pages 71 to 76, and Figure 4-3, and Tables 4-1 and 4-2 in the
prescribed textbook
Question 3
Correct
If two countries have differing opportunity costs of production for two goods, then
a. each country should specialise in the good for which it has a higher opportunity cost of production.
b. only the country with an absolute advantage in the production of both goods stands to gain from trade.
c. each country should purchase inputs from the other country in order to gain an absolute advantage.
d. each country should specialise in the production of the good for which it has a relative advantage. 
e.
each country should import all goods instead of producing them domestically.
Absolute advantage is not a prerequisite for international trade. Trade can also be beneficial when one country is more efficient in the
production of both goods. According to the English economist, David Ricardo, who formulated the law of comparative (or relative)
advantage, all that is required for both countries to benefit from trade is that the opportunity costs of production (or relative prices) differ
between the two countries. Each country will tend to specialize in and export those goods for which it has a comparative or relative
advantage. See pages 67 to 70 in the prescribed book.
Question 4
Correct
MENU
If the exchange rate changes from R2,34 = ¥1,00 to R2,90 = ¥1,00, the ….
a. Yuan has weakened against the Rand

b. Rand has strengthened against the Yuan
c. Rand has appreciated against the Yuan
d. Rand has depreciated against the Yuan 
The rand has depreciated against the Yuan, which means the South African trader will have to pay more rand than before the change in the
exchange rate.
Question 5
Correct
In the 2020 Budget Speech, the National Treasury announced that the import tariff will decrease from 5.37% in 2019 to 4.40% in 2020, a
0.97% decline. What is the aim of the import tariffs and what does this imply to the domestic firm’s production?
a. an import tariff is used to protect domestic firms, a 0.97% decline in import tariff will discourage domestic production and make 
imported products cheaper.
b. an import tariff is used to protect foreign firms, a 0.97% decline in import tariff will encourage foreign firms to produce more for
export to SA.
c. an import tariff is used to protect domestic firms, a 0.97% decline in imports is too small to have an impact on the domestic firm’s
production.
d. an import tariff is used to protect domestic firms from trade exploitation, a 0.97% decline in imports will make imported goods more
expensive for domestic firms.
An import tariff is used to protect domestic firms from trade exploitation, a 0.97% decline in the import tariff will discourage domestic
production and make imported products cheaper.
Question 6
Correct
MENU
The question is based on the diagram below:

Which of the following statements about the foreign exchange market is correct?
(a) When the central bank does not intervene, an excess demand of €100 billion at an exchange rate of R17/€1 will occur.
(b) The central bank can increase the supply of Euros in the market to avoid an appreciation of the Rand.
(c) Sufficient gold and foreign exchange reserves are important to achieve balance of payments stability.
(d) The movement from D1 to D2 can be the result of a European tourist withdrawing their investment from South Africa.
a. a and d 
b. b and c
c. a, b, c and d
d. a, b and c
See Section 4.3 of Chapter 4 in the prescribed book for a detailed explanation of the foreign exchange market. Also see Table 4-2 on page
76 of the prescribed book, which summarises the impact of changes in the exchange rate.
Question 7
Correct
MENU
Suppose two countries, Country A and Country B, produce maize and cheese respectively. Their respective production is depicted as:
Dashboard / Courses / UNISA Cheese
/ 2023(tonnes/year)
/ Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 2
Maize(tonnes/year)
Country A 125 80
Country B 133 100
a. Country A has a comparative advantage in maize.

b. Country B has a comparative advantage in maize.
c. Country B has a comparative advantage in cheese. 
d. Country A has an absolute advantage in cheese.
To assess in which good each country has a comparative advantage; you have to calculate the autarky prices (opportunity cost).
Country A experiences the trade-off where they can produce 125 tonnes per year of cheese or 80 tonnes of maize. Consequently, the
opportunity costs of each good can be shown as:
125 C = 80 M
C = 0.64 M, thus for maize the opportunity cost is M = 1.563 C
Country B experiences the trade-off where they can produce 133 tonnes per year of cheese or 100 tonnes of maize. Consequently, the
133 C = 100 M

Therefore, Country A has a comparative advantage in the production of cheese and Country B has a comparative advantage in the
production of maize.
Question 8
Correct
MENU
Dashboard
the / that
instrument Courses / UNISA
the SARB / achieve
uses to 2023 / this
Semester
goal? 1 / ECS1601-23-S1 / Online assessments / Assessment 2
a and b
b and c
c 
b
a, b and c
Question 9
Correct

c. Increase taxes
Question 10
Correct
MENU

Source: South African Reserve Bank Quarterly Bulletin March 2022
Which of the following statements about the table above is correct?
a. There was no increase in direct investment between 2019 and 2021.

b. The large outflow of portfolio investment could be triggered by a ratings downgrade to junk status. 
c. Between 2019 and 2021, South Africa had a net inflow of investment in all sub-categories in the financial account.
d. The balance on the financial account for 2021 is -R24 295 million.
Between 2019 and 2021, there was a significant increase in net direct investment for South Africa. Net direct investment was R28 584 million
in 2019, R82 511 million in 2020 and R603 996 million in 2021.
An investment or credit rating downgrade to junk status makes South Africa relatively high risk to invest in. Therefore, when an economy
gets downgraded below investment grade (such as BBB – medium investment grade), certain investors will be forced to withdraw their
capital from South Africa. It could also be triggered by poor financial performance in certain industries and the government’s inability to
repay its debts. This is especially the case when the government has a high debt to GDP ratio that leaves much less for investment in
infrastructure, education and healthcare.
The financial account balance is calculated as follows:
Overall, South Africa had a net outflow from the financial account between 2019 and 2021 in the balance of payments. This is clearly
indicated in the balances for 2020 and 2021. Outflows of investment reduce the ability to accumulate reserve assets.
Question 11
Correct
MENU

a. The macroeconomic theory, investment refers to the total flow of funds.

b. Macroeconomic theory deals with events that occurred in the past..
c. Induced consumption refers to that part of consumption spending that does not change as income changes
d. If the marginal propensity to consume is 0.9 and the income level is 200,the level of induced consumption is 180. 
e. Income is the most important determinant of the level of investment.
The value of induced consumption depends on two variables(i) the marginal propensity to consume (c) ,which gives the slope of the
consumption function and (ii) the level of income(Y). Thus ,induced consumption in the question above will be as follows: Marginal
propensity to consume income which will be 0.9* 200=180.
Question 12
Correct
Thobile works as an economist and was asked to calculate the equilibrium level of income for each of the following years without a
government and foreign sector.
a. Y2021 = R 1064 billion; Y 2022 = R1491 billion 

b. Y2022 = R 700 billion; Y2022 = R1064 billion
c. Y
2021= R 1491 billion; Y2022 = R 800 billion
d. Y2022 =R 300 billion; Y2021 =R 300 billion

Question 13
Correct
MENU
Consider the graph below:

a. MPC is 1/4
b. MPC is 5/4
c. MPS is 1-1/4
d. MPC is 4/5 
e. MPC cannot be calculated from the given information
𝐶=𝐶̅+𝑐𝑌 𝐶=50+0.8𝑌
Therefore, the MPC is 4/5 which is 0.8

Question 14
Correct
MENU


production).
Question 15
Correct
MENU
Dashboard
Use / Courses
a Keynesian / UNISA
model (without / 2023 / Semester
a government 1 /sector)
and foreign ECS1601-23-S1
to calculate/the
Online assessments
answers / Assessment 2
for the question:

The value of autonomous spending is…
a. 15,00 million.
b. 35,00 million. 
c. 63,64 million.
d. 80,00 million.
e. 115,00 million.
The correct answer is R35 million because autonomous expenditure is equal to autonomous consumption (R15 million) + investment (which
is also autonomous, R20 million).
Question 16
Correct
If a household’s income falls from R20 000 to R17 000 and its consumption falls from R18 000 to R15 000, then its…
a. marginal propensity to consume is -0,67.

b. marginal propensity to consume is 0,88.
c. marginal propensity to consume is 0,20.
d. marginal propensity to save is zero. 
e. marginal propensity to save is 0,12.
Both consumption and household income change by R3000. This means that the marginal propensity to consume of this household is equal
to one. Marginal propensity to consume (MPC) is the ratio of the change in consumption to the change in income. MPC is always a positive
number between 0 and 1. MPC plus marginal propensity to save (MPS) equals to 1. Thus if, MPC is 0,75, MPS is 0,25. But if MPC is 1, then it
means MPS is zero
Question 17
Correct
MENU
If the MPC is 0,80,then the slope of the saving function is the following:
a. 0,20 
b. 0,15
c. 0,85
d. 0,80
If the marginal propensity to consume (c) is 0,8 the marginal propensity to save (s) is 1-c=1-0,8=0,2.
The slope of the savings function is equal to s, thus 0,2.
Question 18
Correct
According to the Keynesian consumption function, a decrease in income will cause in savings and_______in consumption.
a. an increase; an increase
b. an increase; a decrease
c. a decrease; a decrease 
d. a decrease; an increase
As income decreases, the consumption will decrease by a factor of the marginal propensity to consume. Similarly, the savings will decrease
by the factor of the marginal propensity to save. See section 6.6.
Question 19
Correct
MENU
Which of the following is likely to shift the consumption schedule upwards?

a. Expectations of a rise in interest rates.

b. Consumer prices are expected to fall.
c. A currently large stock of durable goods in the possession of consumers.
d. The expectation of a future rise in the consumer price index. 
Any increase in autonomous consumption will shift the consumption curve upwards. Therefore, any factor that causes an increase in
autonomous expenditure will shift the consumption function upwards. An expectation that interest rates will rise may cause a decrease in
consumption, as people may decide to borrow less because they expect interest rates to rise and their interest payments to become more in
future, shifting the consumption function downward.
If prices are expected to fall, consumers will most likely wait for the prices to fall before spending more on consumption. Therefore, such an
expectation will not shift the consumption function upwards. If consumers have a large stock of durable goods, this means they don’t have
to spend more on such goods now, and therefore the consumption function will most likely not shift upwards.
If prices are expected to rise, it is highly likely that consumers will now spend more before the price rise actually takes place, leading to an
upward shift of the consumption function. Refer to Box 6-2 where the factors that may cause a shift of the consumption function are
discussed.
Question 20
Correct
Which of the following statements is correct?
a. Consumption spending is a variable larger than 1 in the simple Keynesian model.

b. Investment spending is larger and more constant than consumption spending.
c. Investment spending is smaller but consumption is more predictable than investment spending. 
d. The investment decision involves only the cost of motor vehicles.
e. There is a direct relationship between the expected return on investment spending and wages.
Consumption spending is the largest component of total spending; investment is more variable and less predictable than consumption
spending. The investment spending refers to the production and purchase of capital goods such as machinery, buildings and equipment and
not just motor vehicles. There is an inverse relationship between the interest rate and the expected return on investment spending.
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Assessment 3 ►
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State Finished
Marks 15.00/20.00
Question 1
Incorrect
a) M3 consists of M2 plus a long-term deposit and is more of a comprehensive measure that includes funds held as a unit of account.
c) M2 consists of M1 plus medium-term deposit, and medium-term deposit is regarded as quasi money.
d) M2 consists of M1 plus short-term deposit, and medium-term deposit is regarded as quasi money.
a. a and b
b. a and d
c. b and d 
d. a, c and d
M3 consists of M2 plus long-term deposit and is more of a comprehensive measure that includes funds held as unit of account. M2 consists
of M1 plus short-term deposit and medium-term deposit is regarded as quasi money.
The correct answer is: a and d
Question 2
Incorrect
MENU
Which of the following statements is/are incorrect in explaining the tax being treated as leakage in the circular flow of income between
Dashboardand
household / Courses
firms? / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
a) Tax is the part of income that is received by households but then paid to government.
b) Tax is taken out of the circular flow of income.
c) Households can spend it on goods and services.
d) Tax is an amount that is withdrawn or leaked from the circular flow of income.
a. b only
b. a, b and c
c. b and c 
d. c only
e. b, c and d
Tax is taken out of the circular flow of income and households cannot spend it on goods and services.
The correct answer is: c only

Question 3
Correct
MENU
The following table gives the tax rates for individuals for the 2016 tax year:
2016 tax year (1 March 2015 - 29 February 2016)
Taxable income (R) Rates of tax (R)
0 - 181 900 18% of each R1
181 901 - 284 100 32 742 + 26% of the amount above 181 900
701 301 and above 208 587 + 41% of the amount above 701 300
If the government decides to increase the tax rate for those earning more than R701 300 from R208 587 + 41% of the amount above R701
300 to R208 587 + 43%, it implies that it has increased the … for high-income groups, which is an example of …
a. marginal tax rate; vertical equity. 

b. marginal tax rate; horizontal equity.
c. capital gains tax; value added tax.
d. minimum tax amount; vertical equity.
See section 3.6 of the textbook. The change from 41% to 43% is a change in the marginal tax rate, since it increases the percentage tax you
must pay on income above a certain threshold (R701 301). Since this is an increase for high income earners, we are dealing here with vertical
equity meaning that those who are more able to pay taxes should contribute more than those less able to pay tax. Horizontal equity means
that individuals with the same income should pay the same amount in taxes.
The correct answer is: marginal tax rate; vertical equity.
Question 4
Correct

Question 5
Correct
MENU
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price / on
decrease Courses / UNISA
the foreign / 2023
exchange / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
market?
a. The supply of Dollars will increase and the Rand will appreciate.
c. The demand for Dollars will decrease and the Rand will appreciate. 
The correct answer is: The demand for Dollars will decrease and the Rand will appreciate.
Question 6
Correct

c. Increase taxes
The correct answer is: Increase the repo rate.
Question 7
Correct
MENU
Use the following diagram to answer the question:

As a result of policy implementation, the aggregate spending curve swivel upwards from A1 to A2. Which policy was applied to achieve this
outcome?
a. Contractionary monetary policy

b. Expansionary fiscal policy 
c. Contractionary fiscal policy
d. Expansionary monetary policy
A contractionary monetary policy occurs when the monetary authorities raise the repo rate in order to reduce the interest rate with the aim
of maintaining price stability. When the monetary authorities implement a contractionary monetary policy, the result will be an increase in
interest rate, followed by a fall in investment spending due to the increase in the cost of borrowing. Therefore, the aggregate spending curve
will shift downwards from A0 to A1 as shown in the diagram. A swivel of the aggregate spending curve is caused by a change in tax rate
from A1 to A2 as shown in the diagram (or expansionary fiscal policy).
The correct answer is: Expansionary fiscal policy

Question 8
Correct
MENU
Consider the following diagram, which depicts the Keynesian model of an open economy with government:
Y0 represents…
a. the equilibrium level of income if the economy were closed. 

b. the equilibrium level of income if exports equal imports.
c. A level of income less than aggregate expenditure.
d. the level of income in an open economy with exports and imports reflected in the model.
e. the equilibrium level of income above the desired level
𝑌0 is the equilibrium level of income when the economy is closed.

𝑌1 is the equilibrium level of income after the introduction of the foreign sector
The correct answer is: the equilibrium level of income if the economy were closed.
Information
CASE STUDY 1
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Transition.

Question 9
Incorrect
MENU
23600000
 rand.
Question 10
Correct


Question 11
Correct
MENU
Dashboard
power / Courses
stations. Which of/the
UNISA / 2023 / Semester
five macroeconomic 1 / will
objectives ECS1601-23-S1 / Online
this initiative directly assessments
contribute to? / Assessment 6
a. Economic growth.
d. Price stability.
Question 12
Incorrect
Which of the following factors of production are mentioned in the case study?
(i) Natural resources
(ii) Capital
(iii) Labour

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Refer to the definitions of the various factors of production: natural resources, labour, capital and entrepreneurship. See page 5 of the
The correct answer is: (i), (ii) and (iii)
Information
CASE STUDY 1
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Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct


Question 15
Correct
MENU
Saretec has received financial assistance from Germany, to develop a wind turbine tower, rooftop solar panels, and storage batteries. This is
Dashboard
a( n) _____. / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
a. reduction of total expenditure in the circular flow of income and spending in the economy of South Africa
b. injection into the circular flow of income and spending in the economy of South Africa 
c. leakage from the circular flow of income and spending in the economy of South Africa
d. withdrawal from South Africa’s goods market
circular flow of income and spending. Refer to sec 1.4 of the prescribed book.
The correct answer is: injection into the circular flow of income and spending in the economy of South Africa
Question 16
Correct
challenge by _____.
Information
CASE STUDY 2
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Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct

Question 18
Correct
If the government intervenes to address the issues mentioned in paragraph 2 of the case study, the result will include _____.
(i) increased expenditure on public goods and services
(ii) pressure on government spending, particularly in basic infrastructure, housing, and the maintenance of law and order
(iii) increased aggregate spending, illustrated by a downward shift of the aggregate spending curve in the Keynesian model and a rightward
shift of the aggregate demand curve in the AD-AS model

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Refer to Section 3.4 and Section 9.1 in the prescribed textbook.

Question 19
Correct
MENU
curve.

Question 20
Correct
climate change?

◄ Assessment 5
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State Finished
Marks 18.00/20.00
Question 1
Correct
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
Assume the consumer price index increases to 72.3 in April 2014. What will be the annual inflation rate for April 2014?
a. 14.58 
b. 9.2
c. 18.6
d. 12.72

Question 2
Correct
MENU
Which one of the following is an example of inflation?

a. A 4% increase in the interest rate.

b. A 4% increase in the CPI. 
c. A 4% increase in the tax rate.
d. A 4% increase in the petrol price.
Question 3
Correct
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. 8.7
b. 1.74
c. 15.68 
d. 13.55

Question 4
Correct
MENU

a. Demand-pull inflation creates a situation known as stagflation.

b. Cost-push inflation is triggered by an increase in consumption spending.
c. An earthquake can trigger cost-push inflation. 
d. Cost-push inflation is described as “too much money chasing too few goods”.
Question 5
Correct
Paul lends R10 000 to his friend Steven for one year. They agree that Steven would pay the R10 000 back with 5% interest at the end of the
year. If the inflation rate is 6%, which of the following would be true for the real value of the amount that Steven pays back at the end of the
year?
a. It would be more than R10 000 but less than R10 500
b. It would be more than R10 500.
c. It would be exactly R10 500.
d. It would be less than R10 000. 
Question 6
Correct
If inflation accelerates due to the increase in the price of oil (an import), the best policy to combat such inflation in a country with a high
unemployment rate, would be to...
a. respond with demand management policy that will increase aggregate demand, which will be illustrated by a rightward shift of the
AD curve.
b. apply the supply-side policy that will increase aggregate supply, which will be illustrated by a rightward shift of the AS curve. 
c. implement contractionary monetary policy, illustrated by the rightward shift of the AD curve.
d. apply incomes policy, illustrated by a leftward shift of the AS curve.

Question 7
Correct
MENU

a. natural resources
b. imports 
c. government spending
d. capital widening
Question 8
Correct
a. upswing
b. recession
c. downswing
d. trough 
Question 9
Correct
Which one of the following is not one of the problems associated with GDP?
a. drug smuggling
b. increased labour force 
c. subsistence farming
d. negative externalities
Drug smuggling and subsistence farming constitute activities for which processes are not formalized and their contribution to the economy
is not easily quantified
Question 10
Correct
MENU

a. trough 
b. upswing
c. downswing
d. peak
Question 11
Correct
a. Seasonal unemployment is usually associated with economic recessions.

b. An increase in the aggregate demand for goods and services can reduce cyclical unemployment. 
c. Structural unemployment can be attributed mainly to a temporarily decline in the aggregate demand for goods and services.
d. Frictional unemployment is caused mainly by political frictional which gives rises to lower economic growth.
Question 12
Correct
When measuring unemployment, which of the following statements is/are true?

(a) According to the strict definition, unemployed refers to persons over 15 years old who are not working or self-employed, who were
available for paid employment or self-employment seven days before the interview and actively sought paid employment and self-
employment four weeks preceding the interview.
(b) The expanded or broad definition excludes persons who have the mere desire to find work, which implies it excludes discouraged
workers.
(c) There is no difference between the strict and expanded definition of unemployment.
a. Only c is correct.
b. Only a is correct. 
c. Only b is correct.
d. None of the alternatives is correct.
e. All the options are correct.
Question 13
Incorrect
MENU

Gross Domestic Production Population
2019 2020 2019 2020
448 billion 432 billion 201 Million 206 million
Answer:
3.57

Question 14
Correct
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. What is the unemployment rate?
Answer:
48%

Question 15
Incorrect
MENU

2019 2020 2019 2020
18,4 billion 15,8 billion 2,3 Million 2,35 million
Answer:
7.4

Question 16
Correct
Which one of the following implies an improvement in the economic wellbeing of the people of a country?
a. The increase in the real GDP of 10% is distributed evenly amongst the population of a country, which grew by 1%. 
b. The nominal GDP increased by 6%, while the price level increased by 6% and the population increased by 1%.
c. The nominal GDP increased by 10%, while the price level increased by 12% and there was no increase in the population.
d. The real GDP increased mainly due to an increase in defence expenditure.
For the economic wellbeing of the people of a country to improve, there must at least be an increase in the real GDP per capita. When the
increase in the price level (12%) was greater than the increase in the nominal GDP (10%), the real GDP and the real GDP per capita declined.
In the instance whereby the real GDP was unchanged, the real GDP per capita declined since the population increased by 1%, thus reducing
the Real GDP per capita. An increase in real GDP due to defence expenditure is regarded as a negative factor that does not increase the
economic wellbeing of the people of a country. In the case where the real GDP increased, it is also disturbed evenly amongst the population,
indicating an improvement in the economic wellbeing of the people of a country.
Question 17
Correct
MENU
Answer: 7 000 000 
Question 18
Correct
(a) an increase in population growth.
a. a), (b) and (c)

b. c) and (d)
c. a) and (d)
d. a) and (c) 
Question 19
Correct
What will happen to the unemployment rate and the inflation rate if the SARB decides to increase the repo rate?
a. Both will increase.

b. The unemployment rate will decrease and the inflation rate will increase.
c. Both will decrease.
d. The unemployment rate will increase and the inflation rate will decrease. 
If the repo rate increases, it will cause an decrease in inflation and an increase in unemployment.
Question 20
Correct
MENU
Dashboard
active, 13 000/ 000
Courses
people/ who
UNISA / 2023 / Semester
are unemployed, 1 / 000
and 40 000 ECS1601-23-S1 / not
people who are Online assessments
in the / Assessment
age category 4 What does Ghana’s
15 to 65 years.
Answer: 31 000 000 
◄ Assessment 3
Jump to...
Assessment 5 ►
MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
Answer:
2.5

Question 2
Correct
MENU
The interest rate influences the investment decision through the ...
(a) yield on capital goods.
(b) opportunity cost of investment.

(c) money supply.
(d) demand for money.
a. only (c)
b. (c) and (d)

c. only (a)
d. (a) and (b) 

The interest rate affects the investment decision in the economy in two ways: through the expected yield on capital goods and the
opportunity cost of investment. When firms have to borrow funds to finance investment spending, they have to pay interest on such loans at
the current interest rate. If the expected yield on capital goods is higher than the current interest rate at which the funds to finance it can be
borrowed, investment will be expected to be profitable. The interest rate that can be earned by buying financial assets, such as bonds and
acquiring a fixed deposit, is the opportunity cost of investment. If the interest rate that can be earned on financial assets exceeds the yield
on capital goods, businesses will prefer to acquire financial assets than investing in capital goods. See pages 170 and 172 in the prescribed
book.
Question 3
Correct
MENU
Dashboard
and / Courses
R50 billion / UNISA
a. R295.5 billion 
b. R150 billion
c. R167.5 billion
d. R365 billion
Question 4
Correct
MENU
Consider the following information to answer the question.

Government spending = 550
Exports = 330
Autonomous consumption = 280
Autonomous imports = 170

Investment expenditure = 120
Marginal propensity to save = 0,25
Answer:
4440

Question 5
Incorrect
Which of the following statements is/are correct about what influences South African exports?
a) Changes in exchange rates do have an influence on South African exports.
b) Changes in economic conditions in the rest of the world.
c) Changes in the demand for exports.
e) International competitiveness does not influence exports.
a, b and e
a and b 
a, b and c
a, c and e
a and c
SA exports are influenced by economic conditions in the rest of the world, international competitiveness, exchange rates, and the demand
for exports does not depend on the income level in SA; therefore, export spending is exogenous.
Question 6
Correct
MENU

Full employment output = R80 000 000
Investment = R25 000 000
Autonomous consumption = R15 000 000
Export = R8 000 000

Import = R8 000 000
The value of autonomous aggregate spending is
Answer:
40 000 000

Question 7
Incorrect
Y = 10 000
S = -250 + 0.65Y
I = 500
G = 1 100
Z (autonomous) = 200
X (autonomous) = 300
m=0,13

ii. The equilibrium level of income is 3 436.95.

b. (i) and (iii) are correct.
c. (i) and (ii) are correct. 
You have to calculate the autonomous expenditure, the multiplier and the equilibrium level of income to answer the question
Question 8
Correct
MENU
Other things equal, a reduction in personal and business taxes can be expected to ...
Select one:
a. increase aggregate demand and decrease total real production.
b. increase both aggregate demand and total real production. 
c. decrease both aggregate demand and aggregate supply.
d. decrease aggregate demand and increase aggregate supply.
Question 9
Correct
In response to the global producer price and food price inflation, high electricity and oil prices, the South African Reserve Bank decided to
increase the repo rate to 4.25%. The response is an example of ______
a. expansionary monetary policy.
b. expansionary fiscal policy
c. contractionary monetary policy. 
d. contractionary fiscal policy.

An increase in the repo rate at which SARB provides credit to the banks is an example of contractionary monetary policy.
A decrease in the repo rate at which SARB provides credit to the banks is an example of expansionary monetary policy.
An increase in government spending (G) or reduction in taxes (T) is an example of expansionary monetary policy while a decrease in
government spending (G) or increase in taxes (T) is an example of contractionary fiscal policy. See section 9.3 of the textbook.
Question 10
Correct
MENU
Other things equal, recessions in the economies of South Africa's trading partners will...
Select one:
a. cause inflation in the South African economy.
b. stimulate real output and employment in the South African economy.
c. depress real output and employment in the South African economy. 
d. increase tourists to South Africa from these countries.
e. have no perceptible impact on the South African economy.
Question 11
Correct
Select one:

Question 12
Correct
MENU
Select one:
Question 13
Correct
The question is based on the following diagrams, which show the aggregate demand and supply curves.
Which one of the diagrams above illustrates the effects of the contractionary fiscal and monetary policies?
Select one:
a. figure 3
b. figure 4
c. figure 2 
d. figure 1
Question 14
Correct
MENU
The monetary transmission mechanism …

Select one:
a. explains how the central bank transmits messages to the other banks.
b. describes how the Monetary Policy Committee announces its decisions.
c. explains how developments in the economy affect the monetary sector, especially the banks.
d. explains how banks create money.
e. describes the ways in which changes in the monetary sector are transmitted to the rest of the economy. 
Question 15
Correct
The effect of the decision by the South African Reserve Bank (SARB) to decrease the repo rate is shown by …
Select one:
a. figures 1 and 2
b. figure 1 
c. figures 2 and 4
d. figure 3
Question 16
Correct
MENU
Use the following figures to answer the question:

Based on the above figures, which of the following statements is/are correct?
(1) Figure 1 illustrates a decrease in tax while figure 2 illustrates an increase in the cost of capital.
(2) Figure 1 illustrates a decrease in net exports while figure 2 illustrates a decrease in capital costs.
Select one:
a. (1) and (2) are correct
b. only (2) is correct 
c. only (1) is correct
d. both (1) and (2) are incorrect.

Question 17
Correct
MENU
Suppose that the central bank reduces the repo rate. What will happen in the AD-AS model?
(a) Investment decreases
(b) Aggregate demand increases
(c) Consumption increases
(d) Income decreases

(e) Prices increase
Select one:
a. Only b, c and e are correct. 
b. Only a, d and e are correct.
c. All a, b, c, d and e are correct.
d. Only a, b, c and d are correct.
e. Only a and d are correct.
Question 18
Correct
In the AD-AS model, an increase in government expenditure …
Select one:
a. will increase the balance of payments deficit and decrease unemployment. 
b. will decrease the balance of payment deficit and decrease unemployment.
c. will decrease the balance of payments deficit and increase unemployment.
d. will increase the balance of payments deficit and increase unemployment.
Information
MENU
Question 19
Correct
What is the value of the multiplier at Y2?
Answer:
2

Question 20
Correct
MENU
The marginal propensity to consume is…

Answer:
0.5

◄ Assessment 2
Jump to...
Assessment 4 ►
MENU 

State Finished
Marks 15.00/20.00
Question 1
Incorrect
Which of the following statements is/are incorrect with regard to the main purpose of economic theory?
a) Economic theory aims to capture every detail of a phenomenon under study.
b) Economic theory explains how the real economy functions.
c) Economic theory aims to predict changes in economic conditions and its impact on the whole economy.
d) Economic theory serves as an underpinning for the formulation and analysis of economic policies.
a. a and b
b. a and c
c. a only
d. a, b, c and d 
The purpose of the economic theory is not to capture every detail of a phenomenon under study.
The correct answer is: a only
Question 2
Correct
If the national treasury decided to decrease the personal income tax, the quantity of money in the economy (ceteris paribus)…
a. cannot be determined.
b. will remain the same.
c. will decrease.
d. will increase. 
If the national treasury decided to decrease the personal income tax, the quantity of money in the economy will (ceteris paribus) increase.
The correct answer is: will increase.

Question 3
Correct
MENU
An indirect tax such as value-added tax is regressive since …

a. rich people pay a higher amount of taxes while poor people pay a lower amount of taxes.
b. poor people pay a higher amount of taxes while rich people pay a lower amount of taxes.
c. the percentage of income, which rich people pay towards taxes, is less than the percentage of income that poor people pay 
towards taxes.
d. the percentage of income, which rich people pay towards taxes, is more than the percentage of income that poor people pay towards
taxes.
See section 3.6 of the textbook. A tax is regressive if the ratio between tax paid and taxable income decreases as taxable income increases. In
the case of value-added tax, the percentage of income that rich people pay towards taxes is less than the percentage of income that poor
people pay towards taxes. It is therefore a regressive tax. Note that it is about the percentage of their income that they pay in tax and not
the amount of tax they pay.
The correct answer is: the percentage of income, which rich people pay towards taxes, is less than the percentage of income that poor
people pay towards taxes.
Question 4
Correct

0 - 181 900 18% of each R1

Question 5
Correct
MENU
Use the following information below to the question:

Which country has an absolute advantage in the production of petrol?
a. Russia has an absolute advantage in the production petrol. 
b. Both countries have an absolute advantage in the production of petrol.
c. Russia has a relative advantage in the production of petrol.

d. Ukraine has a relative advantage in the production of petrol.
Russia has to give up less petrol to produce one drone than Ukraine. Refer to pages 65-68 of the prescribed book, page 61in Part 1 of the
study guide, and pages 44-45 in Part 2 of the study guide.
Russia has an absolute advantage in the production petrol.
Question 6
Correct
Which of the following statements are correct examples of final goods and intermediate goods?
a) Thabo buys cake and milk for breakfast at the local supermarket.
b) Sne is a baker and buys milk, flour, sugar and so on to make delicious scones, which she sells to the community.
c) Sibusiso, a farmer, buys seed to plant vegetables.
a and b
b and c
b
c
a, b and c 
Final goods are sold to the consumer and the intermediate goods are sold to be used as part of the production process.
The correct answer is: a, b and c
Question 7
Correct
MENU
Assume that country A relies more heavily on imports than country B, while other macroeconomic conditions are the same. If there is a
Dashboard
positive / Courses
relationship / UNISA
between / 2023
domestic / Semester
economic activity1and
/ ECS1601-23-S1
imports, then the/ multiplier
Online assessments
of country A/ will
Assessment
be_____. 6
a. larger than country B’s.

b. smaller than country B’s. 
c. as large as country B’s.
d. uncertain.
Country A has a larger marginal propensity to import(MPM) that is larger than Country B, ceteris paribus. Since the Multiplier is defined as:
=1/1-c(1-t)+m
As the MPM increases, this makes the multiplier decreases, thus the multiplier for Country A will be small than the multiplier for Country B.
The correct answer is: smaller than country B’s.

Question 8
Incorrect
MENU

Which event must happen for the aggregate spending curve to shift downwards as shown in the diagram?
a. An increase in interest rate

b. A decrease in interest rate 
c. A decrease in tax rate
d. An increase in government spending
An increase in interest rate causes a fall in investment spending (due to the high borrowing cost). Thus, a fall in investment spending reduces
aggregate spending, thereby shifting the aggregate spending curve down.
The correct answer is: An increase in interest rate
Information
CASE STUDY 1
MENU
Transition.
Question 9
Correct
240500000
 rand.

Question 10
Correct
MENU
The impact of the pledged $8.5 billion flowing into the South African foreign exchange market will be illustrated by _____
a. figure 1 
b. figure 2
c. figure 3
d. figure 4
The figures show the market for US dollars. A change in demand for and supply of dollars will lead to a shift in the curve. The demand for
dollars occurs when exchanging rand into US dollars. While the supply of the US dollar happens when the US dollar is converted into rand.
Study pages 71 to 76 of the prescribed textbook.
The correct answer is: figure 1

Question 11
Correct
MENU
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)
Question 12
Incorrect
(ii) Capital
(iii) Labour

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct

Question 15
Correct
MENU
a. withdrawal from the circular flow of income and spending in the economy of Germany 
b. withdrawal from the circular flow of income and spending in the economy of South Africa
d. reduction of total expenditure from the circular flow of income and spending in the economy of South Africa
circular flow of income and spending in South Africa. Refer to sec 1.4 and 1.5 of the prescribed book.
The correct answer is: withdrawal from the circular flow of income and spending in the economy of Germany
Question 16
Correct
a. Economic growth.
d. Price stability.
Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct
a. Point a
b. Point b 
c. Points a and c
d. Point c
Question 18
Correct
MENU
Dashboard
What type of/unemployment
Courses / UNISAwill be/ exacerbated?
2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6


b. (ii) and (iii)
c. (iv) 
d. (i) and (iii)
e. (v)

Question 19
Correct

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 

Question 20
Incorrect
MENU
(ii) Capital
(iii) Labour

b. (ii) and (iii) 
c. (i)
d. (i) and (iii)

The correct answer is: (i), (ii), and (iii)
◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
year. If the inflation rate is 6%, which of the following would be true for the real value of the amount that Steven pays back at the end of the
year?
a. It would be less than R10 000. 

b. It would be more than R10 000 but less than R10 500
c. It would be exactly R10 500.
d. It would be more than R10 500.
Question 2
Correct
Inflation can be caused by a/an ...... Within the AD-AS model, this will be illustrated by a ......
a. decrease in exports earnings; leftward shift of the AD curve

b. high wage demands by trade unions; leftward shift of the AS curve 
c. fall in crude oil price; rightward shift of the AS curve
d. rise in consumption spending; leftward shift of the AD curve
See section section 10.4 of the prescribed textbook.

Question 3
Correct
MENU
a. Its growth rate is always greater than that of CPI.

b. It has the same weights as CPI.
c. It measures the cost of production. 
d. It measures the cost of living.
Question 4
Correct
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
a. 8.7
b. 15.68 
c. 13.55
d. 1.74

Question 5
Correct
MENU

a. decrease taxes.
b. increase the repo rate. 
c. decrease productivity.
d. increase aggregate spending.
Question 6
Correct
a. government spending; rightward shift of the aggregate demand curve

c. wages; leftward shift of the aggregate supply curve
d. interest rates; leftward shift of the aggregate demand curve
Question 7
Correct
a. increase; increase
b. decrease; increase.
c. increase; decrease. 
d. decrease; decrease.
Question 8
Correct
MENU
Which one of the following statements regarding unemployment is correct?

a. Following a recession, Mandla loses his job in the mines job due to lack of sufficient demand for aggregate demand in the 
economy. Mandla is cyclically unemployed.
b. Lebo would like to earn money, but just cannot be bothered to apply for a job. Lebo is seasonally unemployed.
c. Masindi is trained as a nurse. She is moving to Tshwane soon, so she quit her job in Durban. Masindi is confident that she will find a
job in Tshwane and we may therefore classify her as structurally unemployed.
d. Tariff reduction in the textile industry and illegal imports forced the textile factory where Mpho works to close down. Mpho and his
colleagues are frictionally unemployed.
Question 9
Correct
If workers in the mines are retrenched because of a recession, what do you call this type of unemployment?
b. cyclical 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.
Question 10
Correct
Economists define economic growth as a(n )…
a. gross domestic product per capita.

b. increase of current GDP per capita.
c. increase of nominal GDP over time.
d. increase of real GDP over time. 
Economists define economic growth as an increase of total real output or real output per capita over time, usually on an annual basis. Refer
to the definition and measurement of economic growth on page 410 in the prescribed textbook.
Question 11
Correct
MENU
a. an increase in unemployment rate; a decrease in inflation rate.

b. an increase in unemployment rate; a decrease in inflation rate.
c. a decrease in unemployment rate; an increase inflation rate. 
d. a decrease in unemployment rate; a decrease in inflation rate.
higher inflation.
Question 12
Correct
a. increased labour force 

b. drug smuggling
Question 13
Correct
MENU
Dashboard / Courses
a. structural unemployment. 
b. seasonal unemployment.
c. cyclical unemployment.
d. frictional unemployment.
workers.
Question 14
Correct
Suppose South Africa’s population comprise 18 000 000 people who are unemployed, 23 000 000 employed, 13 000 000 students, 10 000
000 home-maker, 12 000 000 not economically active, and 45 000 000 people who are not in the age category 15 to 65 years. What does
South Africa’s labour force population equal?
Answer: 41 000 000 

Question 15
Incorrect
MENU

2019 2020 2019 2020
Answer:
1.2

Question 16
Correct
Answer: 7 000 000 

Question 17
Correct
MENU

a. an increase in the number of people who are hired

b. a decrease in the number of new entrants in the labour market
c. an increase in the number of people looking for a job 
d. a decrease in the number of people who are laid off
Question 18
Correct
Answer:
5.71%

Question 19
Incorrect
MENU

2019 2020 2019 2020
Answer:
-3.57%

Question 20
Correct
a. The unemployment rate will decrease and the inflation rate will increase.
b. Both will decrease.
c. Both will increase.
◄ Assessment 3
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Assessment 5 ►
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Started on Tuesday, 28 March 2023, 8:10 AM

State Finished
Completed on Tuesday, 28 March 2023, 8:16 AM
Marks 17.00/20.00
Question 1
Correct
The financial account is a component of the balance of payments. Which of the following transactions would be recorded in the account?
a. sales of machinery from South Africa to China

b. importing rubber from Thailand for the production of tyres in South Africa
c. South Africans purchasing shares on the JSE
d. American Corporations purchasing land and buildings in South Africa 
Question 2
Correct
As a result of more Americans visiting South Africa, we can expect, ceteris paribus
a. an appreciation of the Rand relative to the Dollar. 
b. a depreciation of the Rand relative to the Dollar.
c. an appreciation of the Dollar relative to the Rand.
d. that it will cost South Africans more to visit the United States.
e. an appreciation of the Dollar relative to all major currencies.
An increase of American tourists into South Africa will increase the supply of dollars on the South African foreign exchange market, ceteris
paribus. The supply curve for dollars on the South African foreign exchange market, will thus shift to the right, while the demand for
dollars curve will remain constant, ceteris paribus. The rand will appreciate relative to the dollar, while the dollar will depreciate relative to
the rRand. Refer to pages 71 to 76 in the prescribed textbook prescribed book, as well as figures 4-3 and Tables 4-1 and 4-2.
Question 3
Correct
MENU


Question 4
Correct
John has invested R100 000 in the Old Mutual Global Equity Fund, with 25% of the total invested in US companies while the remaining 75%
is invested in Germany, France and the United Kingdom. If the Rand/Dollar exchange rate is R16,59/US$1, by how much has John increased
money supply in the US?
a. US$6 027,73
b. US$1 506,93 
c. US$4 520,80
d. US$414 750
First, calculate 25% of the total investment, which is invested in the US: R100 000 × 0,25 = R25 000
Then convert the R25 000 invested in the US into Dollars, using the Rand/Dollar exchange rate: R25 000/16,59 = US$1 506,93
Given that the investment that John is making in the US is an inflow of South African Rand into the US foreign exchange market, it increases
the US money supply (particularly the supply of Rand).
Question 5
Correct
MENU
Dashboard
an import tax/ ofCourses / UNISA
15% is levied / imported
on the 2023 / Semester 1 / is ECS1601-23-S1
boots. What the total value of/ the
Online
itemassessments / Assessment
imported in South 2
African Rand?
a. R4 655,75
b. R698,36
c. R5 345,11 
d. R6 133,47
Question 6
Incorrect
MENU

a. a and d
b. b and c
c. a, b, c and d 
d. a, b and c
Question 7
Correct
MENU

a. a and c
b. b and d
c. a, b, c and d
d. only b and c 
Question 8
Correct
MENU
Which one of the following must be considered when the gross domestic product(GDP) is estimated?
a. John purchases shares to the value of R150 000 in Anglo American plc.
b. Peter invests in a 24-month tax-free deposit.
c. A firm buys Mpho, its sales representative, a new car.
d. Patrick, a university student, buys a second-hand car.
e. Anne, a civil pensioner, receives her monthly pension from the government. 
GDP is the total value of all final goods and services produced within the boundaries of a country in a particular period (usually one year). An
important aspect of this definition to note is that only final goods and services that are produced during a particular period are included in
the calculation of the GDP. The GDP is therefore concerned with the production of new goods and services(also called current production)
during a specific period. Goods produced during earlier periods and sold during the period under consideration are not included in the GDP
for the latter period. The GDP reflects only production that occurred during the period in question. Thus, Option four, which refers to the
purchase of a second-hand car, made in a previous year of period, will not be included in the estimation of the GDP for this period, as this is
not classified as a new good or part of current production. See pages 82 to 87 in the prescribed book.
Question 9
Correct
a and b
b and c
b
c
a, b and c 
Question 10
Correct
MENU
This question is based on the figure below:

Which of the following statements about the figure above are correct?
(a) Zimbabwe has the lowest Gini coefficient of the four countries.
(b) South Africa is the most unequal society based on the Lorenz Curve.
(c) Inequality is greater in the United Kingdom (UK) than in the United States (US).
(d) The Lorenz Curve and Gini coefficients measure inequality from a multidimensional perspective.
a. a, b, c and d
b. a and c
c. only b 
d. only d
The degree of income and wealth inequality is measured by the area between the line of perfect equality (the diagonal) and the Lorenz
Curve for a given country. Therefore, the further the Lorenz Curve for a given country is from the line of perfect equality, the higher its Gini
coefficient and the greater its degree of inequality. Therefore, Zimbabwe is the second furthest economy from the line of perfect equality.
This means that it has the second highest Gini coefficient, making it the second most unequal society of the four countries.
South Africa is indeed not only the most unequal economy of the four countries but also the most unequal economy in the world based on
the Gini coefficient. Of the four countries, it is the furthest from the line of perfect equality and has the highest Gini coefficient.
The Lorenz Curve for the UK is closer to the line of perfect equality than that of the US. Therefore, inequality is lower in the UK than in the
US. Note that the Lorenz Curve for the US is further from the line of perfect equality. This means that the Gini coefficient of the US is higher
than that of the UK.
The Gini coefficient and Lorenz Curve measure inequality only in terms of income and wealth. This reveals the limitation of these measures
because they do not include other factors that affect economic participation. When measuring inequality from a multidimensional
perspective, it would be measured in terms of access to education, healthcare, housing, water and sanitation.
Question 11
Incorrect
MENU
Which of the following statements is correct in the simple Keynesian model?

a. When the output exceeds current aggregate expenditure, the economy will experience an unplanned fall in inventories. 
b. If autonomous consumption is zero, the savings function is a horizontal line.
c. A fall in investment will shift the aggregate expenditure function upwards.
d. An increase in the marginal propensity to save will decrease aggregate expenditure and equilibrium output will fall.
When AE < Y, the economy experiences an unplanned increase in inventories. A fall in investment will decrease the aggregate expenditure,
which results in a shift downward. When autonomous consumption is zero, the savings function remains upwards as long as the marginal
propensity to save is positive. The MPS and MPC have an inverse relationship; thus, a rise in the MPS will decrease the MPC, resulting in the
AE curve becoming flatter and equilibrium output falling.
Question 12
Correct
The question is based on the following information:
Which one of the following below is a savings function?
a. 
b.
c.
d.
The formula for the savings function is

Question 13
Correct
MENU


production).
Question 14
Correct
MENU

Which of the following statements about the diagram above are correct?
(a) At point E2, producers have an incentive to produce more goods.

(b) Aggregate spending in the economy increased by R125 million.
(c) At point E1, there is an excess demand for goods and services in the economy.
(d) The movement from point E1 to E2 can result from L’Oréal expanding one of its factories in South Africa.
a. only a
b. a and b
c. only c
d. b and d 
At point E2, the economy is in equilibrium – which means that neither producers nor consumers have an incentive to change their behaviour.
In this case, producers have no incentive to produce more goods. At equilibrium point E2, factors of production are used optimally.
Aggregate spending has shifted upwards from A1 to A2; at A1 aggregate spending is R150 million and at A2 aggregate spending is R275
million. Therefore, there is an increase of R125 million in aggregate spending: R275 million – R150 million = R125 million.
At point E1, A = Y – which indicates that the economy is in equilibrium. An excess demand for goods and services would be in the area
where A > Y (area above A = Y). An excess supply of goods and services would be in the area where A < Y (area below A = Y).
When L’Oréal (a French multinational skincare and beauty company) expands one of its factories in South Africa, it is an increase in
investment expenditure. When the company opens factories in South Africa, it is foreign direct investment into the economy. Therefore, an
expansion of one of their factories increases employment, output and income in the economy. This would shift aggregate spending upwards
from A1 to A2 and move the South African economy from E1 to E2.
Question 15
Correct
MENU

b. a and b
c. b and c
d. a and c
Question 16
Correct
MENU
The question below is based on the following equations, which refer to a model of a closed economy without a government sector.
A=C+I
C = 600 + 0,75Y
I = 200
a) The value of the multiplier is 0,25.

b) The equilibrium income level is 3 200.
c) If investment increases, the equilibrium level of income will increase.
a. a
b. All the statements are correct.
c. a and b
d. a and c
e. b and c 
f. c
The multiplier is computed as: Q10
The MPC is 0.75, thus

Q10ANSWER
Q10ANS3
Equilibrium Level is:

An increase in Investment will increase aggregate spending and lead to an increase in equilibrium income.
Question 17
Incorrect
MENU
a. It means that 60% of the increase in income is saved, while the remaining 40% will be used for consumption. 
d. It means that 60% of an increase in income will be used for consumption, while the remaining 40% will be saved.
Q6
Question 18
Correct
a) Induced consumption refers to the fixed part of consumption spending which does not change as the level of income changes.
b) The slope of the consumption function is always greater than that of the aggregate spending curve.
c) If the marginal propensity to save increases, the equilibrium level of income will increase.
a. All the statements are correct.

b. a and b
c. b and c
d. a and c
e. None of the statements are correct. 
Induced consumption is the component of consumption that is determined by the income level (cY). c is incorrect as an increase in the
marginal propensity to save will reduce the multiplier (by reducing the marginal propensity to consume) reducing equilibrium income,
consequently option c is incorrect. Slope of the consumption function is less than the aggregate expenditure curve, as a result option b is
incorrect.
Question 19
Correct
MENU
The equation C = 80 + 0,75Y, where C is consumption and Y is disposable income, tells us that
a. households will consume 0,25 of whatever level of disposable income they receive.
b. households will consume R80 if their disposable income is zero and will consume 0,75 of any increase in disposable income they 
receive.
c. households will save R80 if their disposable income is zero and will consume 0,75 of any increase in disposable income they receive.
d. households earn R80 and spend three quarters of their income.
As discussed in section 6.3, the consumption function provided in this question indicates that autonomous consumption is R80, i.e. this is
how much consumption will be even if income is zero, while it indicates that the marginal propensity to consume is 0,75 which indicates that
0,75 of any increase in income will be consumed. Households saving will decrease by R80 at in income level of zero. The consumption
function does not contain information about the actual income level.
Question 20
Correct
Jump to...
Assessment 3 ►
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State Finished
Marks 19.00/20.00
Question 1
Correct
Suppose that the South African Reserve Bank decides to ______ the interest rate. The impact on the investment function is a/an _________ in
investment spending and will result in a/an ________ shift in the aggregate expenditure curve.
a. lower; increase; downward

b. lower; decrease; downward
c. raise; decrease; downward 
d. raise; increase; upward
See section 8.2. of the prescribed textbook.
Question 2
Correct
What will the equilibrium level of income be?
Answer:
87 500 000

Question 3
Correct
MENU

Which of the following statement(s) about the diagram above are correct?
(a) Opening the economy to international trade has reduced the equilibrium level of income.
(b) At YB, the balance of payments is in equilibrium.
(c) At Y2, the economy is faced with a balance of payments deficit.
(d) The multiplier for A2 is larger than that of A1.
a. a, c and d
b. only d
c. only c
d. a, b and c 
The first aggregate spending function A1 is that of a closed economy, while aggregate function A2 is that of an open economy. This is
because exports (X) and imports (Z) have been added to indicate that the country is open to international trade. Notice that the aggregate
spending function A2 has placed the economy on a lower equilibrium level of income E2 on A = Y. The initial equilibrium level of income Y1
(before the economy opened to international trade) is greater than Y2. At YB, the difference between exports and imports (X – Z) is zero,
where A1 and A2 intersect. At this point, the balance of payments is in equilibrium.
At Y2, the economy is in a balance of payments deficit because the equilibrium level of income is to the right of YB. This is because at this
point, imports are greater than exports – that is, X < Z (net exports are negative). Similarly, any point to the left of YB would denote a
balance of payments surplus, where exports are greater than imports – that is, X > Z (net exports would be positive).
The multiplier for aggregate spending function A2 is smaller than that of A1. Therefore, a lower multiplier reduces the equilibrium level of
income from E1 to E2 on A = Y. See Section 7.3 on page 158 of the prescribed book for a detailed discussion of factors affecting the size of
the multiplier.
Question 4
Correct
MENU
Dashboard
and / Courses
R50 billion / UNISA
b. R150 billion
c. R365 billion
d. R167.5 billion
Question 5
Correct
MENU


Marginal propensity to consume 0,8
What is the size of the multiplier?
Answer:
5

Question 6
Correct

Export = R8 000 000
Import = R8 000 000

Answer:
40 000 000

Question 7
Correct
MENU
Select one:
Question 8
Correct
Select one:
Question 9
Incorrect
MENU
Y = 10 000
S = -250 + 0.65Y
I = 500
G = 1 100
m=0,13

a. (i) and (ii) are correct.

c. (i), (ii) and (iv) are correct. 
Question 10
Correct
written as…
Select one:
a. A=C+I+G. 
b. A=C+I+G+X+Z.
c. A=C+I.
d. A=C+I+G+X-Z.
Question 11
Correct
MENU
In the Keynesian model including the government and foreign sectors, imports are dependent on …
Select one:
a. investment.
b. exchange rates.
c. interest rates.
d. domestic income. 
Question 12
Correct
a. contractionary monetary
b. contractionary fiscal
c. expansionary fiscal 
d. expansionary monetary
South Africa’s response to the pandemic included an increase in government expenditure. An increase in government spending (G) or
reduction in taxes (T) is an example of expansionary monetary policy, while a decrease in government spending (G) or increase in taxes (T) is
an example of contractionary fiscal policy.
An increase in the repo rate at which the South African Reserve Bank (SARB) provides credit to the banks is an example of contractionary
monetary policy. A decrease in the repo rate at which the SARB provides credit to the banks is an example of expansionary monetary policy.

Question 13
Correct
MENU
Suppose that Y = C + I + G + X – Z. Which of the following can be illustrated by a rightward shift of the AD curve?
(a) Increased technological innovation and political stability.
(b) A boom in major economies such as China, which are South Africa’s major trading partners.
(c) Depreciation of the local currency against the world’s major currencies due to speculation.
Select one:
a. Only (a) is correct
b. Only (c) is correct
c. All (a), (b) and (c) are correct 
d. Only (a) and (b) are correct
e. Only (b) and (c) are correct
Question 14
Correct
The appropriate demand management policy during a recession is ...
Select one:
a. an increase in interest rates.
b. a contractionary monetary policy.
c. a decrease in government spending.
d. a decrease in tax rates. 
Question 15
Correct
Select one:
Question 16
Correct
MENU
The monetary transmission mechanism …

Select one:
a. explains how the central bank transmits messages to the other banks.
b. describes how the Monetary Policy Committee announces its decisions.
c. explains how developments in the economy affect the monetary sector, especially the banks.
d. explains how banks create money.
e. describes the ways in which changes in the monetary sector are transmitted to the rest of the economy. 
Question 17
Correct
Select one:
Question 18
Correct
MENU
Which of the following best demonstrate a movement that would result from the social relief grants offered to households that were
negatively affected by the COVID-19 induced lockdown?
Select one:
a. b to c on figure 3
b. b to c on figure 2
c. a to c on figure 4
d. b to c on figure 1 
Information
MENU
Question 19
Correct
Answer:
0.5

Question 20
Correct
MENU
An upward shift of the aggregate spending curve from A to A’ was due to the introduction of
[1] government spending
[2] taxes
[3] Investment spending
[4] consumption spending
a. [2] and [3]
b.
[1], [3] and [4]
c. [1] 
d.
[3] and [4]
◄ Assessment 2
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Assessment 4 ►
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Dashboard / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments
Started on
/ Assessment Thursday, assessment
7: Alternative 6 April 2023,1 5:31 PM
State Finished
Completed on Thursday, 6 April 2023, 6:19 PM
Marks 14.00/18.00
Question 1
Incorrect
South Africa’s fiscal budget is as follows:
R Billions 2018/19 2019/20 2020/21 2021/22 2022/23
Consolidated Spending (Billions)1642,5 1807,1 1964,1 2077 2157,3
Budget Revenue (Billions) 1447,7 1519,3 1406 1721,3 1770,6
Source: National Treasury, Budget 2022
(i) South Africa experienced a budget surplus in the 2018/19 financial year.
(ii) South Africa will experience a budget deficit in 2022/23 financial year.
(iii) The stock of public debt in South Africa has increased by R355.7 billion in the 2021/22 financial year.
(iv) In the absence of borrowings, the R355.7 billion deficit in 2021/22 can be financed with dividends from state-owned enterprises.
a. (iii) and (iv) are correct.

b. (ii) and (iv) are correct. 
c. (ii), (iii) and (iv) are correct.
The budget deficit is defined as the difference between budget revenue and consolidated spending. A budget deficit needs to be financed
from borrowings and consequently, the deficit is equivalent to the rise in total debt stock. In the absence of borrowings, a budget deficit can
be financed from the use of income from State-Owned Enterprises.
Information
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Monthly
Dashboard / Courses / UNISA Salaries
/ 2023 - 2020 1 / Monthly
/ Semester Salaries/- 2021
ECS1601-23-S1 Online assessments
CEO
/ Assessment 7: Alternative R 21 million 1
assessment R 22 million
years.

Question 2
Correct
Tax such as VAT would generally be regarded as
a. progressive, because most goods consumed by poor households are zero rated.
b. regressive, because low-income households spend a greater proportion of their income on goods that attract VAT. 
c. proportional, because the VAT rate is constant across goods that attract VAT.
d. regressive, because the VAT burden increases as household income rises.
e. progressive, because the consumption expenditure of the rich is greater than that of the poor.
A tax is regressive if the ratio between tax paid and taxable income decreases as taxable income decreases (or rises as taxable income falls).
In other words, a regressive tax takes a larger percentage of the income of low-income individuals and groups than of those with higher
incomes. Indirect taxes (for example, VAT) are often regressive. See page 59 in the prescribed book.
Question 3
Correct
MENU
The SARB has increased interest rates aggressively in 2022 to maintain its mandate of driving down inflation to within its target range of
Dashboard
between 3% /andCourses / UNISA
6%. In the money /market,
2023 this
/ Semester
would be1illustrated
/ ECS1601-23-S1 / Online assessments
by which diagram?
/ Assessment 7: Alternative assessment 1
a. [2] 
b. [1]
c. [3]
d. [4]
Question 4
Correct
MENU


a. Money is not the only possible store of value. 
b. Money can never lose its usefulness as a unit of account.
c. In a monetary economy, there always has to be a double coincidence of wants.
d. The stock of money consists of notes and coins.
e. Money is always the best possible store of value.
The store of value is not unique to money. During periods of high inflation, money loses its purchasing power, and it is not a good store of
value. During inflationary periods, there is thus a tendency to use other objects as stores of value (for example fixed property, shares and
works of art. See page 24 in the prescribed book.
Question 5
Correct
MENU
/ Assessment 7: Alternative assessment 1 Household A Household B
Income (R) 5 000 1 500
PAYE (R) 1 500 200

a. (i), (ii) and (iii) are correct.

c. (i) and (ii) are correct.
d. (i) and (iii) is correct. 
e. (iii) is correct.

Question 6
Correct
MENU
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. decrease the repo rate.
b. increase the repurchase rate (repo rate). 
c. reduce the cost of credit to the banks.
d. purchase government bonds on the open market.
e. use moral suasion to persuade banks to provide more loans to their clients.
When banks experience a shortage of funds or a liquidity deficit, they can borrow from the SARB at a specific interest rate called the
repurchase rate. When the inflation rate is expected to exceed the target rate (in South Africa, it is 3% to 6%), the SARB might have to
increase the repo rate. Since the repo rate represents a cost to the bank, an increase in the repo rate will result in an increase in the interest
rate at which the bank will be willing to provide credit to its customers. The cost of credit (interest rate) will thus increase immediately. The
result will be a decrease in the stock or quantity of money in the economy.
Question 7
Correct
In the circular flow of income and spending in South Africa, spending by firms in the factor market becomes ________ households, while
________ households in the goods market becomes ________.
a. spending by; spending by; income to firms

b. spending by; income to; income to firms.
c. income to; income to; spending by firms
d. income to; spending by; income to firms 
Firms are primarily engaged in production. Therefore, firms will have to purchase the factors of production from households in the factor
market. Households need to be remunerated for the factors of production in the form of different types of income. This income of
households is then used to purchase goods and services in the goods market from firms, which then becomes income for firms. Exports an
addition or injection into the circular flow of income and spending in the domestic economy. See pages 6 and 7 in the prescribed book.
Question 8
Correct
MENU

a. Causation between two variables proves correlation.
b. Causality between two variables always implies correlation.
c. Correlation between variables occurs when two variables have a relationship 
d. An example of correlation is when an increase in the value of imports causes a rise in economic growth.
Question 9
Incorrect
between 3% and 6%. In the money market, the……
(ii) demand for passive balances will decrease.
(iii) total demand for money (L) will decrease and will be reflected by downward slide along the L curve.
a. Only (ii) is correct 

b. (ii) and (iii) are correct
d. (i) and (ii) are correct
Question 10
Correct
When the income level increases, the demand for …..money increases, which results in a/an …..increase.
a. transaction; active balance 

b. transaction; passive balance
c. speculative; passive balance
d. speculative; active balance
When the income level increases the demand for transaction increases, which results in an increased active balance.
Question 11
Incorrect
MENU
Emily (who holds a master's degree in Economics and has five years of work experience) has been appointed as an economics researcher at
Dashboard / Courses /(PwC),
PricewaterhouseCoopers UNISA / 2023 services
a financial / Semester 1 / At
company. ECS1601-23-S1 / Online
her workstation, she willassessments
be using the Apple MacBook Air 13-inch laptop
with a high-resolution
/ Assessment screen display.
7: Alternative The degree
assessment 1 and experience she is bringing to the company are considered a __________, while the
laptop she will be using is an example of__________as a factor of production.
a. human capital; capital

b. capital; entrepreneurship 
c. entrepreneurship; technology
d. human capital; labour
Emily is coming to PwC as a masterís graduate and experienced worker; therefore, she is coming as a skilled worker. A master's degree
requires graduates to have specialised knowledge in a specific subject area and the ability to conduct independent research. So, the degree
and five yearsí work experience she is bringing to the company are a labour factor of production. The Apple MacBook Air that Emily will be
using to conduct economics research for the company is a capital factor of production she will be using. In this case, she will be using the
device to provide (produce) services. Such services include research reports, presentations, and meetings through apps like Zoom and
Microsoft Teams. However, this laptop can also be regarded as technology due to its high performance and use of Microsoft Office.
Entrepreneurship refers to individuals who employ other factors of production to provide goods and services with the aim of making a
profit. Entrepreneurs start their own firms after identifying opportunities where they can introduce an innovation that similar, existing firms
in a market do not sell to consumers. This process involves taking a risk, as there is no guarantee that the firm will be profitable or that
consumers will respond well to the new product or service.
Technology as a factor of production is usually embedded in capital. For instance, Microsoft Teams is a software programme to set up virtual
meetings, make calls, share documents and do presentations. Therefore, we can regard this software as a technology used for multiple
purposes. Technology is not restricted to software installed in a computer and can also include devices such as the MacBook Air. This is an
ultra-thin, lightweight laptop with a powerful graphics processing unit (GPU). It performs at high speed, getting things done faster.
Question 12
Correct
Ayanda is from Lesotho. She got a job in South Africa in 2020; she earned a salary of R30 000 a month and paid income tax of R3 300. In
2022, her salary increased to R35 000 a month and she paid an income tax of R3 600. Income tax paid by Ayanda is an example of a … tax.
a. general
b. regressive
c. proportional
d. progressive 
As the salary increases, the income tax bracket increases hence the tax is progressive.
Question 13
Correct
MENU
Households are confronted with………, but with ………resources with which to satisfy those wants.

a. unlimited wants; unlimited
b. limited wants; unlimited
c. limited wants; limited
d. unlimited wants; limited 
Households are confronted with unlimited wants, but with limited resources to satisfy those wants.
Question 14
Correct
15120000

Question 15
Incorrect
MENU

a. The amount of coins and notes in circulation decreased in 2021.
b.
The amount of short- and medium-term deposits decreased by 57.85%.
c. 
The amount of long-term deposits rose by 4.65%.
d. The amount of long-term deposits increased by 22.81%.



Question 16
Correct
MENU
Dashboard
for / months.
the past 12 Courses In
/ this
UNISA
case,/ the
2023 / Semester
monthly 1 / ECS1601-23-S1
rental income / aOnline
is an example of assessments
__________ variable.
a. liquidity
b. flow 
c. stock
d. credit
Question 17
Correct
Which of the following statements about the demand for money is correct?
a. Money creation is not affected when a bank finds that one of its clients in need of a loan to expand his/her business is not
creditworthy.
b. Transaction demand for money is a function of the interest rate.
c. When additional cash is kept in a cheque account, this represents the function of money as a store of value.
d. When the interest rate increases, the opportunity cost of not holding bonds increases. 
When people decide to hold money balances rather than invest the money in bonds, the opportunity cost of not holding bonds increases.
Therefore, when the interest rate increases, people forfeit (lose) the interest they would have earned on interest-bearing securities (bonds).
So, when the interest rate goes up, it also raises the opportunity cost of not holding bonds. People earn higher interest if they hold bonds
while the interest rate increases. See page 30 and Box 2-5 in Section 2.5 on page 36 of the prescribed book for a detailed explanation of
Keynes’s speculative demand for money.
Transaction demand for money is a function of the total income in the economy and arises from the function of money as a medium of
exchange. This is because money is needed to pay for goods and services, and to settle accounts. Therefore, the transaction demand for
money is independent of the interest rate. This means that changes in the interest rate do not affect the transaction demand for money. See
pages 30 to 32 and Figure 2-1 in the prescribed book.
A cheque account is mainly used to pay for transactions; it is not used as an interest-bearing account for savings and investments. Therefore,
the payments and receipts in a cheque account represent the function of money as a medium of exchange. The additional cash that remains
in this account is idle and is not invested in bonds or shares that would offer a return to consumers. The function of money as a store of
value would apply if the additional money balances in a cheque account were used to buy bonds (earning interest) or shares (earning
dividends).
If a bank finds that a client in need of a loan to expand their business is not creditworthy, the loan cannot be issued. This is because the bank
will have done the necessary risk assessments to determine whether the client is a default risk. Default risk refers to the inability of a client to
repay their loan and that the client does not have enough collateral to secure the debt. Collateral refers to any of the client’s assets that can
be sold to pay off their debt. So, when a bank cannot provide loans to clients who want to spend on investments for their firms (businesses),
this interferes with money creation. Once loans cannot be issued, investment expenditure is reduced – reducing total income and spending
in the economy. See Section 2.6 on pages 38 and 39 of the prescribed book for an explanation of the money creation process.
Question 18
Correct
MENU
Which of the following statements is/are correct about value-added tax (VAT) charged on South African goods and services?
Dashboard
(a) / levied
VAT is only Courses
on a/ few
UNISA / in
goods 2023 / Africa.
South Semester 1 / ECS1601-23-S1 / Online assessments
(b)/ VAT is a selective
Assessment tax and excise
7: Alternative duties and
assessment 1 is only applicable in South Africa.
(c) VAT is a general tax and excise duties.
(d) VAT is levied on most goods and services, and is not only applicable in South Africa.
a, b and c.
d 
b, c and d
b and d
a
VAT is charged on SA goods and services and is levied on most selected goods and services is also application in SA and other countries.
◄ Assessment 1
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Assessment 2 ►
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State Finished
Marks 16.00/20.00
Question 1
Correct

Question 2
Correct
Which one of the following is regarded as a flow variable?
a. Coins and notes

b. Wealth
c. Investment
d. Workers Wages weekly 
Coins and notes form part of money stock or money supply. Money supply is a stock variable. Wealth, and an Investment are stock variables,
thus they are incorrect. Workers wages are measured over a period of time and consequently are a flow variable.
The correct answer is: Workers Wages weekly

Question 3
Correct
MENU
Which of the following are rewards of the factors of production?

a. Rent, labour, natural resources, interest

b. Entrepreneur, firms, capital, labour
c. Profit, labour, land, household
d. Salaries and wages, interest, rent, profit 
Rewards for the factors of production are salaries and wages, interest, rent, and profit.
The correct answer is: Salaries and wages, interest, rent, profit
Question 4
Correct
Which one of the following statements on nationalisation and privatisation is correct?
a. Nationalisation is the transfer of ownership from the public sector to the private sector.
b. Privatisation is the transfer of ownership from private enterprise to government.
c. One of the arguments in favour of privatisation is that the privatised firm may attract direct foreign investment. 
d. Commercialisation the same as privatisation.
It is argued that privatisation will eliminate the shortcomings of nationalisation, such as bureaucracy, a lack of creativity and innovation, and
poor corporate governance. Privatisation with greater accountability, higher levels of productivity, low levels of bureaucracy, higher levels of
creativity and innovation, and good corporate governance will thus attract higher levels of direct foreign investment, which could lead to
higher levels of economic growth and lower levels of unemployment in the economy.
The correct answer is: One of the arguments in favour of privatisation is that the privatised firm may attract direct foreign investment.
Question 5
Correct
MENU
Dashboard
(a) The price /of Courses
the Dollar/ becomes
UNISA /relatively
2023 / lower.
Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
Statement a and b.
demand curve.
Question 6
Incorrect
Your answer is incorrect.

A firm buys Mpho, its sales representative, a new car.
Question 7
Correct
MENU

a. a decrease in net exports will decrease the equilibrium level of income 

b. an increase in the tax rate will increase the size of the multiplier
c. a change in the tax rate has no impact on the size of the multiplier
d. an increase in net exports will decrease the equilibrium level of income
A decrease in net exports will decrease aggregate spending, leading to a fall in the equilibrium level of income. An increase in the tax rate
will decrease the size of the multiplier. An increase in net exports will increase the equilibrium level of income.
The correct answer is: a decrease in net exports will decrease the equilibrium level of income
Question 8
Correct
The introduction of taxes to the Keynesian model…
a. Increases investment spending at each positive level of income.

b. Cause the slope of the consumption curve to become steeper.
c. Flattens the consumption curve. 
d. Causes the consumption function to shift parallel upwards.
e. Causes the consumption function to shift parallel downwards.
When the proportional income tax is introduced to finance part of the government spending, households have to pay a certain portion 𝑡 of
their income in the form of taxes. This reduces their disposable income and therefore also their consumption spending at each level of
income. The consumption (and aggregate) spending curve becomes flatter since a smaller portion of any increase in income is spent on
consumer goods and services
The correct answer is: Flattens the consumption curve.

Information
CASE STUDY 1
MENU
Transition.

Question 9
Incorrect
MENU
22750000
 rand.
Question 10
Correct


Question 11
Incorrect
MENU
(ii) Capital
(iii) Labour

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Question 12
Correct
farm, north of Cape Town. If Shayi is a Malawi citizen, which of the following is correct regarding her contribution to GDP?

Information
CASE STUDY 1
MENU
Transition.

Question 13
Correct
MENU
Answer:
0.13%

Question 14
Correct
In the case study, it is indicated that Germany, together with France, the UK, US and European Union, pledged $ 8.5 billion to help finance
South Africa’s just energy transition. How will this affect the rand/dollar exchange rate on the South African foreign exchange market?
a. the rand will appreciate against the dollar. 

b. the rand will depreciate against the dollar.
c. the demand for dollars will increase.
d. the supply of dollars will decrease.
The supply of dollars in the South African foreign exchange market changes when there is an inflow of dollars into South Africa. This results
in an appreciation of the rand against the dollar. On the other hand, the demand for dollars in the South African foreign exchange market
changes when the rand is exchanged for dollars, leading to a depreciation of the rand against the dollar. Refer to section 4.1 in the
The correct answer is: the rand will appreciate against the dollar.
Question 15
Correct
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Dashboard
will lead to a(/ n)Courses
_____. / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
Question 16
Correct
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)

Information
CASE STUDY 2
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Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct
the tourism and hospitality sectors, leading to the collapse of wine-farming, coastal zone attractions, and loss of the Cape Floral Kingdom. In
such a scenario, which of the following statement/s is/are correct regarding the investment spending in Western Cape?
(a) Investment spending will deteriorate.
(b) Investment spending will improve.

(c) Profits from the hospitality and agriculture sectors will increase.
(d) Investor confidence will be negatively affected.
a. (a), (b), and (c)

b. (c) and (d)
c. (a) and (d) 
d. (a), (c), and (d)
Investment spending refers to the production and purchase of capital goods. There are multiple factors that affect investment spending,
such as the costs of acquiring the capital goods, the expected profits or revenue, as well as the interest rate. The expected devastating
climate change impact on agriculture, tourism, and hospitality sectors will negatively affect investor confidence in those sectors of the
economy, resulting in deteriorating investment spending. See Section 6.5 of the prescribed book.
The correct answer is: (a) and (d)
Question 18
Correct
MENU
The expected devastating impact of climate change on the agriculture, tourism, and hospitality sectors will negatively affect investor
Dashboardin/ those
confidence Courses / UNISA
sectors, / in
resulting 2023 / Semester
a decline 1 / ECS1601-23-S1
in investment / on
spending. Based Online assessments
a simple / and
Keynesian Assessment 6
AD-AS models, a reduction in
investment spending in the Western Cape will ______
(a) increase aggregate demand.

(b) not influence aggregate demand.
(c) result in a rightward shift of the aggregate demand curve.
(d) result in a leftward shift of the aggregate demand curve.
(e) decrease aggregate demand.
a. (a), (b), (c), and (e)

b. (c) and (e)
c. (d) and (e) 
d. (a), (d), and (e)
According to the Keynesian model, a reduction in investment spending will lead to a decrease in aggregate demand at each level of income
and shift the demand curve to the left. See section 6.6 of the prescribed book.
The correct answer is: (d) and (e)
Question 19
Correct
a. a flow variable.

Question 20
Incorrect
MENU
(ii) Capital
(iii) Labour
a. (i), (ii), and (iii) 

b. (ii) and (iii)
c. (i)
d. (i) and (iii)

◄ Assessment 5
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State Finished
Marks 18.00/20.00
Question 1
Correct
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
a. 9.2
b. 12.72
c. 18.6
d. 14.58 

Question 2
Correct
MENU
In the case of demand-pull inflation, an increase in the general price level is accompanied by … in total production. In the case of cost-push
Dashboard
inflation, / Courses
an increase / UNISA
in the general /price
2023 / is
level Semester 1 / ECS1601-23-S1
accompanied / Online assessments / Assessment 4
by…in total production.
a. a decrease; an increase
b. an increase; an increase
c. an increase; a decrease 
d. a decrease; a decrease
Question 3
Correct
a. It has the same weights as CPI.

b. It measures the cost of living.
c. It measures the cost of production. 

Question 4
Correct
MENU
Use the information in the table to answer question:

The inflation rate …
a. decreased by 4,42% from 2018 to 2019.
b. increased by 4,73% from 2018 to 2019. 
c. decreased by 0,18% from 2019 to 2020.
d. increased by 4,73% from 2019 to 2020.

Question 5
Correct
MENU
The question is based on the following diagrams:

Which one of the diagrams above illustrates demand-pull inflation?
a. figure 2
b. figure 3
c. figure 1 
d. figure 4
Question 6
Correct
Which one of the following is the cause of demand-pull inflation?
a. a decrease in interest rates 

b. an increase in the cost of labour
c. the leftward shift of the AD curve
d. a decrease in government spending

Question 7
Correct
MENU
Dashboard / Courses
unemployment rate? / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
a. 9,2%
b. 11,5%
c. 8% 
d. 8,7%
=(20 000) =0,08 or 8%

(250 000)
Question 8
Correct
a. seasonal unemployment
b. structural unemployment
c. frictional unemployment
d. cyclical unemployment 
Question 9
Correct
MENU

a. at the peak.
b. at the trough.
c. between the trough and the peak. 
d. between the peak and the trough.
Question 10
Correct
a. capital widening
b. natural resources
c. imports 
d. government spending
Question 11
Correct
a. a rightward shift of the aggregate demand curve.

b. a leftward shift of the aggregate demand curve.
c. a leftward shift of the aggregate supply curve. 
d. a rightward shift of the aggregate supply curve.
9-2 on page 181.
Question 12
Correct
MENU

a. increase of current GDP per capita.

b. gross domestic product per capita.
d. increase of real GDP over time. 
Question 13
Correct
a. a decrease in the number of people who are laid off

b. an increase in the number of people who are hired
c. a decrease in the number of new entrants in the labour market
d. an increase in the number of people looking for a job 
Question 14
Incorrect
MENU

Amount of Economic Activity (Nominal): Gross GDP per capita
Domestic Production
2019 2020 2019 2020
14,3 trillion 14,7 trillion 70 Million 73 Million
Answer:
5.56

Question 15
Correct
Answer: 31 000 000 

Question 16
Correct
MENU
If workers in clothing shops are retrenched because of a recession, what do you call this type of unemployment?
b. seasonal unemployment
c. cyclical unemployment 
Cyclical unemployment occurs when there is a recession in the economy which leads to unemployment. Therefore, if workers are retrenched
because of a recession, it is called cyclical unemployment. See section 11.1 of the textbook.
Question 17
Incorrect
2019 2020 2019 2020
14,3 trillion 14,7 trillion 1,4 Billion 1,43 Billion
Answer:
4.73

Question 18
Correct
MENU
Dashboard
in the private/ sector.
Courses
How/ many
UNISA / 2023
people / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
are unemployed?
Answer: 12 000 000 
Question 19
Correct
Answer:
28.33%

Question 20
Correct
a. the expansion phase.

b. the trough phase.
c. the recovery phase.
d. the peak phase. 
◄ Assessment 3
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Assessment 5 ►
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MENU 

State Finished
Marks 18.00/20.00
Question 1
Incorrect


Answer:
95 000 000 000


Question 2
Correct
Suppose that the economy is open and has a public sector. In the Keynesian model, we can say that …
a. an increase in the tax rate will increase the multiplier and raise aggregate expenditure
b. a fall in the marginal propensity of imports will raise the multiplier and aggregate expenditure will rise 
c. a fall in autonomous consumption will raise the multiplier and decrease aggregate expenditure
d. a fall in autonomous imports will raise the multiplier and aggregate expenditure will rise.
The factors that impact the multiplier are discussed in section 7.3. of the prescribed textbook
Question 3
Correct
MENU

Answer:
900 000 000 000


Question 4
Correct
MENU
Dashboard
and / Courses
R50 billion / UNISA
a. R365 billion
b. R167.5 billion
c. R150 billion
Question 5
Correct
MENU

Marginal propensity to save 1/

4
What is the multiplier?
Answer:
4

Question 6
Correct
MENU
Which of the following statements about the investment decision is correct?

a. For an investment to be profitable, the interest rate on a loan has to exceed the expected return on new machinery for a firm.
b. Changes in the interest rate affect the decision to buy capital goods and financial assets. 
c. Acquiring new machinery and equipment for a firm is a low-risk investment because the interest rate is the only factor to consider
when buying these capital goods.
d. When an expansionary monetary policy is applied, the opportunity cost of buying capital goods is higher than that of buying financial
assets.
Yes, changes in the interest rate affect the decision to invest in capital goods and financial assets. Interest rates affect the return on
investment and the opportunity costs of buying either capital goods or financial assets. When interest rates are higher, the return on
financial assets is higher, making it less profitable to invest in capital goods. Higher interest rates increase the cost of financing new
machinery and equipment for firms. Higher financing costs reduce the return on capital goods, thereby reducing profits and return on
investment. Likewise, when interest rates are lower, the returns on financial assets are lower, making it more profitable to buy capital goods.
Lower interest rates decrease the cost of financing new machinery and equipment. Lower financing costs increase the return on capital
goods, thereby increasing profits and return on investment.
An expansionary monetary policy refers to reducing interest rates and increasing investment expenditure to increase the level of aggregate
spending and income in the economy. Therefore, the opportunity cost of buying capital goods is lower because it will be cheaper for firms
to fund their investments at lower financing costs. However, when interest rates are lower, the return on financial assets such as fixed
deposits and interest-bearing savings accounts will be lower. This makes investing in these financial assets less attractive.
The expected return on new machinery for a firm has to exceed the interest rate on a loan in order for the investment to be profitable. This is
because investors need to be compensated for the risk they take when buying new machinery. When the expected return on capital goods is
higher than the interest rate, it is relatively cheaper to finance the investment. This means that the expected cash inflows from the new
machinery will repay the debt and leave behind a net profit and net positive return on investment.
When new machinery and equipment are bought to produce goods and services more efficiently, the interest rate is not the only factor to
consider. Capital goods need to be insured against theft, damages and loss. Machinery and equipment also need maintenance, repairs and
service to operate efficiently. Also, the firm needs to have workers that can operate the machinery, so training costs are involved. All these
additional costs make it riskier to invest in capital goods. These costs are factored into a firm’s operating expenses and, ultimately, its profits
and return on investment.
Question 7
Incorrect
MENU
Y = 10 000
S = -250 + 0.65Y
I = 500
G = 1 100
m=0,13


b. (ii) and (iv) are correct. 
c. (i), (ii) and (iv) are correct.
Question 8
Correct
MENU

Based on the information in the table, increasing the repo rate by 25 basis points will lead to ________
[1] an increase in aggregate demand.
[2] a reduction in market interest rate.

[3] a reduction in consumer spending.
[4] a decrease in aggregate demand.
a. [1],[2],[3] and [4]
b. [2] and [4]
c. [3] and [4] 
d. [1] and [3]

The decision taken by the South African Reserve Bank to increase the repo rate by 25 basis points will increase the interest rate (prime rate)
which commercial banks use to borrow consumers. This will result in a consumer spending reduction and dampen the aggregate demand in
the economy. See section 9.2 in the prescribed book.
Question 9
Correct
Select one:
Question 10
Correct
MENU
Use the figure below to answer the question:

The movement from A to A' can result from…
Select one:
a. a decrease in government spending
b. an increase in government spending
c. an increase in taxes 
d. a decrease in taxes
Question 11
Correct
written as…
Select one:
a. A=C+I+G. 
b. A=C+I+G+X+Z.
c. A=C+I.
d. A=C+I+G+X-Z.
Question 12
Correct
MENU
Select one:
Question 13
Correct
The question is based on the following diagram:
Which one of the following factors could have caused the shift in the curve from AD0 to AD1, ceteris paribus?
Select one:
a. an increase in taxes
b. A decrease in the government spending
c. a reduction in imports. 
d. an increase in total production.

Question 14
Correct
MENU
Which one of the following chain of events best represents the monetary transmission mechanism?
Select one:
a. ∆i→∆I→∆A→∆AS→∆Y
b. ∆i→∆I→∆A→∆AD→∆Y 
c. ∆P→∆i→∆A→∆Y
d. ∆G→∆A→∆Y
Question 15
Correct
Select one:
a. increase in aggregate demand
d. decrease in aggregate demand 
Question 16
Correct
Select one:
Question 17
Correct
MENU
Select one:
Question 18
Correct
Select one:
a. figures 1 and 2
b. figure 1 
c. figures 2 and 4
d. figure 3
Information
MENU

Question 19
Correct
MENU
[2] taxes

a. [3] and [4]
b. 
[1]
c. [2] and [3]
d.
[1], [3] and [4]
Question 20
Correct
The aggregate autonomous expenditure after the introduction of government spending is R…
Answer:
60 000 000

◄ Assessment 2
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Assessment 4 ►
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State Finished
Marks 17.00/20.00
Question 1
Incorrect
Suppose that Sandile, a South African trader, imports goods from China and sells them in South Africa. Suppose also that the Rand
appreciates against the Yuan. How would this impact Sandile’s business?
a. The demand for Chinese goods by Sandile’s business will decrease because imports from China become more expensive when the
Rand appreciates.
b. The demand for Chinese goods by Sandile’s business will decrease because imports from China become more expensive when the
Yuan depreciates.
c. The price of goods that Sandile’s business imports will decrease in terms of the Yuan. 
d. The price of goods that Sandile’s business imports will decrease in terms of the Rand.
The price of goods that Sandile’s business imports will decrease in terms of rand.
Question 2
Correct
Suppose that the price of Brent Crude oil rises, which is a critical import in South Africa. At the same time, there is an increase in the number
of American tourists coming to South Africa. What would be the impact on the US Dollar/Rand exchange rate?
a. The Rand will appreciate against the Dollar and the quantity of Dollars will increase.
b. The Rand will depreciate against the Dollar and the quantity of Dollars will decrease.
c. The effect on the Rand is indeterminate and the quantity of Dollars will rise. 
d. The Rand will depreciate against the Dollar and the quantity of Dollars will rise.
Brent Crude oil is a critical input in the production process and consequently the increase in the price of the good will raise the demand for
US Dollars in the South African market ceteris paribus. The increase in the number of American tourists coming to South Africa will increase
the supply in the US Dollar. Consequently, the supply and demand curves will both shift to the right. As a consequence, the quantity of US
Dollars in the market will rise, but there is no determined impact in the exchange rate. See Section 4.3 of the prescribed book.
Question 3
Correct
MENU
Suppose that the Euro/US Dollar exchange rate changes from 1,3 Euro per Dollar to 1,1 Euros per Dollar. Then
a. the euro has appreciated against the dollar. 
b. the dollar has strengthened against the euro.
c. the euro has weakened against the dollar.
d. the dollar has appreciated against the euro.
e. the price of the dollar has become expensive in terms of the euro.
Before the change in the exchange rate between the Euro and the Dollar, 1,3 Euro was required to exchange for 1 Dollar. After the change in
the exchange lessens, only 1,1 Euros is required to exchange for 1 Dollar. The Euro has, therefore, gained in strength and appreciated against
the dollar. Refer to pages 71 –76 of the prescribed textbook, as well as Figures 4-3 and Tables 4-1 and 4-2.
Question 4
Correct
Mediclinic Medforum, a private hospital in Pretoria, needs to import 10 ultrasound machines from the United States (US) at a total value of
US$415 000. However, the South African government will only allow the hospital to import five machines. Which trade policy measure is
being implemented here?
a. import tariff
b. import quota 
c. exchange control
d. local content requirements
An import tariff is a tax levied on imported goods and services. This tax increases the total value of goods and services imported, making it
relatively expensive for local consumers to pay for items from abroad. An import tariff not only generates tax revenue for government but is
also a way of protecting local firms from foreign competition. The government can use the tax revenues collected from import tariffs to
develop local manufacturing firms to reduce imports.
An import quota is a limit imposed by the government on the quantity of goods that can be bought from foreign countries. A limit on the
amount of goods imported increases their price, which will reduce the quantity of foreign products demanded. A quota also places a limit on
the monetary value of goods that are imported from foreign countries. This is to encourage the production of goods locally in order to
protect local industries from foreign competition.
An exchange control is used to limit the amount of goods and services imported by restricting the amount of foreign exchange available to
pay for them. The purpose of exchange controls is to stabilise the exchange rate and balance of payments by limiting inflows and outflows
of foreign currency in a country.
Local content requirements are a trade policy that requires local firms to make use of domestically manufactured goods and local suppliers
in production. This is to protect local industries against foreign competitors and to protect jobs in the domestic economy. For example, the
government may decide that ultrasound equipment for medical doctors should be produced by local factories. This means that hospitals
such as Mediclinic Medforum can buy ultrasound machinery locally. Local factories will then be able to create jobs within the country and
protect local factories from competing manufacturers in the US.
Question 5
Correct
MENU
isDashboard
invested in/Germany,
Courses France
/ UNISA
and /the2023 / Kingdom.
United Semester 1If the
/ ECS1601-23-S1 / Online
Rand/Dollar exchange rateassessments / Assessment
is R16,59/US$1, 2 has John increased
by how much
a. US$6 027,73
b. US$1 506,93 
c. US$4 520,80
d. US$414 750
Question 6
Correct
MENU

a. a and d
b. b and c
c. a, b, c and d 
d. a, b and c
Question 7
Correct
MENU

Which country has a relative advantage in the production of drones?
a. Russia has to give up less petrol to produce one drone than Ukraine. 
b. Russia must give up any of the items in order to have the relative advantage.
c. Russia has to give up more petrol to produce one drone than Ukraine.
d.
Ukraine has to give up less petrol to produce one drone than Russia.
Russia has to give up less petrol to produce one drone than Ukraine. Therefore, the opportunity cost of producing drones in Russia is lower
than that of Ukraine. This gives Russia a comparative advantage in the production of drones. Refer to pages 65-68 of the prescribed book,
page 61 in Part 1 of the study guide, and pages 44-45 in Part 2 of the study guide.
Question 8
Correct
economy and that of other countries?
Question 9
Correct
MENU
c. A firm buys Mpho, its sales representative, a new car. 
e. Anne, a civil pensioner, receives her monthly pension from the government.
Question 10
Correct
MENU

Which of the following statements about the figure above are correct?
(a) Zimbabwe has the lowest Gini coefficient of the four countries.
(b) South Africa is the most unequal society based on the Lorenz Curve.
(c) Inequality is greater in the United Kingdom (UK) than in the United States (US).
(d) The Lorenz Curve and Gini coefficients measure inequality from a multidimensional perspective.
a. a, b, c and d
b. a and c
c. only b 
d. only d
The degree of income and wealth inequality is measured by the area between the line of perfect equality (the diagonal) and the Lorenz
Curve for a given country. Therefore, the further the Lorenz Curve for a given country is from the line of perfect equality, the higher its Gini
coefficient and the greater its degree of inequality. Therefore, Zimbabwe is the second furthest economy from the line of perfect equality.
This means that it has the second highest Gini coefficient, making it the second most unequal society of the four countries.
South Africa is indeed not only the most unequal economy of the four countries but also the most unequal economy in the world based on
the Gini coefficient. Of the four countries, it is the furthest from the line of perfect equality and has the highest Gini coefficient.
The Lorenz Curve for the UK is closer to the line of perfect equality than that of the US. Therefore, inequality is lower in the UK than in the
US. Note that the Lorenz Curve for the US is further from the line of perfect equality. This means that the Gini coefficient of the US is higher
than that of the UK.
The Gini coefficient and Lorenz Curve measure inequality only in terms of income and wealth. This reveals the limitation of these measures
because they do not include other factors that affect economic participation. When measuring inequality from a multidimensional
perspective, it would be measured in terms of access to education, healthcare, housing, water and sanitation.
Question 11
Correct
MENU
Which of the following statements is correct about the basic assumption of the Keynesian macroeconomic model of the economy excluding
foreign and government sectors?
a.
The economy comprises the foreign sector.
b. The economy comprises the government sector.
c. The economy excludes the government sector but includes the foreign sector.
d. Households and firms form part of the model. 
Question 12
Correct
What will be the level of induced consumption if the marginal propensity to consume is 0.55 while the level of income (Y) is 500?
a. 250
b. 520
c. 275 
d. 370
Induced consumption = cY
Thus, if c = 0.55 and Y = 500
cY = 0.55 × 500 = 275
Question 13
Correct
MENU


a. only a
b. a and b
c. only c
d. b and d 
Question 14
Correct
MENU


production).
Question 15
Correct
MENU
When the marginal propensity to consume is 0,75 what will the multiplier be?
a. 1
b. 4 
c. 0,25
d. 1,75
The multiplier (α) is calculated as follows:

Q14
Question 16
Correct
Use a Keynesian model (without a government and foreign sector) to calculate the answer for the question:

Investment= R20 million
If the marginal propensity to save increases by 0,10, what will the equilibrium level of income be?
a. R45 million
b. R55 million
c. R65 million
d. R70 million 
e. R80 million
If the marginal propensity to save increases by 0,1, it means that the marginal propensity to consume decreases by 0,1, thus from 0,6 to 0,5.
The formula for the multiplier is: α =1/([1-c]) . Substitute this information into the equation: α =1/([1-0.5]) meaning that the value of the
multiplier is 2. To determine the equilibrium income level, Y0: Y0 = α (A ̅), meaning that the equilibrium level of income Y0 = 2 (R35 million)
= R70 million.
Question 17
Correct
MENU
Q6
Question 18
Correct
MENU
Which of the following statements about investment spending is/are correct?

a) A higher real interest rate results in less investment spending.
b) When the economy moves into a recession, many firms will postpone buying investment goods even if the demand for their own product
is strong.
c) The optimism or pessimism of business firms is an important determinant of investment spending.
a. a
b. a and b
c. a and c
d. b and c
e. All the statements are correct. 
When the interest rate is higher, it becomes expensive to finance investments and consequently investment spending is lower. When the
economy moves into a recession firms will postpone investment goods as they will dissave from their existing inventories to meet demand.
The expectations of the firms are critical in the making investment decisions as it will inform the value of the investment and whether they
should invest in capital goods or financial assets. Thus, all the statements are correct. See section 8.2.
Question 19
Correct
The value of the multiplier increases if the_______ increases.
a. tax rate
b. marginal propensity to save
c. marginal propensity to consume 
d. investment spending
When the marginal propensity to consume increases, it means that a larger part of an increase in income is spent on consumption, leading
to a larger second round increase in spending and also on income – a process that will continue until equilibrium is reached again.
When the tax rate increases, it means that a smaller part of an increase in income can be consumed, and thus decreasing the multiplier effect
of an increase in income. When the marginal propensity to save increases, it means that a smaller part of an increase in income will be
consumed, and thus decreasing the multiplier effect of an increase in income. Investment spending forms part of autonomous spending and
will therefore not affect the size of the multiplier.
Question 20
Correct
MENU
b. households will consume R80 if their disposable income is zero and will consume 0,75 of any increase in disposable income they 
receive.
d. households earn R80 and spend three quarters of their income.
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Assessment 3 ►
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State Finished
Completed on Thursday, 16 March 2023, 11:50 AM
Marks 16.00/18.00
Question 1
Correct
What is the correct definition of the opportunity cost of a choice?
a. the value to the decision-maker of the alternative that could have been chosen.
b. the monetary value to the decision-maker of the choice made.
c. the monetary value of the best alternative that was chosen instead of the alternative.
d. the cost of the alternative. 
e. the opportunity to make a different choice.
Every time a choice is made, opportunity cost is incurred; and economists always measure cost in terms of opportunity cost. The cost of
using a resource is measured by determining how it could have been used alternatively, not necessarily what it cost to purchase. See page 2
of the prescribed book.
Question 2
Correct
MENU
Which of the following statements is correct about opportunity cost?

(i) Opportunity cost is a consequence of abundance.
(ii) When Karabo decides to watch Netflix all day instead of studying, his opportunity cost is the improvement of his marks in
Economics that he could get from studying more.
(iii) Opportunity cost is only measured in terms of money.
(iv) Not all economic choices have an opportunity cost.
a. 
ii) is correct.
c.
(i), (iii) and (iv) are correct.
Opportunity cost is a result of scarcity, where limited resources are available and wants are infinite. The opportunity cost is the highest
foregone valued alternative for an economic activity. Consequently, there is an opportunity cost (or trade-off) to all economic activities. See
Question 3
Correct
Spending on goods produced in the _____ is a/an ______ into the circular flow of goods and services in the domestic economy.
(i) domestic economy; leakage

(ii) foreign sector; Leakage
(iii) foreign sector; injection
(iv) domestic economy; injection
a. Only (ii) is correct.

b. (ii) and (iv) are correct. 
c. Only (iv) is correct.
d. (ii) and (iii) are correct.

Question 4
Correct
MENU
Dashboard / Courses /(PwC),
PricewaterhouseCoopers UNISA / 2023 services
a financial / Semester 1 / At
company. ECS1601-23-S1 / Online
her workstation, she willassessments
be using the /Apple
Assessment
MacBook1 Air 13-inch laptop
with a high-resolution screen display. The degree and experience she is bringing to the company are considered a __________, while the
a. entrepreneurship; technology
b. capital; entrepreneurship
c. human capital; labour
d. human capital; capital 
Information
Monthly Salaries - 2020 Monthly Salaries - 2021
years.
Question 5
Correct
MENU
Calculate the executives’ monthly salary percentage share for 2020 salaries. Type in your answer
30.61

Question 6
Correct
a. The stock of money consists of notes and coins.

b. In a monetary economy, there always has to be a double coincidence of wants.
c. Money can never lose its usefulness as a unit of account.
d. Money is always the best possible store of value.
e. Money is not the only possible store of value. 
Question 7
Correct
Which of the following statements are correct about trade of goods and services?
a. The use of money eliminates the need for a double coincidence of wants associated with a barter economy.
b. An economy in which goods are traded with money is called a barter economy.
c. Money consists of notes only.
a. a. 
b. a and c.
c. All the statements are correct.
d. a and b.
the use of money eliminates the need for a double coincidence of wants under barter economy where goods were exchanged with other
goods
Question 8
Correct
MENU

a. Anyone who wishes to enter into transactions in a monetary economy has to hold money as a store of value.
b. The quantity of money demanded for speculative purposes is positively related to the interest rate.
c. The quantity of money demanded for transaction purposes depends on the interest rate.
d. The demand for money as an asset is also called the transactions demand for money.
e. The quantity of money demanded for speculative purposes is inversely related to the interest rate. 
The opportunity cost of holding money is the interest that is foregone by not holding bonds. This is because interest is earned on bonds,
while little or no interest is earned by holding money. It follows, therefore, that the quantity of money demanded for speculative purposes
will be low when the interest rate is high (because then the opportunity cost of money is also high). Likewise, the quantity of money
demanded for speculative purposes will be higher when the interest rate (and therefore the opportunity cost of money) is low. There is thus
a negative (or inverse) relationship between the quantity of money demanded for speculative purposes and the level of the interest rate. See
page 33 and Figure 2-2 (b) in the prescribed book.
Question 9
Correct
Which of the following statements is correct about the primary objective of the SARB?
a. SARB does not need to consult the cabinet member responsible for national financial matters since it performs it functions
independently.
b. SARB’s objective is to sell government security to commercial banks.
c. SARB’s objective is to make use of the repo rate to influence economic activities.
d. SARB protects the value of the currency in the interest of balanced and sustainable economic growth in the Republic. 
SARB protects the value of the currency in the interest of balanced and sustainable economic growth in the Republic.
Question 10
Correct
MENU
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
DashboardWhich
essentials. / Courses / UNISA statements
of the following / 2023 / isSemester 1 credit
true about / ECS1601-23-S1
card use? / Online assessments / Assessment 1
a. Credit cards are not seen as money.

b. Credit cards are a means to facilitate payment and cannot be regarded as money. 
c. Credit cards and electronic money are forms of money, as they can be used as means of payment.
d. Credit cards are money because they function as a medium of exchange.
credit card is a means to facilitate payment and cannot be regarded as money.
Question 11
Incorrect
a. The amount of short- and medium-term deposits decreased by 57.85%.
b. The amount of long-term deposits rose by 4.65%. 
c.
The amount of coins and notes in circulation decreased in 2021.
d. The amount of long-term deposits increased by 22.81%.


Question 12
Incorrect
MENU
The SARB has decreased interest rates to ease financial pressures on households and firms during the harsh times for the economy in 2020.
Dashboard
In the money/ market,
Coursesthe/ amount
UNISA of
/ money
2023 /that
Semester 1 / to
people wish ECS1601-23-S1
hold for / Online assessments / Assessment 1
(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.
a. (i) and (ii) are correct

b. Only (i) is correct 
c. (i), (ii) and (iii) are correct
d. (ii) and (iii) are correct
e. Only (ii) is correct
Question 13
Correct
MENU
In 2022, Stats SA has reported that South Africa’s gross domestic product (GDP) decreased as a result of ESKOM power cuts or load-
Dashboard
shedding, / Courses
which led to a /decline
UNISAin /economic
2023 / activities
Semesteracross
1 / ECS1601-23-S1 / This
several industries. Online assessments
negatively / the
affected Assessment 1
remuneration of the factors of
production and income of the businesses. In the money market, this would be illustrated by which diagram?
a.
[1] and [2]
b. [3] and [4] 
c.
[2] and [4]
d. [1] and [3]
Question 14
MENU
Correct

___________________ financing.
a. decreases; deflationary
b. increases; direct
c. increases; deflationary
d. increases; inflationary 
e. decreases; inflationary
Question 15
Correct
a. proportional, because the VAT rate is constant across goods that attract VAT.
b. regressive, because the VAT burden increases as household income rises.
c. progressive, because the consumption expenditure of the rich is greater than that of the poor.
d. regressive, because low-income households spend a greater proportion of their income on goods that attract VAT. 
e. progressive, because most goods consumed by poor households are zero rated.
Question 16
Correct
MENU

a. Only (i) is correct

b. Only (ii) is correct
e. (ii) and (iii) are correct 

Question 17
Correct
MENU

2019 Mid-year population estimates by province Statistics South Africa (2019)
Over the years, South Africa has seen an increase in migration from less economically developed areas of the country to metropolitan areas
of three provinces, namely Gauteng, KwaZulu-Natal (KZN), and the Western Cape. These are centres with high level of economic activity that
attract migrants in search of better work opportunities and living standards. Based on the information above, which of the following
statements is correct?
(a) The high level of economic activity and migrants in Gauteng province would increase government spending on capital formation.
(b) Population growth in the metropolitan areas of South Africa increases the demand for public goods and services by households.
(c) Fiscal policy is not required to address the concentration of economic activity and population growth in the metropolitan areas of the
three provinces.
a. only c
b. b and c
c. a and b 
d. only a
Capital formation refers to spending on buildings and machinery and equipment to stimulate economic activity. It can also include spending
on human capital, which refers to the workers and skills available to participate in the economy. Therefore, the high level of economic
activity would require an expansionary fiscal policy, which entails an increase in government spending to develop infrastructure (roads,
bridges, railways, street lights, water, and electricity systems) and human capital (education, training, and skills development).
As more people settle in Gauteng for work, it increases the demand for land, buildings, proper roads, water, electricity, and basic public
services. This requires more government spending, using tax revenues collected from the public. When the population in metropolitan areas
increases, it increases the demand for public goods and services by households. This is because when more people live in an area, it
increases the consumption of water, electricity (including street lights), land for residential and business purposes, roads, public transport,
and refuse removal services by local municipalities.
Migration from less developed areas to metropolitan areas is one of the factors that contribute to increasing inequality in South Africa. This
is because skilled workers, entrepreneurs, resources, and wealth move to areas with better economic opportunities. People are more likely to
permanently settle in areas that provide better service delivery and living conditions. This makes inequality worse because less economically
developed areas lose the human and other resources needed to promote development and wealth creation in poorer areas. Therefore,
expansionary fiscal policy is required to bridge the gap between the rich and the poor. This includes increasing government spending on
road infrastructure connecting less developed areas to highly developed areas. Connective infrastructure is intended to promote equitable
distribution of income, wealth, and human resources.
Question 18
Correct
MENU
Dashboard
2022, / Courses
her salary increased/ toUNISA / a2023
R35 000 / Semester
month 1 / anECS1601-23-S1
and she paid / 600.
income tax of R3 Online assessments
Income tax paid /byAssessment
Ayanda is an1 example of a … tax.
a. progressive 
b. proportional
c. regressive
d. general
Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
a. SARB protects the value of the currency in the interest of balanced and sustainable economic growth in the Republic. 
b. SARB does not need to consult the cabinet member responsible for national financial matters since it performs it functions
independently.
c. SARB’s objective is to sell government security to commercial banks.
d. SARB’s objective is to make use of the repo rate to influence economic activities.
The correct answer is: SARB protects the value of the currency in the interest of balanced and sustainable economic growth in the Republic.
Question 2
Correct
a. unlimited wants; limited 

b. limited wants; limited
c. unlimited wants; unlimited
d. limited wants; unlimited
The correct answer is: unlimited wants; limited

Question 3
Correct
MENU
If the Governor of the SARB wanted to stimulate economic activity by using monetary policy, he/she should…..
a. increase the interest rate.

b. leave the interest rate unchanged.
c. decrease the interest rate. 
d. wait for a decrease in taxation.
The decrease in the interest rate will be implemented by the Governor to stimulate economic activities.
The correct answer is: decrease the interest rate.
Question 4
Correct
Which of the following statements is/are correct criteria of the good tax?
a. Good taxation should have more possible effects of distorting relative prices.
b. It is regarded as good tax if various taxpayers with different incomes are taxed the same.
c. It is regarded as good tax if the tax burden is spread fairly among various taxpayers.
d. Administrative simplicity in the tax system ensures neutrality and equality.
a. a, b, c and d
b. a, b and d
c. c and d. 
d. b, c and d
Only statements c and d are correct about criteria for good taxes.
The correct answer is: c and d.

Question 5
Correct
MENU
a. economic growth.
d.
colonisation


globalisation
Question 6
Correct
If a certain newspaper reports that “the construction sector was responsible for 1.8% of the GDP growth (for a specific period),this implies
that the GDP has been measured according to...method.
a. expenditure 
b. production
c. income
d. nominal prices
The three approaches to calculate the GDP, namely (i) the production method(which measures the value added by all the participants in the
economy.(ii)the income approach(which measures the income received by different factors of production) and (iii) the expenditure approach
(which measures the spending on final goods and services by the different participants in the economy). With regards to the expenditure
approach, the spending of the four major sectors of the economy(namely households, firms, the government, and the foreign sector) are
added together to calculate the GDP. Thus, according to the expenditure method, GDP is calculated as follows: Consumption spending by
households(C) plus expenditure on exports(X) minus expenditure on imports(Z).The equation is: GDP=C+I+G+X-Z. Thus, when the
newspaper reports that the construction sector is responsible for 1,8% of the GDP for specific period, this will be categorized as investment
spending(gross capital formation) by firms(I) , which is a component of aggregate spending on GDP according to the expenditure
method.See pages 84 to 94 in the prescribed book.

expenditure
Question 7
Incorrect
MENU
Suppose sanctions are imposed on a small open economy which leads to a decrease in autonomous imports. What will happen to the
Dashboardexpenditure
aggregate / Coursescurve
/ UNISA / 2023
if exports / Semester
remain 1 / ECS1601-23-S1 / Online assessments / Assessment 6
unchanged?
a. It will stay the same.

b. It will shift upwards.
c. It will shift downwards.
d. The slope becomes flatter 
If imposed sanctions would imply that there will be less autonomous imports (Z) into the country, this will increase net exports (X-Z) at every
income level, and therefore aggregate spending will increase at every income level. This will be illustrated by a parallel upward shift of the
aggregate expenditure curve. If imposed sanctions would imply that there will be less autonomous imports (Z) into the country, this will
increase net exports (X-Z) at every income level, and therefore aggregate spending will increase at every income level. This will be illustrated
by a parallel upward shift of the aggregate expenditure curve.
The correct answer is: It will shift upwards.
Question 8
Correct
If the government increases its expenditure, but keeps the tax rate constant, we will find that consumption expenditure______, total tax
revenue_____, and investment spending______.
a. stays the same, stays the same, stays the same

b. increases, stays the same, stays the same
c. increases, increases, stays the same 
d. increases, increases, increases
Remember that our frame of reference is the simple Keynesian model. An increase in G leads to an increase in income (Y) as the increase in
expenditure has to be received by some factors of production as income. The increase in income will result in an increase in induced
consumption and also an increase in the amount of tax that has to be paid by the receivers of the higher income. Investment spending,
however, is autonomous and does not depend on the income level and will therefore not be affected. Therefore, the sentence should read as
follows: “If the government increases its expenditure, but keeps the tax rate constant, we find that consumption expenditure increases, total
tax revenue increases, and investment spending stays the same.
The correct answer is: increases, increases, stays the same
Information
CASE STUDY 1
MENU
Transition.

Question 9
Correct
MENU
227500000
 rand.
Question 10
Correct


Question 11
Correct
MENU

Question 12
Correct
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)

Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct


Question 15
Correct
MENU
a. withdrawal from the circular flow of income and spending in the economy of South Africa
b. addition into the circular flow of the income and spending in the economy of Germany
d. injection to the circular flow of income and spending in the economy of South Africa. 
The correct answer is: injection to the circular flow of income and spending in the economy of South Africa.
Question 16
Correct
"The expansion of the infrastructure is necessary to serve the continent. We would definitely require support in that context to expand the
infrastructure. So, if we need to take 100 or more students (on a long course) at one go, we can do that." In terms of the AD-AS framework,
the planned expansion of infrastructure will____________
a. Shift the AD-curve to the right. 

b. Shift the AS-curve to the left.
c. Cause a movement along the AD-curve.
d. Cause a downward movement along the AS-curve.
The planned expansion of infrastructure in the AD-AS framework will shift the AD-curve indicating an increase in spending, which is a
component of aggregate demand (AD). Refer to section 9.1 of the textbook.
The correct answer is: Shift the AD-curve to the right.

Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct
a. Point a
b. Point b 
c. Points a and c
d. Point c
Question 18
Correct
MENU
Dashboardin/ those
confidence Courses / UNISA
sectors, / in
resulting 2023 / Semester
a decline 1 / ECS1601-23-S1
in investment / on
spending. Based Online assessments
a simple / and
Keynesian Assessment 6
AD-AS models, a reduction in

a. (a), (b), (c), and (e)

b. (c) and (e)
c. (d) and (e) 
d. (a), (d), and (e)
Question 19
Correct
What type of unemployment will be exacerbated?


b. (ii) and (iii)
c. (iv) 
d. (i) and (iii)
e. (v)

Question 20
Correct
MENU
Dashboard
workers / farming
in the Coursesand
/ UNISA
tourism/sectors,
2023 /resulting
Semester
in a120%
/ ECS1601-23-S1
unemployment /rate
Online
in theassessments / Assessment
province. Based 6 statement, a 20%
on the above
a. a flow variable.
◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
Cost-push inflation can be caused by …
a. a decrease in the cost of imported capital and intermediate goods.

b. an increase in profit margins, a decrease in productivity and the impact of natural disasters. 
c. an increase in investment spending and government spending.
d. a decrease in wages and salaries.
Question 2
Correct
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. buy government bonds.
c. increase the quantity of money.
d. lower the interest rate level.

Question 3
Correct
MENU

b. interest rates; leftward shift of the aggregate demand curve
c. productivity; rightward shift of the aggregate supply curve 
Question 4
Correct
a. An increase in interest rates

b. Measures to decrease the productivity of labour 
c. A decrease in government spending
d. An increase in taxes
Question 5
Correct
employment.
a. demand-pull; decreases
b. demand-pull; increases 
c. cost-push; increases
d. cost push; decreases

Question 6
Correct
MENU
a. Discourages exports.
b. Increases the costs of imported goods. 
c. Increases the costs of exports.
d. Discourages savings.
Question 7
Correct
a. a rightward shift of the aggregate supply curve.

b. a leftward shift of the aggregate supply curve. 
c. a rightward shift of the aggregate demand curve.
d. a leftward shift of the aggregate demand curve.
9-2 on page 181.
Question 8
Correct
a. peak
b. downswing
c. trough 
d. upswing

Question 9
Correct
MENU
a. a rapid increase in population growth.

b. an increase in the cost of employing labour.
c. an increase in immigration.
d. an increase in labour intensity of production. 
unemployment
Question 10
Correct
a. a decrease in unemployment rate; an increase inflation rate. 

b. an increase in unemployment rate; a decrease in inflation rate.
c. an increase in unemployment rate; a decrease in inflation rate.
d. a decrease in unemployment rate; a decrease in inflation rate.
higher inflation.
Question 11
Correct
a. upswing
b. recession
c. trough 
d. downswing
Question 12
Correct
MENU
Which of the following statements regarding economic growth is correct?

a. Real GDP is obtained by adjusting GDP at current prices for inflation. 

b. GDP is an accurate indicator of economic welfare.
c. GDP per capita is calculated by multiplying nominal GDP by the population size.
d. If nominal GDP in Swaziland increased by 5% between 2015 and 2016, it can be said that the country has undoubtedly experienced
economic growth during this period.
GDP is first measured at current prices. To measure economic growth, we use GDP at constant prices (or real GDP). Therefore, GDP at current
prices (or nominal GDP) must be transformed to GDP at constant prices (or real GDP). This is done to eliminate the effects of inflation.
Question 13
Correct
a. a downward movement along the Phillips curve.

b. an upward movement along the Phillips curve. 
c. a rightward shift of the Phillips curve.
d. a leftward shift of the Phillips curve.
Question 14
Correct
Answer:
25 000 000

Question 15
Correct
MENU

2019 2020 2019 2020
448 billion 432 billion 21 million 26 million
Answer:
-3.57%

Question 16
Correct
Which of the following is the cost of unemployment?

(a) tends to give rise to crime
(b) a decrease in tax revenue
(c) an increase in government spending
a. a), (b) and (c) 

b. only (a) is correct
c. a) and (b) are correct
d. b) and (c) are correct
All the statements are the cost of unemployment. See page 401 of your textbook. See section 11.1 of the textbook.
Question 17
Correct
MENU
Dashboard
Courses / isUNISA
What / 2023 / Semester
the unemployment rate? 1 / ECS1601-23-S1 / Online assessments / Assessment 4
Answer:
48%

Question 18
Incorrect

2019 2020 2019 2020
Answer:
4.45

Question 19
Incorrect
MENU
a. The nominal GDP increased by 10%, while the price level increased by 12% and there was no increase in the population.
b. The nominal GDP increased by 6%, while the price level increased by 6% and the population increased by 1%. 
c. The increase in the real GDP of 10% is distributed evenly amongst the population of a country, which grew by 1%.
d. The real GDP increased mainly due to an increase in defence expenditure.
Question 20
Correct
Suppose Botswana’s population comprise 8 000 000 people who are unemployed, 3 000 000 students, 7 000 000 home-makers, 2 000 000
not economically active, 13 000 000 employed, and 35 000 000 people who are not in the age category 15 to 65 years. What does
Botswana’s labour force population equal?
Answer: 21 000 000 
Refer to learning unit 11 and chapter 11 in the prescribed textbook.
◄ Assessment 3
Jump to...
Assessment 5 ►
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State Finished
Marks 19.00/20.00
Question 1
Correct
and R50 billion respectively. Autonomous exports are R100 billion and autonomous imports are R35 billion. Also, c = 0,85; t = 0,275 and m =
b. R167.5 billion
c. R365 billion
d. R150 billion
Question 2
Correct
MENU

Answer:
2.5

Question 3
Correct
The interest rate influences the investment decision through the ...
(a) yield on capital goods.
(b) opportunity cost of investment.

(c) money supply.
(d) demand for money.
a. (c) and (d)

b. only (a)
c. (a) and (b) 
d. only (c)
The interest rate affects the investment decision in the economy in two ways: through the expected yield on capital goods and the
opportunity cost of investment. When firms have to borrow funds to finance investment spending, they have to pay interest on such loans at
the current interest rate. If the expected yield on capital goods is higher than the current interest rate at which the funds to finance it can be
borrowed, investment will be expected to be profitable. The interest rate that can be earned by buying financial assets, such as bonds and
acquiring a fixed deposit, is the opportunity cost of investment. If the interest rate that can be earned on financial assets exceeds the yield
on capital goods, businesses will prefer to acquire financial assets than investing in capital goods. See pages 170 and 172 in the prescribed
book.
Question 4
Correct
MENU

Answer:
900 000 000 000


Question 5
Correct
MENU

a. a, c and d
b. only c
c. a, b and c 
d. only d
the multiplier.
Question 6
Correct
MENU

Answer:
87 500 000

Question 7
Correct
Select one:
Question 8
Correct
MENU
In the Keynesian model, government expenditure …

Select one:
a. increases with investment because investment increases the size of the tax base.
b. is determined by the level of tax revenue.
c. is undertaken solely to regulate the level of spending.
d. can be ignored because investment is taken to be the key determinant of income.
e. is taken to be autonomous because it is subject to government policy. 
Question 9
Correct
An increase in taxation in the Keynesian model with a government sector …
Select one:
a. increases the equilibrium level of income.
b. reduces the multiplier. 
c. reduces autonomous spending.
d. increases the multiplier.
Question 10
Correct
MENU

Select one:
Question 11
Correct
MENU

a. contractionary fiscal
c. expansionary monetary 
d. contractionary monetary

Question 12
Correct
MENU
Y = 10 000
C = 250 + 0.65Y
I = 600
G = 1 000
1 500 = 200 + mY
X = 300

iii. The aggregate expenditure in the economy is 1 950.00.

b. (ii), (iii) and (iv) are correct. 
Question 13
Correct
MENU
Select one:
a. figures 1 and 2
b. figure 1 
c. figures 2 and 4
d. figure 3
Question 14
Correct
Which one of the following statements regarding the aggregate demand-aggregate supply (AD-AS) model is correct?
Select one:
a. The AD-AS model cannot be used to determine the changes in the general price level.
b. The AD-AS model seeks to explain the general price level and the total production of goods and services. 
c. The AD curve shows the aggregate quantities of a specific product that are demanded at different prices.
d. The AS curve illustrates the levels of total expenditure in the economy at various price levels.
Question 15
Incorrect
MENU

Select one:
a. increase in aggregate demand 
d. decrease in aggregate demand
Question 16
Correct
Given the AD-AS model, if the national incomes of the major trading partners of South Africa (SA) were to rise, SA's ...
Select one:
a. aggregate supply curve would shift to the right.
b. aggregate demand curve would shift to the right. 
c. aggregate supply curve would shift to the left.
d. aggregate demand curve would shift to the left.
Question 17
Correct
MENU

Select one:
Question 18
Correct
Stagflation is best characterised by a/an _______ and can be solved by ___________.
Select one:
a. increase in unemployment and the price level; increasing productivity 
b. increase in output and the price level; increasing government spending
c. decrease in economic activities and unemployment; decreasing wages
d. declining total real production; decreasing personal income taxes
Information
MENU

Question 19
Correct
MENU
[2] taxes
a. [1] 
b.
[2] and [3]
c. [3] and [4]
d.
[1], [3] and [4]
Question 20
Correct
Answer:
25 000 000

◄ Assessment 2
Jump to...
Assessment 4 ►
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State Finished
Marks 15.00/20.00
Question 1
Correct
Question 2
Correct
MENU
prescribed textbook
Question 3
Correct
e.
Question 4
Correct
MENU

exchange rate.
Question 5
Incorrect
The balance of payments is a record of the transactions of each country with its trading partners. Use the following passage to answer the
question:
Source: Quartz Africa, https://qz.com/africa/2122487/african-governments-now-want-to-tax-your-netflix-and-chill/ (accessed 10 May 2022)
a. The streaming services will be recorded in the finance account as an inflow.

b. The streaming services will be recorded in the current account as an outflow.
c. The streaming services will be recorded in the financial account as an inflow.
d. The streaming services will be recorded in the current account as an inflow. 
The balance of payments records the transactions that a country conducts with the rest of the world. Goods and services are recorded in the
current account, while financial transactions such as trading in shares are recorded in the financial account. See Section 5.5 of the prescribed
book.
Question 6
Correct
MENU
Question 7
Incorrect
MENU
/ 2023(tonnes/year)
Maize(tonnes/year)
Country A 125 80
Country B 133 100

c. Country B has a comparative advantage in cheese.
d. Country A has an absolute advantage in cheese. 
125 C = 80 M
133 C = 100 M

Question 8
Correct
a and b
b and c
b
c
a, b and c 
Question 9
Incorrect
MENU
Dashboard
the / that
the SARB / achieve
uses to 2023 / this
Semester
a and b
b and c
c
b
a, b and c 
Question 10
Correct
Suppose the total value of goods and services in South Africa increased from R250 million in 2021 to R350 million in 2022, while the quantity
of goods and services produced remained the same. Which of the following statements is correct?
a. Nominal GDP increased and real GDP decreased.

b. Nominal GDP is unchanged and real GDP increased.
c. Nominal GDP increased and real GDP is unchanged. 
d. Nominal GDP decreased and real GDP is unchanged.
Nominal GDP can be due to an increase in the price level and /or an increase in real production. While real GDP the effect of inflation is
excluded form the real value.
Question 11
Correct
MENU


Question 12
Incorrect
have R1 000 in transfers from the government. Which of the following is correct?
a. If total income rises by R1 000, their induced consumption will rise by R913,33.
b. If total income rises by R1 000, their autonomous consumption will rise by R846,66. 
Question 13
Correct
MENU

Question 14
Correct
MENU

a. Equilibrium income is where point E is indicated 

b. Equilibrium income is where A = 200 + 0.8 Y
c. Equilibrium income is where C = 50 + 0.8Y
d. Equilibrium income cannot be calculated without information on savings
e. Equilibrium income is where I equals A
The equilibrium level of income is determined by the intersection of the A curve and the 45-degree line at point E.
Question 15
Correct
MENU
When the marginal propensity to consume is 0,75 what will the multiplier be?
a. 1
b. 4 
c. 0,25
d. 1,75
The multiplier (α) is calculated as follows:

Q14
Question 16
Correct
Use a Keynesian model (without a government and foreign sector) to calculate the answers for the question:

a. 15,00 million.
c. 63,64 million.
d. 80,00 million.
e. 115,00 million.
Question 17
Correct
MENU
a. 0,20 
b. 0,15
c. 0,85
d. 0,80
Question 18
Correct

b. a and b
c. b and c
d. a and c
incorrect.
Question 19
Incorrect
MENU

a) The 45-degree line shows the equality between the variable measured on the vertical axis and the variable measured on the horizontal
axis.
b) At any point above the 45-degree line, there is excess demand of goods and services.
c) When aggregate spending is greater than total production, firms experience an unplanned increase in their inventories and respond by
lowering their production.
a. a
b. b
c. c
d. a and b
e. All statements are correct. 
Refer to figure 6-6. As indicated in this figure A=Y on any point on the 45 degrees line. Since you can see in the figure any point above the
45 degrees line implies that A>Y, and thus excess demand. When aggregate spending is greater than total production, firms experience an
unplanned decrease in their inventories and respond by increasing their production.
Question 20
Correct

discussed.

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Assessment 3 ►
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Started on Friday, 17 March 2023, 4:05 PM

State Finished
Completed on Friday, 17 March 2023, 5:03 PM
Marks 9.00/18.00
Question 1
Incorrect
The circular flow model reveals that a decrease in South African imports will … .
a. increase output and income in the rest of the world 

b. increase revenue and domestic production in South Africa
c. increase revenue to foreign firms
d. decrease South African imports
In South Africa, this will encourage firms to produce locally without depending on foreign imported inputs material.
Question 2
Incorrect
Consider the circular flow of income. Which of the following is correct?
a. The government sector can only purchase goods and services in the factor market.
b. The role of the foreign sector is to only purchase goods and services in the goods market.
c. The government sector can purchase factors of production in the factor market.
d. Households purchase goods and services in the factor market. 

Question 3
Correct
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a. limited wants; unlimited

b. unlimited wants; unlimited
c. limited wants; limited
d. unlimited wants; limited 
Question 4
Incorrect
Thabo bought an iPhone 14 this week at one of the local malls. In which market did he purchase the phone?
a. factor market
b. local market 
c. labour market
d. goods market
The goods and services are traded under the good market where buyers meet the sellers.
Information
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Monthly
/ 2023 - 2020 1 / Monthly
ECS1601-23-S1 Online assessments / Assessment 1
years.

Question 5
Incorrect
175 000 000

Question 6
Correct
MENU
Which one of the following statements is/are correct about the total demand for money?
a) It is not affected by the interest rate but by the income level only.
b) It is affected by both the income level and the interest rate level.
c) It is not affected by the income but by the interest rate only.
a. a
b. b and c
c. b 
d. c
The total demand for money is affected by both the income level and the interest rate level.
Question 7
Correct
The South African Reserve Bank (SARB) uses ___________ as an instrument to maintain price stability.
a. the money supply

b. the repo rate 
c. value-added tax
d. the prime overdraft
SARB uses the repo rate as an instrument to maintain price stability.

Question 8
Correct
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Which of the following statements is/are correct about how banks create money?
Dashboard
a) / and
Banks mint Courses / UNISA
print money, and/ that
2023 / Semester
is how money is1 created
/ ECS1601-23-S1
by banks. / Online assessments / Assessment 1
b) Bank ABC creates money by holding its clients’ fixed deposits every day.
c) Bank XYZ creates money by issuing loans to the public.
d) Bank XYZ can only borrow its customers’ money after accessing their creditworthiness.
c
a and c
c and d 
d
a and d
a and b
Banks create money by granting loans to the public, individuals, or companies, and the funds they receive will be deposited in their bank
accounts or electronically transferred. Thus, in that case, new money is created and bank deposits are created as well. In addition, money is
created through advancing loans to credit-worthy customers.
Question 9
Incorrect
a. Money is not the only possible store of value.

b. The stock of money consists of notes and coins.
c. Money is always the best possible store of value.
d. In a monetary economy, there always has to be a double coincidence of wants.
e. Money can never lose its usefulness as a unit of account. 
Question 10
Correct
MENU
The following question is based on the passage below:

People are rushing in because of a lack of faith in government currencies. The Federal Reserve and other central banks have crushed interest
rates and are printing unimaginable amounts of money to pay for Covid-19 relief measures and to stimulate damaged economies. Bitcoin
and other cryptocurrencies are now seen as a respectable investment class, and financial institutions are adding Bitcoin to their portfolios.
Enthusiasts say Bitcoin is the new gold and that it will eventually replace the Dollar.
Not so fast! Whatever Bitcoin is, it is not money.

We use money to buy products and services. The Dollar, for instance, is like a claim cheque on a car, a coat, or a ticket to an event - only, in
the case of the Dollar, it can be used to purchase or sell anything.
Money works best when it has a stable value. While there are stories of vendors being willing to accept a cryptocurrency like Bitcoin,
cryptocurrencies will remain curiosities until their value is stable.
Source: https://www.forbes.com/sites/steveforbes/2021/02/02/bitcoin-is-not-money-yet/ (accessed 8 May 2022)
According to the passage, which of the following functions of money is violated by cryptocurrency?
(i) medium of exchange
(ii) store of value

(iii) unit of account
a.
(ii) and (iii) are correct.
b. (ii) is correct.
c.
(iii) is correct.
d. (i), (ii) and (iii) are correct. 
e.
(i) and (ii) are correct.
According to the passage, Bitcoin is not a form of money because it violates the characteristics. Although the article makes reference to
some vendors accepting cryptocurrency as a medium of exchange, it is not universally accepted as a form of tender and consequently it also
violates this property. See Section 2.2 of the prescribed book.
Question 11
Incorrect
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In 2014, the South African Reserve Bank (SARB) placed African Bank Investments Limited (African Bank) under curatorship, seizing control of
Dashboard
its / This
operations. Courses / UNISAof/ the
is an example 2023 / conducting
SARB Semester 1 its
/ …ECS1601-23-S1
role. / Online assessments / Assessment 1
a. banker of other banks 

b. bank supervisory
c. national payments
d. lender of last resort
When a bank is placed under curatorship, it is because the bank is under distress due to a combination of factors such as low capital and
liquidity assets. The role of the SARB includes various functions such as bank supervision, being the lender of last resort, making national
payments and being the banker of other banks. An explanation of the distinction between these functions is provided in Section 2.7 of the
prescribed book.
Question 12
Incorrect
between 3% and 6%. In the money market, the……
(iii) total demand for money (L) will decrease and will be reflected by downward slide along the L curve.

b. Only (i) is correct
c. Only (ii) is correct 
Question 13
Correct
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In 2022, Stats SA has reported that South Africa’s gross domestic product (GDP) decreased as a result of ESKOM power cuts or load-
Dashboard
shedding, / Courses
which led to a /decline
UNISAin /economic
2023 / activities
Semesteracross
1 / ECS1601-23-S1 / This
several industries. Online assessments
negatively / the
affected Assessment 1
remuneration of the factors of
production and income of the businesses. In the money market, this would be illustrated by which diagram?
a.
[1] and [2]
b. [3] and [4] 
c.
[2] and [4]
d. [1] and [3]
Question 14
MENU
Incorrect

___________________ financing.
a. increases; deflationary 
b. decreases; inflationary
c. decreases; deflationary
d. increases; direct
e. increases; inflationary
Question 15
Correct

a, b and c
b and c 
b
a and b
Question 16
Incorrect
MENU

a. Only (i) is correct

b. Only (ii) is correct 
e. (i) and (ii) are correct
Question 17
Correct
In South Africa, excise duty is levied on………
a. alcohol and tobacco only

b. income and wealth
c. alcohol, tobacco, fuel, and a few luxury goods 
d. fuel and a few luxury goods only.
Excise duty is levied on alcohol, tobacco, fuel, and a few luxury goods. Refer to page 59 in the prescribed textbook.
Question 18
Correct
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Which one of the following statements is correct about the South African government’s action to stimulate economic activities since the
Dashboard
Covid-19 / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 1
pandemic?
a. Decrease taxation and provide Covid-19 relief grants for both individuals and businesses. 
b. Decrease the repo rate charge for businesses only.
c. Decrease both the repo rate and taxation for businesses only, and provide Covid-19 relief grants.
d. Increase both taxation and the repo rate.
The correct action that may work for the SA government to stimulate economic activities since the Covid pandemic is to decrease taxation
and provide Covid relief grants for both businesses and individuals.
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State Finished
Marks 17.00/20.00
Question 1
Correct
Which of the following statements is/are correct in explaining the difference between production and income?
a) Income is the remuneration that the factors of production receive for being part of the production process.
b) Production is when business combines factors of production in planned activity to bring about goods and services to satisfy the needs
and wants of society.
c) Production is when a firm combines factors of production in planned activity to bring about goods that only satisfy society’s wants.
d) Income is the reward that the factors of production receive for not taking part in the production process.
a. a and b 
b. a and c
c. b and d
d. a, b, c and d
Income is the remuneration that the factors of production receive for being part of the production process. Production is when business
combines factors of production in planned activity to bring about goods and services to satisfy the needs and wants of society.
The correct answer is: a and b
Question 2
Correct
MENU
Use the information below to answer the question

After the implementation of a new government policy to increase spending on infrastructure, the employment levels within the country are
at an all-time high. As a result, the country is currently experiencing inflation levels of 7% per annum.
How would the South African Reserve Bank approach monetary policy in terms of its inflation-targeting mandate?
a. Implement policy aimed at increasing the levels of inflation.

b. Implement policy aimed at decreasing the levels of inflation. 
c. Implement policy aimed at keeping the inflation levels constant.
d. Refrain from implementing policy, as it cannot control the levels of inflation.
e. Advise government on the type of fiscal policy that can help with the inflation levels
The SARB has an inflation target of between 3 and 6 percent. At an inflation level of 7 percent, the SARB would thus implement policy aimed
at decreasing the levels of inflation.
The correct answer is: Implement policy aimed at decreasing the levels of inflation.
Question 3
Incorrect
In 2020, Melokuhle earned a salary of R20 000 a month and paid an income tax of R2 800; his salary increased to R25 000 a month, and he
now pays an income tax of R3 100. This is an example of a………
a. regressive tax.
b. proportional tax.
c. progressive tax. 
d. general tax.
Regressive tax is when tax paid to taxable income decreases as the taxable income increases.
The correct answer is: regressive tax.

Question 4
Correct
MENU
A tax system is progressive if …

a. an increase in tax causes prices to increase, but wages to fall.

b. the average tax rate increases as taxable income decreases.
c. an increase in taxable income causes an increase in tax paid. 
d. the marginal tax rate increases while the average tax rate decreases
Progressive tax means that as taxable income increases, so does the tax paid to the receiver of revenue. An example is personal income tax
in South Africa is: The more you earn, the higher is your personal income tax liability.
The correct answer is: an increase in taxable income causes an increase in tax paid.
Question 5
Correct
(a) The price of the Dollar becomes relatively lower.
Statement a and b.
demand curve.
Question 6
Correct
MENU
Given the definition of gross domestic product (GDP), which of the following transactions will NOT be captured in the GDP of South Africa
Dashboard
during / My courses / ECS1601-23-S1 / Online assessments / Assessment 6
this period?
a. Johannes purchases a second-hand car from a local dealership.

b. Katlego buys steel rods to make burglar bars in her business. 
c. Thabiso purchases a Sony tablet from Wish, a company in China.
d. Kagiso purchases burglar bars from Katlego’s business during the year.
The purchase of second-hand goods is not included in the calculation of the GDP in the current period. The purchase of an intermediate
good is not included in the calculation of the GDP because, by definition, the goods are not final. The GDP calculation includes the goods
produced in the local economy; consequently, goods that are imported violate the definition of GDP. See Section 5.1 of the prescribed book.
The correct answers are: Johannes purchases a second-hand car from a local dealership., Katlego buys steel rods to make burglar bars in her
business., Thabiso purchases a Sony tablet from Wish, a company in China.
Question 7
Correct
Which of the following has/have a major impact on the level of net exports (X – Z)?
a) the growth rate of GDP in South Africa relative to the growth rates of GDP in other countries
b) the price level in South Africa relative to the price levels in other countries
c) the exchange rate between the rand and other currencies.
a. c
b. a and b
c. a and c
d. b and c
e. a, b and c 
The growth rate of South Africa relative to other countries will affect the level of imports that South Africa receives, relative to the exports
that it sends abroad. The differences in growth will have an impact on net exports. The relative prices of South Africa affect the
competitiveness of South African goods relative to other countries; thus has an impact on net exports, similarly the exchange rate affects the
competitiveness of South African goods to other countries.
The correct answer is: a, b and c

Question 8
Correct
MENU
Which of the following is correct about taxes in the economy?

a. A tax rate of 0.15 means that 15 per cent of income is consumed on goods and services.
b. Taxes are a function of income. 
c. Taxes increase income available to spend on goods and services.
d. The introduction of taxes in the economy increases the slope of the consumption function.
Taxes are a function of income because a portion of income goes to tax. There is a negative relationship between taxes and disposable
income. As the tax rate increases, disposable income falls, vice versa.
Firstly, A tax rate of 0.15 implies that 15 per cent of income is paid to tax. Secondly, since 15 per cent goes to tax, only 85 per cent will be
available to spend and save. Therefore, income available for spending and saving has decreased. Thirdly, introduction of taxes reduces the
slope of the consumption function. Please see discussion in number 8 above.
The correct answer is: Taxes are a function of income.

Information
CASE STUDY 1
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Transition.
Question 9
Incorrect
24050000
 rand.

Question 10
Correct
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Dashboard
foreign / Mymarket.
exchange courses / ECS1601-23-S1 / Online assessments / Assessment 6


Question 11
Correct
challenge by _____.
Question 12
Correct
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Dashboard
My courses
Town. If/ Shayi
which / Assessment

Information
CASE STUDY 1
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct


Question 15
Correct
MENU
Dashboard
a( n) _____. / My courses / ECS1601-23-S1 / Online assessments / Assessment 6
Question 16
Correct
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)

Information
CASE STUDY 2
MENU
Climate Change
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct

a. (a), (b), and (c)

b. (c) and (d)
c. (a) and (d) 
d. (a), (c), and (d)
Question 18
Correct
curve.


Question 19
Correct
MENU
(ii) Capital
(iii) Labour

b. (ii) and (iii)
c. (i)
d. (i) and (iii) 
Question 20
Correct

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 

◄ Assessment 5
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State Finished
Marks 18.00/20.00
Question 1
Correct
The distribution effects of inflation are best described by …
a. the elderly benefiting at the expense of the young.

b. creditors benefiting at the expense of debtors.
c. borrowers benefiting at the expense of lenders. 
d. the poor benefiting at the expense of the rich.
Question 2
Correct
employment.
a. demand-pull; increases 
b. demand-pull; decreases
c. cost push; decreases
d. cost-push; increases

Question 3
Correct
MENU
Which of the following best describes a difference between demand-pull inflation and cost-push inflation?
a. There is no difference between demand-pull inflation and cost-push inflation as they are triggered by the same sources.
b. Demand-pull inflation occurs when there is a shortage in aggregate demand, while cost-push inflation is the upward pressure on the
general price level due to rising cost of production.
c. Cost-push inflation can be caused by increases in the cost of wages and intermediate goods, while demand-pull can be caused by 
increase in exports.
d. Demand-pull inflation is triggered by increases in the cost of production, while cost-push inflation occurs when the aggregate
demand for goods and services increases while aggregate supply remains unchanged.
Question 4
Correct
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
a. 1.74
b. 8.7
c. 15.68 
d. 13.55

Question 5
Correct
MENU


b. a decrease in interest rates 
c. the leftward shift of the AD curve
d. an increase in the cost of labour
Question 6
Correct
Which of the following can cause demand-pull inflation?

[1] A decrease in interest rates which leads to an increase in consumption and investment spending.
[2] An increase in government spending on social wealth and education.
[3] A rise in the cost of import intermediate goods due to a depreciation of the domestic currency.
a. [1]
b. [1], [2] and [3]
c. [3]
d. [2]
e. [1] and [2] 

Question 7
Correct
MENU
Kyla works for a fruit packing company in the Western Cape. However, she has been not working during certain periods of the year. This is
Dashboard
an example of/ …
My courses / ECS1601-23-S1 / Online assessments / Assessment 4
a. cyclical unemployment
c. seasonal unemployment 
Question 8
Correct
a. natural resources
b. imports 
c. capital widening
d. government spending

Question 9
Correct
MENU
Dashboard / My
unemployment courses / ECS1601-23-S1 / Online assessments / Assessment 4
rate?
a. 11,5%
b. 9,2%
c. 8,7%
d. 8% 
=(20 000) =0,08 or 8%

(250 000)
Question 10
Correct

(a) According to the strict definition, unemployed refers to persons over 15 years old who are not working or self-employed, who were
workers.
a. All the options are correct.

b. Only b is correct.
c. Only c is correct.
d. Only a is correct. 
e. None of the alternatives is correct.
Question 11
Correct
MENU
a. cyclical unemployment 
Question 12
Correct
Terresa used to work for a company that manufactured unique parts used in aeroplanes. However, she has been unable to find employment
due to the fact that the skills she possesses are obsolete. This is an example of …
a. structural unemployment 
b. frictional unemployment
c. cyclical unemployment
d. seasonal unemployment
See the explanations of the potential causes of structural unemployment on see section 11.1 of the prescribed textbook as well as Box 11-2.
Question 13
Incorrect
MENU

2019 2020 2019 2020
Answer:
5

Question 14
Correct
a. the trough phase.

b. the peak phase. 
c. the expansion phase.
d. the recovery phase.
Question 15
Correct
MENU
Dashboard
My courses
What is/ the
ECS1601-23-S1 / rate?
unemployment Online assessments / Assessment 4
Answer:
48%

Question 16
Correct
Answer: 41 000 000 
Question 17
Correct
a. a rightward shift of the Phillips curve.

b. a downward movement along the Phillips curve.
c. a leftward shift of the Phillips curve.
d. an upward movement along the Phillips curve. 
Question 18
Correct
MENU

Dashboard
(a) / My
tends to give courses
rise / ECS1601-23-S1 / Online assessments / Assessment 4
to crime
a. only (a) is correct

b. b) and (c) are correct
c. a), (b) and (c) 
d. a) and (b) are correct
Question 19
Incorrect

2019 2020 2019 2020
Answer:
5

Question 20
Correct
MENU
Dashboard
How many / Online assessments / Assessment 4
people are unemployed?
Answer: 12 000 000 
◄ Assessment 3
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Assessment 5 ►
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State Finished
Marks 19.00/20.00
Question 1
Correct
The question is based on the information below:
If the Keynesian saving function is S = -100 + 0.2 Y and disposable income is R 10 000, then:
Answer:
5

Question 2
Correct
MENU

a. Changes in the interest rate affect the decision to buy capital goods and financial assets. 
b. When an expansionary monetary policy is applied, the opportunity cost of buying capital goods is higher than that of buying financial
assets.
c. Acquiring new machinery and equipment for a firm is a low-risk investment because the interest rate is the only factor to consider
d. For an investment to be profitable, the interest rate on a loan has to exceed the expected return on new machinery for a firm.
Question 3
Correct
MENU

Autonomous consumption spending 50 billion
Marginal propensity to save 0.25
Investment spending 20 billion
Government spending 10 billion
Answer:
320 000 000 000


Question 4
Correct
a. a fall in the marginal propensity of imports will raise the multiplier and aggregate expenditure will rise 
b. a fall in autonomous consumption will raise the multiplier and decrease aggregate expenditure
c. an increase in the tax rate will increase the multiplier and raise aggregate expenditure
d. a fall in autonomous imports will raise the multiplier and aggregate expenditure will rise.
Question 5
Correct
MENU

Export = R8 000 000

Import = R8 000 000
Answer:
40 000 000

Question 6
Correct
MENU

a. R2 229 million
b. R2 771 million
c. R3 689 million
d. R1 311 million 
MENU
Question 7
Correct
Select one:
Question 8
Correct
In the Keynesian model with a government sector, an increase in the interest rate level can be expected to …
Select one:
a. decrease the equilibrium level of income. 
b. increase the equilibrium level of income.
c. increase consumption spending.
d. leave unchanged the equilibrium level of income.
Question 9
Incorrect
MENU
YDashboard
= 10 000 / My courses / ECS1601-23-S1 / Online assessments / Assessment 3
C = 250 + 0.65Y
I = 600
G = 1 000
1 500 = 200 + mY

a. (ii) and (iv) are correct.

b. (i), (ii) and (iv) are correct.
c. (i) and (iii) are correct. 
You have to calculate the autonomous expenditure and multiplier to answer the question. To answer the question, you have to calculate the
marginal propensity to import.
Question 10
Correct
a. expansionary fiscal policy
b. contractionary monetary policy. 
c. expansionary monetary policy.
d. contractionary fiscal policy.
Question 11
Correct
MENU
Dashboard
written as… / My courses / ECS1601-23-S1 / Online assessments / Assessment 3
Select one:
a. A=C+I+G. 
b. A=C+I+G+X+Z.
c. A=C+I.
d. A=C+I+G+X-Z.
Question 12
Correct
Select one:

Question 13
Correct
MENU
Demand management policy measures...

Select one:
a. do not affect the aggregate supply. 
b. are effective in addressing the problems of stagflation.
c. tend to change output and price level in opposite directions.
d. are also called incomes policy.
Question 14
Correct
Select one:

Question 15
Correct
MENU
Select one:
Question 16
Correct
In the AD-AS model, the aggregate demand curve shows…
Select one:
a. the relationship between the quantity demanded and price of a good or service.
b. the relationship between the general price level and the level of total expenditure. 
c. the positive relationship between the price level and real GDP.
d. the relationship between the quantity demanded and the quantity supplied.
Question 17
Correct
MENU
Select one:
a. figures 1 and 2
b. figure 1 
c. figures 2 and 4
d. figure 3
Question 18
Correct
Select one:
Information
MENU
Question 19
Correct
Answer:
25 000 000

Question 20
Correct
MENU

Answer:
2

◄ Assessment 2
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Assessment 4 ►
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State Finished
Marks 17.00/20.00
Question 1
Correct
a. net welfare gain
b. net welfare loss
d. net economic profit. 
e. economic growth.
Question 2
Correct
MENU
a. economic growth.
d.
colonisation
Question 3
Correct
Suppose Katlego owns a jewellery import business. Katlego imports necklaces and other jewellery from the United States. If there is a
depreciation in the Rand against the Dollar, which of the following is correct about Katlego’s business?
a. Katlego would need more Rands to purchase the jewellery and this will cause her to reduce her prices.
b. Katlego would need less Rands to purchase the jewellery and will reduce her prices.
c. Katlego would need less Rands to purchase the jewellery and this will raise her prices.
d. Katlego would need more Rands to purchase the jewellery and will raise her prices. 
When the domestic exchange rate depreciates, it implies that more Rands are needed to purchase US-denominated goods and services. As a
consequence, the cost of inputs and final goods in the importing country (assuming the importing country experiences the depreciation) will
increase and this will increase the price of the goods supplied in the domestic market.
Question 4
Correct
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Dashboard
US$415 000. /However,
the South / Online
African government willassessments / hospital
only allow the Assessment 2
to import five machines. Which trade policy measure is
a. import tariff
b. import quota 
c. exchange control
Question 5
Correct
export to SA.
production.
Question 6
Correct
MENU
The diagram below illustrates movements in the Rand/Pound exchange rate:

(a) An increase in the exchange rate from R19/£1 to R20/£1 is an appreciation of the South Africa Rand against the British Pound.
(b) At an exchange rate of R20/£1, there is an excess supply of British Pounds on S1.
(c) The movement from E1 to E2 results in an appreciation of the Rand against the Pound.
(d) The shift of the supply curve from S1 to S2 could be the result of South Africa earning export income from selling diamonds to the
United Kingdom (UK).
a. a and c
b. b and d
c. b, c and d 
d. only a and d
The diagram in this question represents the demand and supply of foreign exchange in the South African foreign exchange market. In this
case, we are looking at movements in the demand and supply of British Pounds in the South African foreign exchange market. When the
exchange rate increases from R19/£1 to R20/£1, it is a depreciation of the South African Rand against the British Pound. This means that
more Rands are needed to buy £1, meaning that the Rand has lost its strength against the Pound. An appreciation of the Rand against the
Pound would have the opposite effect. In other words, less Rands would be required to buy £1.
An appreciation would mean that the Rand has gained strength against the Pound. The exchange rate of R20/£1 is above the equilibrium
point E1, where the supply of Pounds exceeds the demand for Pounds, as in the diagram below: For the foreign exchange market to return
to equilibrium, the exchange rate has to decrease to return to E1. The movement from E1 to E2 represents an appreciation of the Rand
against the Pound because, at E2, the exchange rate has fallen below R19/£1. This means that less Rands are required to buy £1.
Also note that at E2, the quantity of Pounds in the South African economy has increased from £500 billion to £700 billion. The supply curve
has shifted from S1 to S2, indicating that the supply of Pounds in South Africa has increased. As mentioned above, export income earned
from selling diamonds to the UK will increase the supply of Pounds in South Africa. When the UK pays for the diamonds they receive, they
make the payment in Pounds.
Another factor that shifts the supply curve for foreign exchange to the right is foreign investors buying shares in South Africa. When a UK
investor decides to buy shares in Discovery Limited on the Johannesburg Stock Exchange, they use their pounds to buy these shares. This is
foreign currency (Pounds) coming into the South African economy.
Question 7
MENU
Correct

d.
Question 8
Correct
Question 9
Correct
MENU


c. Increase taxes
Question 10
Incorrect

Item Value (R ‘000)
Labour cost 36 000
Profits 20 000


c. (i) is correct.

Question 11
Correct
MENU
a.
Question 12
Correct
What will be the level of induced consumption if the marginal propensity to consume is 0.55 while the level of income (Y) is 500?
a. 250
b. 520
c. 275 
d. 370
Induced consumption = cY
Thus, if c = 0.55 and Y = 500
cY = 0.55 × 500 = 275

Question 13
Correct
MENU
This question is based on the diagram below, which indicated upwards shift of aggregate spending curve due to a change in investment
spending:
Which of the following statement(s) regarding the above diagram is/are correct?
a) The increase in investment does not affect the equilibrium level of income.
b) Investment spending has increased by R20 billion.
c) The marginal propensity to consume has changed as a result of the increase in investment.
d) At point E2, the equilibrium level of income is R50 billion.
a. a and c
b. only a
c. only c
d. b and d 
The equilibrium level of income in the economy has increased from R10 billion to R50 billion as a result of an increase in investment. This is
denoted by the movement along A = Y, from E1 (before investment) and E2 (after investment) as on the diagram below:
As indicated in the diagram above, investment spending has increased by R25 billion. This has resulted in an upward shift of the aggregate
spending function from A1 to A2.
The marginal propensity to consume has not changed for both A1 and A2. The slope of both these lines is constant, indicating that the
marginal propensity to consume has not changed. A change in the mpc would be denoted by a change in the slope of the aggregate
spending function (A).
On the diagram, at point E2 the equilibrium level of income is R50 billion.
MENU
Question 14
Correct
The point labelled A2 represents…
b. autonomous investment.
d. equilibrium consumption.
e. autonomous aggregate spending. 
A2 equals autonomous aggregate spending. It is autonomous consumption plus autonomous investment. See section 6.5 and figure 6-5 on
pages 122 of the prescribed textbook.
Question 15
Incorrect
MENU

In a simple Keynesian model without a government and a foreign sector:
a. If autonomous consumption is R30 billion, investment spending is R25 billion and the slope of the consumption function is 0,8, then
the equilibrium level of income is R55 billion.
b. If autonomous consumption is R65 billion, investment spending is R31 billion and the marginal propensity to consume is 0,75, then
c. If investment spending is R45 billion, autonomous consumption is R5 billion and the slope of the consumption function is 0,9, then
d. If autonomous consumption is R10 billion, investment spending is R20 billion and the marginal propensity to consume is 0,6, then the
equilibrium level of income is R75 billion.
e. If autonomous consumption is R20 billion, investment spending is R30 billion and the marginal propensity to consume is 0,55, 
then the equilibrium level of income is R 120 billion.
The equilibrium level of income (Ye) can be calculated by multiplying the multiplier (α) with the level of autonomous spending (A ̅).
Autonomous spending (A ̅) in this model is equal to C ̅+I ̅. The formula to calculate the multiplier (α) in this simple model is 1/(1-c). For
alternative A: ∝=1/(1-c)=1/(1-0,8)=1/0,2=5. A ̅=C ̅+I ̅=R30 billion+R25 billion=R55 billion Y = ∝× A Y = 5 X R55 billion = R275 billion Y = 5 X
R55 billion = R275 billion.
Question 16
Correct
Use a Keynesian model (without a government and foreign sector) to calculate the answers for the question:

a. 15,00 million.
c. 63,64 million.
d. 80,00 million.
e. 115,00 million.
Question 17
Correct
MENU
A decrease in the marginal propensity to consume .

a. does not affect the value of the multiplier.

b. will not occur because the marginal propensity to consume is set by government.
c. raises the value of the multiplier.
d. lowers the value of the multiplier. 
e. decreases the marginal propensity to save.
Remember that the formula for the multiplier is 1/(1-c) where c is marginal propensity to consume (see section 6.8). A decrease in c will lead
to a decrease in the value of the multiplier. The marginal propensity to consume is a behavioural characteristic that can only be observed
empirically – it is not something that can be set by anyone, even by government. A decrease in the marginal propensity to consume implies
an increase in the marginal propensity to save .
Question 18
Correct
Which of the following statements about investment spending is/are correct?
a) A higher real interest rate results in less investment spending.
b) When the economy moves into a recession, many firms will postpone buying investment goods even if the demand for their own product
is strong.
c) The optimism or pessimism of business firms is an important determinant of investment spending.
a. a
b. a and b
c. a and c
d. b and c
e. All the statements are correct. 
When the interest rate is higher, it becomes expensive to finance investments and consequently investment spending is lower. When the
economy moves into a recession firms will postpone investment goods as they will dissave from their existing inventories to meet demand.
The expectations of the firms are critical in the making investment decisions as it will inform the value of the investment and whether they
should invest in capital goods or financial assets. Thus, all the statements are correct. See section 8.2.
Question 19
Incorrect
MENU

Dashboard
a) / My
By definition, courses
income / ECS1601-23-S1
is always / Online
equal to production, assessments
but / Assessment
there is no guarantee 2 income will be spent.
that all
b) Equilibrium occurs when none of the participants in the economy have any incentive to change their behaviour.
c) When spending is equal to income, then the demand for goods and services is greater than the available supply.
d) Savings are a leakage in the circular flow of production, income, and spending.
a. a and b
b. c 
c. a, b and d
d. a, b and c
When spending is equal to income, then the demand for goods and services is equal to the available supply. This means that the economy is
in equilibrium. However, when the demand for goods and services is greater than the available supply, it means there is an excess demand
for goods and services. When the available supply is greater than the demand for goods and services, there is an excess supply of goods and
services in the economy. Refer to section 6.1 in the prescribed textbook.
Question 20
Correct
The value of the multiplier increases if the_______ increases.
a. tax rate
b. marginal propensity to save
c. marginal propensity to consume 
d. investment spending
When the marginal propensity to consume increases, it means that a larger part of an increase in income is spent on consumption, leading
to a larger second round increase in spending and also on income – a process that will continue until equilibrium is reached again.
When the tax rate increases, it means that a smaller part of an increase in income can be consumed, and thus decreasing the multiplier effect
of an increase in income. When the marginal propensity to save increases, it means that a smaller part of an increase in income will be
consumed, and thus decreasing the multiplier effect of an increase in income. Investment spending forms part of autonomous spending and
will therefore not affect the size of the multiplier.
Jump to...
Assessment 3 ►
MENU 
Started on Thursday, 16 March 2023, 7:56 PM

State Finished
Marks 15.00/18.00
Question 1
Correct
a. Capital as a factor of production refers to the amount of money required to produce a good or service.
b. The difference between capital goods and consumer goods is that the former maintains their full value over time.
c. The total income in the economy is equal to the total remuneration of the factors of production. 
d. The quality of the factors of production is insignificant; it is only the quantity that matters.
See pages 5 to 6 in the prescribed book.
Question 2
Correct
a. Causation between two variables proves correlation.

b. Causality between two variables always implies correlation.
Question 3
Correct
MENU
Dashboard
company, / Myshe
where courses / ECS1601-23-S1
uses capital / Online
and labour. After assessments
completing projects,/ the
Assessment 1 services will remunerate _______to ________in the
payment for
________ market.
a. wages; labour; goods

b. wages; entrepreneurship; factor
c. interest; capital; factor 
d. wages; capital; factor
prescribed book.
Question 4
Correct
a. labour market
b. goods market 
c. factor market
d. local market
Information
MENU
Monthly Salaries
2020 assessments
Assessment
years.

Question 5
Correct
Calculate the percentage change for CEO’s monthly salary between 2020 and 2021. Type in your answer
4.76%

Question 6
Correct
MENU
a. price of interest-bearing securities or bonds in South Africa will increase.

b. creation of money will slow down as demand for loans declines. 
d. quantity of money supply will increase by percentage increase of repo rate.
Question 7
Incorrect
a. b and d
b. b
c. a and d 
d. a
e. a, c and d

Question 8
Correct
MENU

a. The stock of money consists of notes and coins.

b. In a monetary economy, there always has to be a double coincidence of wants.
c. Money is not the only possible store of value. 
d. Money can never lose its usefulness as a unit of account.
e. Money is always the best possible store of value.
Question 9
Correct
Which of the following statements regarding financial intermediaries is/are correct? a) Financial intermediary channel funds from surplus
economic units in the form of deposit. b) Financial intermediaries channel funds from surplus economic to deficit economic units. c) Financial
intermediaries channel funds by granting credit to economic participance. d) Melokuhle saves a portion of his salary at his local bank. We
can conclude that Melokuhle is an example of a surplus unit.
a. a and c only
b. a, b, c, and d 
c. a and b only
d. a, b, and c only
All statements are correct about the financial intermediaries.
Question 10
Correct
essentials. Which of the following statements is true about credit card use?
a. Credit cards and electronic money are forms of money, as they can be used as means of payment.
c. Credit cards are not seen as money.

Question 11
Correct
MENU
The South African Reserve Bank (SARB) holds cash reserves for commercial banks such as Absa, FNB, Capitec, Nedbank and Standard Bank;
Dashboard
and / My
supervises andcourses / their
regulates ECS1601-23-S1
activities to /ensure
Online assessments
a sound / Assessment
and efficient 1
banking system. Which function of the SARB is this?
a. service to the government

b. provision of economic and statistical services
c. maintaining financial stability 
d. formulation and implementation of monetary policy
See Chapter 2, Section 2.7, on page 40 of the prescribed book for a detailed discussion of the role and functions of the SARB in the
economy.
Question 12
Incorrect
a. (ii) and (iii) are correct 

c. (i), (ii) and (iii) are correct
Question 13
Correct
MENU
In 2022, the cost of paying a home loan, car loan and groceries in South Africa has increased faster than households’ incomes, due to rapidly
Dashboard
rising interest/ rates
and a decline / In
in real income. Online assessments
the money market,/this
Assessment 1
would be illustrated by which diagram?
a. [1]
b. [2] 
c. [3]
d. [4]
Question 14
Correct
MENU
A justification for government intervention in the economy arises from the fact that market systems usually produce ________ outcomes, but
Dashboard
they / My courses
do not necessarily / ECS1601-23-S1
produce / Online assessments / Assessment 1
________ outcomes.
a. efficient; equitable 
b. quantitative; qualitative
c. equitable; efficient
d. profitable; equitable
e. efficient; profitable
When society has other goals such as an equitable distribution of income and wealth, which the market cannot produce, a further
justification for government intervention arises. See pages 49 and 50 in the prescribed book.
Question 15
Correct
Which one of the following does not pertain to fiscal policy?
a. The minister of finance

b. government spending cuts
c. tax increases
d. The budget deficit
e. private investment 
The main instrument of fiscal policy is the budget, (which is presented by the minister of finance) and the main policy variables are
government spending, (which includes public infrastructure spending), and taxation. Thus, private investment is not part of the fiscal policy
of the government but is driven by the private sector of the country.
Question 16
Correct
MENU
The participation of the government in the economy because:

(i) Markets do not always result in efficient allocations.
(ii) Markets can lead to inequitable allocations such as income inequality.
(iii) Markets are always efficient, and this requires government intervention.
(iv) Market systems experience considerable fluctuations, and this requires interventions to bring about stability.
a. (ii), (iii) and (iv) are correct.

b. (ii) and (iv) are correct. 
Question 17
Correct
MENU

2019 Mid-year population estimates by province Statistics South Africa (2019)
Over the years, South Africa has seen an increase in migration from less economically developed areas of the country to metropolitan areas
of three provinces, namely Gauteng, KwaZulu-Natal (KZN), and the Western Cape. These are centres with high level of economic activity that
attract migrants in search of better work opportunities and living standards. Based on the information above, which of the following
statements is correct?
(a) The high level of economic activity and migrants in Gauteng province would increase government spending on capital formation.
(b) Population growth in the metropolitan areas of South Africa increases the demand for public goods and services by households.
(c) Fiscal policy is not required to address the concentration of economic activity and population growth in the metropolitan areas of the
three provinces.
a. only c
b. only a
c. a and b 
d. b and c
Capital formation refers to spending on buildings and machinery and equipment to stimulate economic activity. It can also include spending
on human capital, which refers to the workers and skills available to participate in the economy. Therefore, the high level of economic
activity would require an expansionary fiscal policy, which entails an increase in government spending to develop infrastructure (roads,
bridges, railways, street lights, water, and electricity systems) and human capital (education, training, and skills development).
As more people settle in Gauteng for work, it increases the demand for land, buildings, proper roads, water, electricity, and basic public
services. This requires more government spending, using tax revenues collected from the public. When the population in metropolitan areas
increases, it increases the demand for public goods and services by households. This is because when more people live in an area, it
increases the consumption of water, electricity (including street lights), land for residential and business purposes, roads, public transport,
and refuse removal services by local municipalities.
Migration from less developed areas to metropolitan areas is one of the factors that contribute to increasing inequality in South Africa. This
is because skilled workers, entrepreneurs, resources, and wealth move to areas with better economic opportunities. People are more likely to
permanently settle in areas that provide better service delivery and living conditions. This makes inequality worse because less economically
developed areas lose the human and other resources needed to promote development and wealth creation in poorer areas. Therefore,
expansionary fiscal policy is required to bridge the gap between the rich and the poor. This includes increasing government spending on
road infrastructure connecting less developed areas to highly developed areas. Connective infrastructure is intended to promote equitable
distribution of income, wealth, and human resources.
Question 18
Incorrect
MENU
Income (R) 5 000 1 500
PAYE (R) 1 500 200

a. (iii) is correct.
b. (i) and (ii) are correct. 
c. (i), (ii) and (iii) are correct.
d. (i) and (iii) is correct.
e. (ii) and (iii) are correct.

Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
If national income increases from R160 billion to R 250 billion, the money demand for transaction purpose will…………. and the demand curve
for money will…………
a. cannot be determined; remain the same.

b. increase; make a rightward shift. 
c. decrease; make a rightward shift.
d. decrease; make a leftward shift.
If national income increases from R160 billion to R250 billion, the money demand for transaction purposes will increase and the demand
curve for money will make a rightward shift.
The correct answer is: increase; make a rightward shift.
Question 2
Correct
Suppose South Africa does not export nor import. Therefore, South Africa’s total spending formula can be written as…
a. 𝐴=𝐶+𝐼+𝐺. 
b. 𝐴=𝐶+𝐼+𝐺+𝑋−𝑍
c. 𝐴=𝐶+𝐼+𝐺+𝑋+𝑍
d. 𝐴=𝐶+𝐼
Refer to section 3.5 (Total spending: a summary on page 49) of the textbook. Total expenditure excluding spending by foreigners on South
African goods and services (exports, X) and spending by South Africans on imported goods and services (Z) can be written as follows (in
formula): 𝐴=𝐶+𝐼+𝐺, where A is represent total spending, 𝐶 is consumer spending by households, 𝐼 is investment spending by firms, and G is

𝐴=𝐶+𝐼+𝐺.
Question 3
Correct
MENU
0 - 181 900 18% of each R1

Question 4
Correct
The role of government is threefold. What are the three broad functions of government?
a. allocative, dispersal and stabilisation functions

b. allocative, dispersal and equitable distribution functions
c. allocative, equitable distribution and stabilisation functions 
d. equitable distribution, dispersal and stabilisation functions
On page 50 of the textbook, the need for government intervention or participation is discussed and on page 46 of the study guide Part A,
the three broad functions of government are outlined, namely the allocative, distribution and the stabilisation functions.
The correct answer is: allocative, equitable distribution and stabilisation functions
Question 5
Correct
MENU
a. net welfare gain
e. economic growth.
net welfare loss
Question 6
Correct
that the GDP has been measured according to...method.
a. expenditure 
b. production
c. income
d. nominal prices

expenditure
Question 7
Incorrect
MENU
The introduction of taxes to the Keynesian model…

a. Increases investment spending at each positive level of income.

b. Cause the slope of the consumption curve to become steeper. 
c. Flattens the consumption curve.
d. Causes the consumption function to shift parallel upwards.
e. Causes the consumption function to shift parallel downwards.
When the proportional income tax is introduced to finance part of the government spending, households have to pay a certain portion 𝑡 of
their income in the form of taxes. This reduces their disposable income and therefore also their consumption spending at each level of
income. The consumption (and aggregate) spending curve becomes flatter since a smaller portion of any increase in income is spent on
consumer goods and services
The correct answer is: Flattens the consumption curve.
Question 8
Correct
Which of the following is correct about taxes in the economy?
a. A tax rate of 0.15 means that 15 per cent of income is consumed on goods and services.
b. Taxes are a function of income. 
c. Taxes increase income available to spend on goods and services.
d. The introduction of taxes in the economy increases the slope of the consumption function.
Taxes are a function of income because a portion of income goes to tax. There is a negative relationship between taxes and disposable
income. As the tax rate increases, disposable income falls, vice versa.
Firstly, A tax rate of 0.15 implies that 15 per cent of income is paid to tax. Secondly, since 15 per cent goes to tax, only 85 per cent will be
available to spend and save. Therefore, income available for spending and saving has decreased. Thirdly, introduction of taxes reduces the
slope of the consumption function. Please see discussion in number 8 above.
The correct answer is: Taxes are a function of income.

Information
CASE STUDY 1
MENU
Transition.

Question 9
Correct
MENU
227500000
 rand.
Question 10
Correct


Question 11
Correct
MENU
Dashboard
Courses / IfUNISA
Town. Shayi is/ a 2023 / citizen,
Malawi Semester 1 / ofECS1601-23-S1
which the following is /correct
Online assessments
regarding / Assessment
her contribution 6
to GDP?

Question 12
Correct
a. Economic growth.
d. Price stability.

Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct
In the case study, it is indicated that Germany, together with France, the UK, US and European Union, pledged $ 8.5 billion to help finance
South Africa’s just energy transition. How will this affect the rand/dollar exchange rate on the South African foreign exchange market?
a. the rand will appreciate against the dollar. 

b. the rand will depreciate against the dollar.
c. the demand for dollars will increase.
d. the supply of dollars will decrease.
The supply of dollars in the South African foreign exchange market changes when there is an inflow of dollars into South Africa. This results
in an appreciation of the rand against the dollar. On the other hand, the demand for dollars in the South African foreign exchange market
changes when the rand is exchanged for dollars, leading to a depreciation of the rand against the dollar. Refer to section 4.1 in the
The correct answer is: the rand will appreciate against the dollar.
Question 15
Correct
MENU
Dashboard
Question 16
Correct


Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct

a. (a), (b), and (c)

b. (c) and (d)
c. (a) and (d) 
d. (a), (c), and (d)
Question 18
Correct
MENU
(ii) Capital
(iii) Labour

b. (ii) and (iii)
c. (i)
d. (i) and (iii) 
Question 19
Correct
curve.


Question 20
Correct
MENU
Dashboard
workers / farming
in the Coursesand
/ UNISA
tourism/sectors,
2023 /resulting
Semester
in a120%
/ ECS1601-23-S1
unemployment /rate
Online
on the above
a. a flow variable.
◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
a. the leftward shift of the AD curve

b. a decrease in interest rates 
c. a decrease in government spending
d. an increase in the cost of labour
Question 2
Correct
a. increase the repo rate. 
b. lower the interest rate level.
d. buy government bonds.

Question 3
Correct
MENU
a. It measures the cost of production. 

b. It measures the cost of living.
c. It has the same weights as CPI.
Question 4
Correct
Inflation can be caused by a/an ...... Within the AD-AS model, this will be illustrated by a ......
a. decrease in exports earnings; leftward shift of the AD curve

b. high wage demands by trade unions; leftward shift of the AS curve 
c. fall in crude oil price; rightward shift of the AS curve
d. rise in consumption spending; leftward shift of the AD curve
See section section 10.4 of the prescribed textbook.
Question 5
Correct
a. Demand-pull inflation is triggered by increases in the cost of production, while cost-push inflation occurs when the aggregate
c. There is no difference between demand-pull inflation and cost-push inflation as they are triggered by the same sources.
d. Cost-push inflation can be caused by increases in the cost of wages and intermediate goods, while demand-pull can be caused by 

Question 6
Correct
MENU
This question is based on the following table, which shows information about the Consumer Price Index (CPI) for country Z:
Month and year CPI
November 2016 98,5
December 2016 100
February 2018 103,4
March 2018 104,5
February 2019 107,8
March 2019 108,8
a. Inflation rate for March 2019 vs March 2018 is 4,1%. 
b. Inflation rate for 2016 is 1,5%.
c. Inflation rate for March 2019 vs February 2019 is -0,9%.
d. November 2016 is the base year.
Question 7
Correct
a. an increase in the cost of employing labour.

b. an increase in immigration.
c. an increase in labour intensity of production. 
d. a rapid increase in population growth.
unemployment
Question 8
Correct
MENU

Dashboard
(a) According/ toCourses
the strict/ definition,
UNISA / unemployed
2023 / Semester 1 persons
refers to / ECS1601-23-S1 / Online
over 15 years assessments
old who / Assessment
are not working 4
or self-employed, who were
workers.
a. All the options are correct.

b. Only b is correct.
c. None of the alternatives is correct.
d. Only c is correct.
e. Only a is correct. 
Question 9
Correct
Suppose that real GDP for 2009 was 1 000 and the rate of economic growth between 2009 and 2010 was 5%, what is real GDP for 2010?
a. 1 500
b. 950
c. 1 050 
d. 1 005
We can calculate the real GDP for 2010 as follows:

Real GDP2010 = Real GDP2009 x (1 +0,05)
Real GDP2010 = 1 000 x (1 + 0,05)
= 1 000 x 1,05
= 1 050.
Question 10
Correct
MENU
Which of the following can result in a reduction of unemployment?

a. Decrease in government spending

b. Increase in demand for exports 
c. Reduction in labour intensity of production
d. Increased population growth
e. Increased immigration
An increase in the demand for exports will increase aggregated demand, which can increase production, income and therefore also
employment. Option A is incorrect. A reduction in the labour intensity of production implies that production becomes more capital intensive,
implying that less labour will be needed and that unemployment may therefore increase. Options B and C are incorrect since increased
immigration and increased population growth implies more people competing for the same job, and this will therefore not decrease
unemployment. Option E is incorrect because a decrease in government spending might mean that some person in the government sector
lose his jobs, which will increase unemployment. A decrease in government spending may also decrease aggregated demand, and thus
decrease production and income, which will cause an increase in unemployment.
Question 11
Correct
a. between the peak and the trough.

b. between the trough and the peak. 
c. at the trough.
d. at the peak.

Question 12
Correct
MENU
Dashboard
an example of/ …Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
b. cyclical unemployment
d. seasonal unemployment 
Question 13
Correct
If workers in clothing shops are retrenched because of a recession, what do you call this type of unemployment?
a. cyclical unemployment 
b. frictional unemployment
c. structural unemployment
Cyclical unemployment occurs when there is a recession in the economy which leads to unemployment. Therefore, if workers are retrenched
because of a recession, it is called cyclical unemployment. See section 11.1 of the textbook.
Question 14
Correct
Answer:
23.33%

Question 15
Correct
MENU
Answer: 7 000 000 
Question 16
Correct
Answer: 31 000 000 
Question 17
Correct
Suppose the number of unemployed people is 19 million and employed people are 35 million. What will happen to the unemployment rate
if workers who were just retrenched decide to leave the labour force, ceteris paribus?
a. It will stay the same.

b. It will decrease.
c. It will increase. 
If workers decide to leave the labour force if they are retrenched, the unemployment rate will increase as they will not be included in the
labour force. Although they can able to work, they are not included because they decided to leave the labour force.
Question 18
Incorrect
MENU

2019 2020 2019 2020
Answer:
-3.57%

Question 19
Correct
MENU
Dashboard
Use / Courses
the extract below to /answer
UNISAthe/ question:
Stats SA released employment data yesterday, saying South Africa's unemployment rate increased to 26.4% in the first quarter of
2015.
This was up from 24.3% in the last quarter of 2014, as the data had been revised to take account of the changes to the structure of
the population revealed in the 2011 census. The last time this was done was in 2007 using the 2001 census.
"The results for quarter one show that the working-age population was 35.8 million, 15.5 million employed, 5.5 million
unemployed and 14.8 million not economically active. Thus resulting in an unemployment rate of 26.4%," said Lehohla, speaking at
a media briefing on the release of the first quarter results of 2015 of the Quarterly Labour Force Survey.
Source: southafrica.info
What is the formula used to calculate the unemployment rate for the first quarter of 2015?
a. unemployed divided by employed

b. unemployed divided by (employed plus not economically active)
c. unemployed divided by working age population
d. unemployed divided by (employed plus unemployed) 
The unemployment rate is determined as the unemployed divided by the labour force. The labour force is the employed plus the
unemployed. See section 11.1 of the textbook.
Question 20
Incorrect
MENU

2019 2020 2019 2020
Answer:
4

◄ Assessment 3
Jump to...
Assessment 5 ►
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State Finished
Marks 18.00/20.00
Question 1
Correct
and R50 billion respectively. Autonomous exports are R100 billion and autonomous imports are R35 billion. Also, c = 0,85; t = 0,275 and m =
a. R167.5 billion
b. R150 billion
c. R365 billion
Question 2
Incorrect
MENU

Consumption function = 15 million + 0,75 ( 40 million)
Net export = 10 million
Answer:
10 000 000

Question 3
Correct
a. raise; decrease; downward 

b. lower; decrease; downward
c. lower; increase; downward

Question 4
Correct
MENU

Government spending = R550
Exports = R330
Autonomous consumption = R280
Autonomous imports = R170

Investment expenditure = R120
Marginal propensity to consume = 0,75
What is the value of the multiplier?
Answer:
4

Question 5
Correct

Export = R8 000 000
Import = R8 000 000
Answer:
40 000 000

Question 6
Correct
MENU
a. The size of the multiplier decreases as government spending decreases.
b. It affects the size of the multiplier.
c. The income level is affected by government spending.
d. The income level does not affect government spending. 
Question 7
Correct
Select one:
Question 8
Correct
In the Keynesian model, the appreciation of the rand against the dollar would result in …
Select one:
a. a decrease in the equilibrium level of income. 
b. an increase in net exports.
c. an increase in aggregate expenditure.
d. an increase in the equilibrium level of income.
Question 9
Incorrect
MENU
YDashboard
= 10 000 / Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 3
C = 250 + 0.65Y
I = 600
G = 1 000
1 500 = 200 + mY


b. (i) and (iii) are correct.
d. (i) and (ii) are correct. 
You have to calculate the autonomous expenditure and multiplier to answer the question. To answer the question, you have to calculate the
marginal propensity to import.
Question 10
Correct
Select one:
Question 11
Correct
MENU
Net exports are positive when…

Select one:
a. A nation’s exports are more than its investments.
b. A nation’s exports are less than its investments.
c. A nation’s imports are more than its exports.
d. A nation’s imports are less than its exports. 
Question 12
Correct
b. contractionary fiscal
c. expansionary monetary 
d. expansionary fiscal

Question 13
Correct
MENU

Select one:

Question 14
Correct
MENU
Which one of the diagrams above illustrates the effects of the contractionary fiscal and monetary policies?
Select one:
a. figure 3
b. figure 4
c. figure 2 
d. figure 1
Question 15
Correct
Select one:
Question 16
Correct
MENU

Select one:
Question 17
Correct
Select one:
Question 18
Correct
Select one:
Information
MENU
Question 19
Correct
Answer:
2

Question 20
Correct
MENU
The marginal propensity to consume is…

Answer:
0.5

◄ Assessment 2
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Assessment 4 ►
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State Finished
Marks 18.00/20.00
Question 1
Correct
Question 2
Correct
Statement a and b.
demand curve.
Question 3
Correct
MENU
e.
Question 4
Correct

exchange rate.
Question 5
Correct
MENU
isDashboard
Courses France
/ UNISA
by how much
a. US$6 027,73
b. US$1 506,93 
c. US$4 520,80
d. US$414 750
Question 6
Correct
MENU

a. a and c
b. b and d
c. b, c and d 
d. only a and d
Question 7
MENU
Correct

a. a and c
b. b and d
c. a, b, c and d
d. only b and c 
Question 8
Correct
MENU
Dashboard
that the GDP/has
Courses / UNISAaccording
been measured / 2023 /to...method.
a. expenditure 
b. production
c. income
d. nominal prices
Question 9
Correct
c. A firm buys Mpho, its sales representative, a new car. 
e. Anne, a civil pensioner, receives her monthly pension from the government.
Question 10
Correct
MENU
The South African economy can be explained as follows:

Measure of Economic Activity for 2021 R’ 000
Gross domestic product 6 210 373
Gross domestic expenditure 4 495 378
Gross national income 4 655 984
Source: South African Reserve Bank. Given the above information, which of the following is correct?
a. Primary income payments exceeded primary income receipts into South Africa. 
b. Net exports in South Africa were negative and equal to R1 714 995.
c. Net exports in South Africa were positive and equal to R1 554 389.
d. Primary income payments were smaller than primary income receipts by R1 554 389
When primary receipts exceed payments, it is expected that GNI > GDP. Consequently, if primary receipts are less than payments GNI <
GDP. This represents the flow of income out of the country. The net exports are the difference between the GDP and the GDE. See section
5.2 of the prescribed book.
Question 11
Correct
Dissaving refers to when
a. consumption is financed by previous savings. 

b. no saving takes place.
c. consumption is larger than saving.
d. saving is larger than consumption.
e. the monetary value to the decision-maker of the choice made.
Autonomous saving will always be negative. This is because when the income level is zero, consumption will be financed by using past
savings or credit which is called dissaving. At an income level of zero, dissaving will thus equal to the level of autonomous consumption. The
slope of the saving function is equal to the marginal propensity to save. See pages 118 and 119 as well as Figure 6.3 prescribed book.
Question 12
Correct
MENU

a. 
b.
c.
d.

Question 13
Correct
MENU


Question 14
Correct
MENU


a. only a
b. a and b
c. only c
d. b and d 
Question 15
Correct
MENU
The question below is based on the following equations, which refer to a model of a closed economy without a government sector:
A=C+I
C = 600 + 0,75Y
I = 200
a) When income is zero, private aggregate spending is 800.
b) The slope of the C curve is 0,75.
c) The slope of the A curve is 0,75.
a. All the statements are correct. 

b. a and b
c. a and c
d. b and c
e. c
Investment = I ̅=200 and thus the aggregate spending function, which consists of consumption plus investment, will then be: A = 600 +
0,75Y+ 200, thus A = 800 + 0,75Y.
Question 16
Correct
Use a Keynesian model (without a government and foreign sector) to calculate the answer for the question:

Investment= R20 million
a. 0,75
b. 3,75
c. 0,60
d. 0,40 
e. 0,25
The part of an increase in income that is not spend on consumption is saved, therefore the marginal propensity to consume plus the
marginal propensity to save equals 1. This means that if the marginal propensity to consume is 0,6, then the marginal propensity to save will
be 0,4, because 0,6 + 0,4 = 1.
Question 17
Correct
MENU
If the marginal propensity to consume increases_____.

a. there will be a movement from left to right along the consumption function.
b. the consumption function will shift parallel upwards.
c. the consumption function will shift parallel downwards.
d. the slope of the consumption function will be steeper. 
Movements from left to right are a result of changes in the induced component of consumption, thus a result of changes in income. Since
the autonomous consumption is not a function of income, an increase in autonomous consumption will not create a movement along the
consumption function, however shift the Consumption Function Upwards. The marginal propensity is the slope of the consumption function,
thus changes in MPC will not affect the autonomous consumption, consequently not resulting in a shift. An increase in the MPC will cause
the consumption function to get steeper.
Question 18
Correct
Question 19
Correct
MENU


b. a and b
c. b and c
d. a and c
incorrect.
Question 20
Incorrect
Which of the following assumptions for the simple Keynesian model of closed economy without a government are correct?
a) The economy consists of households and firms only.
b) There is one government.
c) There is no foreign sector.
d) Prices and wages are fixed.
e) The stock of money supply and interest rates fluctuate.
a. a and d
b. a and c 
c. b, c and e
d. a, c and d
The first statement here states that the economy consists of households and firms, but the size of the firms is irrelevant. As the model
referred to is closed there is no foreign sector, thus statement c is correct. The model is also without a government; thus, statement b is not
correct. See Box 6-1 on the assumptions of the Keynesian Model.
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Assessment 3 ►
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MENU 

State Finished
Marks 12.00/18.00
Question 1
Correct
a. Causality between two variables always implies correlation.

b. An example of correlation is when an increase in the value of imports causes a rise in economic growth.
d. Causation between two variables proves correlation.
Question 2
Correct
a. The difference between capital goods and consumer goods is that the former maintains their full value over time.
b. The total income in the economy is equal to the total remuneration of the factors of production. 
c. The quality of the factors of production is insignificant; it is only the quantity that matters.
d. Capital as a factor of production refers to the amount of money required to produce a good or service.

Question 3
Correct
MENU
Dashboard
company, / Courses
where she uses/ capital
UNISAand/ labour.
2023 / After
Semester 1 / ECS1601-23-S1
completing / Online
projects, the payment for assessments / Assessment
services will remunerate 1
_______to ________in the
________ market.
a. interest; capital; factor 

b. wages; capital; factor
c. wages; entrepreneurship; factor
d. wages; labour; goods
prescribed book.
Question 4
Incorrect
PricewaterhouseCoopers (PwC), a financial services company. At her workstation, she will be using the Apple MacBook Air 13-inch laptop
with a high-resolution screen display. The degree and experience she is bringing to the company are considered a __________, while the
a. capital; entrepreneurship
b. human capital; labour
c. human capital; capital
d. entrepreneurship; technology 
Information
MENU
Monthly
/ 2023 - 2020 1 / Monthly
years.

Question 5
Incorrect
30.61%

Question 6
Correct
MENU
creditworthy.
b. When the interest rate increases, the opportunity cost of not holding bonds increases. 
d. Transaction demand for money is a function of the interest rate.
dividends).
Question 7
Incorrect
MENU
Dashboard
a) / of
M3 consists Courses
M2 plus/ aUNISA / 2023
long-term / Semester
deposit 1 /of ECS1601-23-S1
and is more a comprehensive/ measure
Online assessments
that includes /funds
Assessment
held as a1unit of account.
a. a
b. b
c. a and d
d. a, c and d
e. b and d 
Question 8
Correct
a. a, b, and c only
b. a and c only
c. a, b, c, and d 
d. a and b only

Question 9
Correct
MENU
The South African Reserve Bank (SARB) uses ___________ as an instrument to maintain price stability.
a. the prime overdraft

b. the money supply
c. value-added tax
d. the repo rate 
SARB uses the repo rate as an instrument to maintain price stability.
Question 10
Correct
and supervises and regulates their activities to ensure a sound and efficient banking system. Which function of the SARB is this?

b. formulation and implementation of monetary policy
c. provision of economic and statistical services
d. maintaining financial stability 
economy.
Question 11
Correct
essentials. Which of the following statements is true about credit card use?
a. Credit cards and electronic money are forms of money, as they can be used as means of payment.
c. Credit cards are not seen as money.

Question 12
Correct
MENU
Dashboard
decline / Courses
in economic / UNISA
activities across/ several
2023 /industries.
SemesterThis
1 /negatively
ECS1601-23-S1
affected/ the
Online assessments
remuneration / factors
of the Assessment 1
of production and income of
a. (i), (ii) and (iii) are correct

b. Only (i) is correct 
c. (i) and (ii) are correct
e. (ii) and (iii) are correct
Question 13
Correct
MENU
Dashboard
the / Courses
money market, / UNISA
this would / 2023 /by Semester
be illustrated 1 / ECS1601-23-S1 / Online assessments / Assessment 1
which diagram?
a. [1] 
b. [3]
c. [4]
d. [2]
Question 14
Incorrect
MENU
Dashboard
they / Courses produce
do not necessarily / UNISA / 2023
________ / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 1
outcomes.
a. efficient; equitable
b. equitable; efficient 
c. profitable; equitable
d. efficient; profitable
e. quantitative; qualitative
Question 15
Correct
a. proportional, because the VAT rate is constant across goods that attract VAT.
b. progressive, because the consumption expenditure of the rich is greater than that of the poor.
c. regressive, because the VAT burden increases as household income rises.
d. regressive, because low-income households spend a greater proportion of their income on goods that attract VAT. 
e. progressive, because most goods consumed by poor households are zero rated.
Question 16
Incorrect
MENU
The participation of the government in the economy because:

(i) Markets do not always result in efficient allocations.
(ii) Markets can lead to inequitable allocations such as income inequality.
(iii) Markets are always efficient, and this requires government intervention.
(iv) Market systems experience considerable fluctuations, and this requires interventions to bring about stability.
a. (ii) and (iv) are correct.

b. (ii), (iii) and (iv) are correct.
d. (i) and (ii) are correct. 
Question 17
Incorrect
MENU
Income (R) 5 000 1 500
PAYE (R) 1 500 200

a. (ii) and (iii) are correct. 

c. (iii) is correct.
d. (i) and (iii) is correct.
e. (i), (ii) and (iii) are correct.

Question 18
Correct
MENU
If the government decides to increase value-added tax (VAT) from 15 to 16%, what impact would this have on consumers?
a. VAT will only affect producers and not consumers.

b. Tax revenue generated from an increase in VAT will also increase spending on public healthcare.
c. A higher VAT rate will make households with the lowest incomes worse off. 
d. An increase in the VAT rate does not affect consumers’ decisions to save and invest.
An increase in the VAT rate from 15 to 16% will affect producers and consumers. Once VAT increases, it increases the cost of producing
goods and services for consumers. The operating expenses associated with running a firm (such as telephone and internet, servicing of
machinery and equipment, accounting services, cleaning, and maintenance) increase. This affects the final price of goods and services
provided. Consumers are then forced to pay higher prices to producers so that they can remain profitable. However, the buying power of
consumers goes down because higher prices due to an increase in VAT reduce disposable (after-tax) income.
An increase in tax revenue collected does not guarantee that it will be used for its intended purposes. Public funds can be misallocated or
used wastefully. Although it is important to have enough funds to spend on public healthcare, collecting more revenue from VAT does not
guarantee that more will be allocated for spending on healthcare. It depends on how public funds are managed and distributed. An increase
in VAT does affect consumers’ decisions to save and invest because higher taxes reduce the disposable income available to put away for
future use. This depends on the income earned and expenses in each household. This affects the disposable income available to put away.
Someone with fewer expenses and a high income may have enough left over to save and invest after consumption, even when VAT
increases.
Saving and investing means you temporarily reduce your buying power so that you increase it in the future. Low- and high-income earners
are not always able to do this. Low-income earners are the most severely affected when VAT increases because most of their income is spent
on consuming basic goods. This means that their buying power decreases further when VAT goes up, leaving less and less income for saving
and investing. Therefore, the welfare of those with the lowest incomes is reduced and low-income groups are worse off.
Jump to...

MENU 

State Finished
Time taken 1 hour 12 mins
Marks 18.00/20.00
Question 1
Correct
If the government intends making use of a contractionary fiscal policy, it should …
a. decrease taxes and decrease government spending.

b. decrease taxes and increase government spending.
c. increase the interest rate.
d. increase taxes and decrease government spending. 
See section 3.3 of the textbook. A contractionary fiscal policy is a policy that is aimed at decreasing total spending in the economy by
changing taxation and government spending. To decrease total spending, the government needs to increase taxes and decrease
government spending. The spending, the government needs to increase taxes and decrease government spending. The increase in taxes
decreases disposable income of households and they decrease their consumption spending and total spending declines. By decreasing
government spending, less is spend by government on goods and services and consequently total spending declines. Note that the increase
in the interest rate is not part of fiscal policy but part of monetary policy.
The correct answer is: increase taxes and decrease government spending.
Question 2
Correct
MENU
Which of the following best describes a household?

a. A group of people who work together.
b. A family that lives together and makes economic decisions. 
c. Any individual who make economic decisions for other people.
d. A basic economic unit that utilises factors of production.

Refer to section 3.5. In economics, households can be best described as a family or people who live together and make joint economic
decisions.
A family that lives together and makes economic decisions.
Question 3
Correct
In the 2015 budget speech, the Minister of Finance announced an increase in taxes amounting to R17 billion in the 2015/16 financial year. In
the context of the circular flow, this increase in taxes will be a(n ) ...
a. injection.
b. withdrawal. 
c. saving.
d. investment.
Government use taxes to purchase goods and services. The increase of R17 billion in taxes will be a leakage or withdrawal from the
government as it will be spending this money to provide services such as health, education and social welfare to its citizens.
The correct answer is: withdrawal.
Question 4
Correct
MENU

towards taxes.
taxes.
Question 5
Correct
a. net welfare gain
e. economic growth.


net welfare loss
Question 6
Correct
MENU
Dashboard
that the GDP/has
Mybeen
courses / ECS1601-23-S1
measured / Online assessments / Assessment 6
according to...method.
a. expenditure 
b. production
c. income
d. nominal prices

expenditure
Question 7
Correct
Assume that the full-employment income level is higher than the equilibrium income level. Full employment can be reached if
a)exports increase.
b)imports decrease.
c)the tax rate decreases.

b. a and c
c. a
d. b
e. c
An increase in exports will raise the equilibrium level closer to the full employment level. The decrease in imports will raise the equilibrium
level to a higher income level. A tax rate decrease will increase the equilibrium level closer to the full employment levels.
The correct answer is: All the statements are correct.

Question 8
Correct
MENU
curve.


Information
CASE STUDY 1
MENU
Transition.

Question 9
Incorrect
MENU
26300000
 rand.
Question 10
Correct
(a) a public good

(d) externalities
a. a, b and c
b. b and d
c. d and c 
d. b, c, and d

Question 11
Correct
MENU
Dashboard
My courses
Town. If/ Shayi
which / Assessment

Question 12
Correct


Information
CASE STUDY 1
MENU
Transition.

Question 13
Correct
MENU
Answer:
0.13%

Question 14
Correct


Question 15
Correct
MENU
Dashboard
will lead to a(/ n)My courses / ECS1601-23-S1 / Online assessments / Assessment 6
_____.
Question 16
Incorrect
(ii) Capital
(iii) Labour

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Information
CASE STUDY 2
MENU
Climate Change
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct
a. (a), (b), and (c)

b. (c) and (d)
c. (a) and (d) 
d. (a), (c), and (d)

Question 18
Correct
MENU
If the government intervenes to address the issues mentioned in paragraph 2 of the case study, the result will include _____.
(i) increased expenditure on public goods and services
(ii) pressure on government spending, particularly in basic infrastructure, housing, and the maintenance of law and order
(iii) increased aggregate spending, illustrated by a downward shift of the aggregate spending curve in the Keynesian model and a rightward
shift of the aggregate demand curve in the AD-AS model

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 
Refer to Section 3.4 and Section 9.1 in the prescribed textbook.
Question 19
Correct

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 

Question 20
Correct
MENU
Dashboard
climate / My courses / ECS1601-23-S1 / Online assessments / Assessment 6
change?

◄ Assessment 5
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State Finished
Marks 17.00/20.00
Question 1
Correct
a. Discourages savings.
b. Discourages exports.
c. Increases the costs of exports.
d. Increases the costs of imported goods. 
Question 2
Correct
a. buy government bonds.

Question 3
Correct
MENU

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
a. 12.72
b. 9.2
c. 14.58 
d. 18.6

Question 4
Correct
MENU

Which of the diagrams above illustrates cost-push inflation?
a. figure 3
b. figure 1
c. figure 2
d. figure 4 
Refer to section 10.4 of the prescribed textbook,
Question 5
Incorrect
If the inflation rate increases and nominal interest rate is unchanged, then _________.
a. the real interest rate will increase

b. the nominal interest rate will decrease 
c. the real interest rate will be unchanged
d. the real interest rate will decrease

Question 6
Correct
MENU
Dashboard
year. / My courses
If the inflation / ECS1601-23-S1
rate is 6%, / Online
which of the following assessments
would be true for/ the
Assessment
real value 4of the amount that Steven pays back at the end of the
year?
a. It would be more than R10 500.

b. It would be exactly R10 500.
c. It would be more than R10 000 but less than R10 500
d. It would be less than R10 000. 
Question 7
Correct
When the economy experiences stagflation, the economy experiences a price level that is _____ than the equilibrium price level and the
unemployment rate is _____ than full employment.
a. lower; lower.
b. higher; lower
c. lower; higher
d. higher; higher 
Stagflation is a situation of high inflation and low economic growth, and thus increased unemployment.
Question 8
Correct
a. increase of real GDP over time. 

c. gross domestic product per capita.
d. increase of nominal GDP over time.
Question 9
Correct
MENU

Dashboard
(a) According/ to
My courses
the / ECS1601-23-S1
strict definition, / Online
unemployed assessments
refers to / 15
persons over Assessment 4
years old who are not working or self-employed, who were
workers.
a. None of the alternatives is correct.

b. Only c is correct.
c. Only a is correct. 
d. Only b is correct.
e. All the options are correct.
Question 10
Incorrect
Which of the following statements regarding policy measures to reduce unemployment is/are correct?
a) Additional employment opportunities can be created by increasing automated production of goods and services.
b) Consumption and investment must be lowered by increasing taxes or interest rates.
c)The population growth rate must be lowered.
a. c
b. b
c. a 
d. All the statements are correct.
e. a and c
Additional employment opportunities can reduce the unemployment rate, however increasing automated production will raise
unemployment. Increasing Interest rate will discourage Investment; similarly, it applies to changes in taxes on consumption. Lowering the
population growth rate also reduces the growth of the labour force.
Question 11
Correct
MENU
Available data indicate that the level of real GDP will continue to decrease over the next five years. This suggests that the amount of
Dashboard / My
unemployment willcourses / ECS1601-23-S1 / Online assessments / Assessment 4
be___ ____.
a. seasonal; increasing
b. structural; decreasing
c. cyclical; increasing 
d. frictional; increasing
Unemployment associated with slumps or recessions in the economy is referred to as cyclical unemployment. An economy has periods of
rapid increase (economic booms) and periods of decline (recessions) in a business cycle. When the economy experiences a downturn in
economic activity with the level of output continuing to decrease over time, this will give rise to cyclical unemployment. See section 11.1 of
your textbook.
Question 12
Correct
a. negative externalities
b. subsistence farming
c. drug smuggling
d. increased labour force 
Question 13
Correct
MENU

2019 2020 2019 2020
Answer:
-3.57%

Question 14
Correct
a. the recovery phase.

b. the trough phase.
c. the peak phase. 
Question 15
Correct
MENU
Dashboard
active, 13 000/ 000
My people
courseswho
/ ECS1601-23-S1
are unemployed,/ and
Online assessments
40 000 / who
000 people Assessment 4 the age category 15 to 65 years. What does Ghana’s
are not in
Answer: 31 000 000 
Question 16
Correct
in the private sector. What is the unemployment rate?
Answer:
48%

Question 17
Incorrect
MENU

2019 2020 2019 2020
Answer:
4.58

Question 18
Correct
a. The unemployment rate will decrease and the inflation rate will increase.
b. Both will increase.
c. The unemployment rate will increase and the inflation rate will decrease. 
d. Both will decrease.
Question 19
Correct
MENU
Dashboard / My
unemployment courses
that is being/ dealt
ECS1601-23-S1
with is… / Online assessments / Assessment 4
a. frictional unemployment.
b. cyclical unemployment.
c. structural unemployment. 
d. seasonal unemployment.
workers.
Question 20
Correct
in the private sector. How many people are unemployed?
Answer: 12 000 000 
◄ Assessment 3
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State Finished
Marks 18.00/20.00
Question 1
Correct
Answer:
320 000 000 000


Question 2
Correct
MENU

Answer:
2

Question 3
Correct


Export = R8 000 000

Import = R8 000 000
Answer:
40 000 000

Question 4
Correct
MENU
Which of the following statements is/are correct about the fiscal policy measure to increase employment?
a) Autonomous spending will increase, and because of the increase in demand in the economy firms will incur an unexpected decline in
inventories, thus forcing them to increase production.
b) The increase in government spending does not have to match the required increase in income to decrease unemployment.
c) The multiplier effect will bring about the required increase in income level to increase employment.
d) Production will be encouraged and the level of income will increase as well as employment.
a, b and c
all the statements are correct 
b, c and d
a and b
The expansionary fiscal policy will be implemented to increase economic activity in two ways, either an increase in government spending and
a decrease in taxation, for an increase in government spending to increase employment this will not have to be equal to the required income
level, due to the multiplier effect is in operation, the increase in government spending that will bring about the required increase in income
will be smaller.
Question 5
Correct
MENU
Dashboard
and / My
R50 billion courses / Autonomous
respectively. ECS1601-23-S1 / Online
exports assessments
are R100 billion and /autonomous
Assessmentimports
3 are R35 billion. Also, c = 0,85; t = 0,275 and m =
a. R365 billion
b. R295.5 billion 
c. R167.5 billion
d. R150 billion
Question 6
Incorrect
MENU
Which of the following statements is/are correct about what influences South African exports?
Dashboard
a) Changes in/ exchange
My courses / do
rates ECS1601-23-S1 / Online
have an influence assessments
on South / Assessment 3
African exports.
b) Changes in economic conditions in the rest of the world.
c) Changes in the demand for exports.
e) International competitiveness does not influence exports.
a, b and e
a and b
a and c
a, c and e 
a, b and c
SA exports are influenced by economic conditions in the rest of the world, international competitiveness, exchange rates, and the demand
for exports does not depend on the income level in SA; therefore, export spending is exogenous.
Question 7
Correct
Select one:
Question 8
Correct
MENU

c. contractionary fiscal
d. expansionary monetary 
Question 9
Correct
Select one:
Question 10
Correct
MENU
In the Keynesian model, the appreciation of the rand against the dollar would result in …
Select one:
a. a decrease in the equilibrium level of income. 
b. an increase in net exports.
c. an increase in aggregate expenditure.
d. an increase in the equilibrium level of income.
Question 11
Incorrect
Y = 10 500
S = -250 + 0.65Y
I = 500
G = 1 100
2 000 = 200 + mY


c. (ii) and (iii) are correct.
Question 12
Correct
MENU
As income rises following an increase in autonomous net exports, induced imports will _____.
Select one:
a. decrease
b. increase by the same value as increase in income
c. remain unchanged
d. increase 
Question 13
Correct

(e) Prices increase
Select one:
Question 14
Correct
In the AD-AS model, the aggregate demand curve shows…
Select one:
a. the relationship between the quantity demanded and price of a good or service.
b. the relationship between the general price level and the level of total expenditure. 
c. the positive relationship between the price level and real GDP.
d. the relationship between the quantity demanded and the quantity supplied.
Question 15
Correct
MENU
Select one:
Question 16
Correct
Based on the international trade effect, how would an increase in the price level in South Africa affect the exchange rate and aggregate
demand?
Select one:
a. rand will depreciate; the quantity of aggregate demand will increase.
b. rand will appreciate; the quantity of aggregate demand will decrease. 
c. exchange rate will remain unchanged; the aggregate demand will decrease.
d. exchange rate will increase; the aggregate demand will increase.
Question 17
Correct
MENU

Select one:
Question 18
Correct
Select one:
Information
MENU
Question 19
Correct
If total income is R80 million, an induced consumption is R…
Answer:
40 000 000

The diagram illustrates a graph for the Keynesian model. The graph shows aggregate spending in an economy with a government sector
(see Figure 7-2, page 141 in the prescribed textbook). Furthermore, it also indicates two equations of aggregate spending: (i) A = C+I, where
C+I = 40+0,5Y and (ii) A = C+I+G, where C+I+G=60+0,5Y. To be able to answer the question (s) you need to understand total consumption
spending, multiplier, autonomous aggregate spending and the equilibrium level of income formulas.
Question 20
Correct
MENU
The equilibrium level of income at Y1 is R…

Answer:
80 000 000

◄ Assessment 2
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Assessment 4 ►
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State Finished
Marks 16.00/20.00
Question 1
Correct
a. net welfare gain
b. net welfare loss
d. net economic profit. 
e. economic growth.
Question 2
Correct
MENU
e.
Question 3
Correct
Rand appreciates.
Yuan depreciates.
c. The price of goods that Sandile’s business imports will decrease in terms of the Yuan.
d. The price of goods that Sandile’s business imports will decrease in terms of the Rand. 
Question 4
Correct
MENU

exchange rate.
Question 5
Correct
Transaction Value (R ‘000)

a. (ii) is correct. 
CA = X – M
Question 6
Incorrect
MENU

a. a and d
b. b and c
c. a, b, c and d
d. a, b and c 
Question 7
Correct
MENU

a. a and c
b. b and d
c. a, b, c and d
d. only b and c 
Question 8
Correct
MENU
Which of the following does not represent a key macroeconomic variable?

a. unemployment rate.
b. inflation rate.
c. gross domestic product.
d. income distribution
e. population growth rate. 
The first four options all refer to full employment, price stability, economic growth and equitable distribution of income as macroeconomic
objectives, which may be used as criteria to judge the performance of the economy. The fifth macroeconomic objective is balance of
payments stability (or external stability. The last option, the population growth rate is thus a key macroeconomic variable. See page 82 in
prescribed book.
Question 9
Correct
a and b
b and c
b
c
a, b and c 
Question 10
Incorrect
MENU

Dashboard / My courses
Item / ECS1601-23-S1 / Online assessments
Value (R /‘000)
Assessment 2
Labour cost 36 000
Profits 20 000

a. (i) and (ii) are correct. 

c. (i) is correct.
Question 11
Correct

Question 12
Incorrect
MENU
Dashboard
have R1 000 /in My courses
transfers / the
from ECS1601-23-S1
government. /Which
Online
of assessments
the following /is correct?
Assessment 2
d. The autonomous consumption is R1 000 and it increases when total income rises. 
Question 13
Correct
MENU


Question 14
Correct
MENU

a. MPC is 1/4
b. MPC is 5/4
c. MPS is 1-1/4
d. MPC is 4/5 
𝐶=𝐶̅+𝑐𝑌 𝐶=50+0.8𝑌
Question 15
Correct
MENU

means MPS is zero
Question 16
Correct
This question is based on the following information:

Investment spending = 300
The value of the multiplier is_____.
a. 0,2.
b. 0,8.
c. 2.
d. 5 
The formula for the multiplier is 1/(1-c) , thus if c = 0,8 the multiplier is 1/(1-0.8)=5.
Question 17
Correct
MENU
A decrease in the marginal propensity to consume .

a. does not affect the value of the multiplier.

b. will not occur because the marginal propensity to consume is set by government.
c. raises the value of the multiplier.
d. lowers the value of the multiplier. 
e. decreases the marginal propensity to save.
Remember that the formula for the multiplier is 1/(1-c) where c is marginal propensity to consume (see section 6.8). A decrease in c will lead
to a decrease in the value of the multiplier. The marginal propensity to consume is a behavioural characteristic that can only be observed
empirically – it is not something that can be set by anyone, even by government. A decrease in the marginal propensity to consume implies
an increase in the marginal propensity to save .
Question 18
Correct
An increase in autonomous consumption will result in_____.
a. a movement from left to right along the consumption function.

b. a movement from right to left along the consumption function.
c. an upward shift of the consumption function. 
d. a downward shift of the consumption function.
An increase in autonomous consumption will raise the level of consumption by shifting upwards. Movements from left to right are a result of
changes in the induced component of consumption, thus a result of changes in income. Since the autonomous consumption is not a
function of income, an increase in autonomous consumption will not create a movement along the consumption function.
Question 19
Correct
MENU


discussed.
Question 20
Incorrect
Which of the following assumptions for the simple Keynesian model of closed economy without a government are correct?
a) The economy consists of households and firms only.
b) There is one government.
c) There is no foreign sector.
d) Prices and wages are fixed.
e) The stock of money supply and interest rates fluctuate.
a. a and d
b. a and c 
c. b, c and e
d. a, c and d
The first statement here states that the economy consists of households and firms, but the size of the firms is irrelevant. As the model
referred to is closed there is no foreign sector, thus statement c is correct. The model is also without a government; thus, statement b is not
correct. See Box 6-1 on the assumptions of the Keynesian Model.

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State Finished
Marks 15.00/18.00
Question 1
Correct
a. The difference between capital goods and consumer goods is that the former maintains their full value over time.
b. The total income in the economy is equal to the total remuneration of the factors of production. 
c. The quality of the factors of production is insignificant; it is only the quantity that matters.
d. Capital as a factor of production refers to the amount of money required to produce a good or service.
Question 2
Correct
a. the opportunity to make a different choice.

b. the value to the decision-maker of the alternative that could have been chosen.
c. the monetary value to the decision-maker of the choice made.
d. the cost of the alternative. 
e. the monetary value of the best alternative that was chosen instead of the alternative.
Question 3
Correct
MENU
Dashboard
company, / Myshe
where courses / ECS1601-23-S1
uses capital / Online
and labour. After assessments
completing projects,/ the
Assessment 1 services will remunerate _______to ________in the
payment for
________ market.
a. wages; entrepreneurship; factor

b. wages; capital; factor
c. wages; labour; goods
d. interest; capital; factor 
prescribed book.
Question 4
Correct
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?
a. macroeconomics
b. development economics
c. international economics
d. microeconomics 
The four retail stores (Pick n Pay, Spar, Checkers and Shoprite) coming together to agree on a price level for gas heaters is called a cartel. The
purpose of a cartel is to increase the profitability of firms and to prevent competitors from entering the market for certain goods. This
scenario applies to microeconomics because it deals with the interaction of firms in a market and the effects of their actions on prices.
Macroeconomics focuses on the performance of the economy as a whole by providing an overall view of the economic system of a country.
This area of economics focuses on total production, income, spending, economic growth, employment and unemployment, inflation, price
levels and the balance of payments.
International economics focuses on the financial flows, exchange rates and differences in productive resources between countries. It is also
concerned with the role of institutions affecting transactions between countries. For example, international economics looks at how a
multinational company (for example Vodafone) investing in South Africa affects employment, technology and skills transfer.
Development economics focuses on improving the economic, social and fiscal conditions in developing countries. It also highlights the
differences between developed and developing countries, and how these differences can be mitigated.
Information
MENU
Monthly Salaries
2020 assessments
Assessment
years.

Question 5
Incorrect
4.67

Question 6
Correct
a. SARB protects the value of the currency in the interest of balanced and sustainable economic growth in the Republic. 
b. SARB’s objective is to sell government security to commercial banks.
c. SARB’s objective is to make use of the repo rate to influence economic activities.
d. SARB does not need to consult the cabinet member responsible for national financial matters since it performs it functions
independently.
Question 7
Incorrect
MENU

a. The quantity of money demanded for speculative purposes is positively related to the interest rate.
b. The quantity of money demanded for transaction purposes depends on the interest rate.
c. The quantity of money demanded for speculative purposes is inversely related to the interest rate.
d. Anyone who wishes to enter into transactions in a monetary economy has to hold money as a store of value. 
e. The demand for money as an asset is also called the transactions demand for money.
Question 8
Correct
creditworthy.
b. Transaction demand for money is a function of the interest rate.
d. When the interest rate increases, the opportunity cost of not holding bonds increases. 
dividends).
Question 9
Correct
MENU
a. transaction; passive balance

b. transaction; active balance 
d. speculative; active balance
Question 10
Correct
and supervises and regulates their activities to ensure a sound and efficient banking system. Which function of the SARB is this?

b. provision of economic and statistical services
c. formulation and implementation of monetary policy
d. maintaining financial stability 
economy.
Question 11
Correct
MENU
Dashboard
its / This
operations. My courses / ECS1601-23-S1
is an example / Online assessments
of the SARB conducting its … role. / Assessment 1
a. bank supervisory 
b. lender of last resort
c. banker of other banks
d. national payments
prescribed book.
Question 12
Incorrect
In 2022, the cost of paying a home loan, car loan and groceries in South Africa has increased faster than households’ incomes, due to rapidly
rising interest rates and a decline real income. In the money market, the…….
(iii) total demand for money will decrease and will be reflected by the upward climb along the L curve.
a. (i), (ii) and (iii) are correct 

c. (ii) and (iii) are correct
Question 13
Correct
MENU
Dashboard
the / My courses
money market, / ECS1601-23-S1
this would be illustrated by /which
Online assessments / Assessment 1
diagram?
a. [2]
b. [4]
c. [1] 
d. [3]
Question 14
Correct
MENU


b. (ii) and (iii) are correct 
e. Only (iii) is correct
Question 15
Correct

a, b and c
a and b
b
b and c 
Question 16
Correct
MENU
Dashboard / My financing.
___________________ courses / ECS1601-23-S1 / Online assessments / Assessment 1
a. increases; direct
b. increases; inflationary 
c. decreases; inflationary
d. decreases; deflationary
e. increases; deflationary
Question 17
Correct
a. regressive
b. general
c. proportional
d. progressive 
Question 18
Correct
The Umsunduzi Municipality is an example of …
a. regional government
b. local government 
c. a public corporation
d. central government

MENU
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State Finished
Marks 18.00/20.00
Question 1
Correct
The opportunity cost of holding money is
a. The interest that is forgone had the money been used to purchase bonds. 
b. The rent that could have been earned had the money been used to purchase bonds.
c. The profit that could have been earned had the money been used to purchase bonds.
d. The interest that is forgone had the money been used to purchase consumer goods.
Interest can only be earned if money is used to purchase bonds, not consumer goods. Consumer goods are used by households to satisfy
their wants, and include food and wine. Rent is earned on land and profit on entrepreneurship.
The correct answer is: The interest that is forgone had the money been used to purchase bonds.
Question 2
Correct
South Africa is an open economy. Therefore, the SA gross domestic product (GDP) formula is?
a. GDP = C + I
b. GDP = C+G+I+(X-Z) 
c. GDP = C+G+I-(X-Z)
d. GDP = C+I+G
South Africa is an open economy. Therefore, the SA gross domestic product (GDP) formula is GDP = C+G+I+(X-Z).
The correct answer is: GDP = C+G+I+(X-Z)

Question 3
Correct
MENU
According to the ………. people should pay what they can afford and that will be determined by the level of income.
a. ability-to-pay principle 
b. benefit principle
c. affordability principle
d. vertical principle only
According to the ability-to-pay principle people should pay what they can afford and that will be determined by their income level.
The correct answer is: ability-to-pay principle
Question 4
Correct

Question 5
Correct
MENU


Russia has an absolute advantage in the production petrol.
Question 6
Correct
Which of the following statements about the Gross Domestic Product (GDP) are correct?
a. The GDP includes the total value of goods and services produced in an economy in a particular year.
b. The GDP can be calculated by including the value of intermediate goods and services.
c. The GDP can be calculated using expenditure, spending and production methods.
d. The GDP includes the total value of all final goods and services produced within the boundaries of a country in a particular year. 
The GDP should have all the following aspects: total value, final, within the boundaries and time (a year). The value of intermediate goods
and services is excluded when measuring GDP, since it may lead to double counting. The GDP can be calculated using income, expenditure,
and production methods. See Section 5.1 in the prescribed book.
The correct answer is: The GDP includes the total value of all final goods and services produced within the boundaries of a country in a
particular year.
Question 7
Correct
MENU
curve.


Question 8
Correct
MENU
Which of the following is correct regarding the effects of expansionary fiscal policy?
a. The size of the multiplier will increase. 

b. Autonomous spending and the level of income will decrease.
c. The slope of the consumption function will decrease due to a rise in the tax rate.
d. There will be a leakage of money out of the circular flow of income, spending and production.
An expansionary fiscal policy occurs when government spending is increased and taxes decreased. Since taxes affect the slope of the
consumption function, a reduction in taxes increases the slope of the consumption function, thus causing the size of the multiplier to
increase. Autonomous spending and equilibrium income will increase due to the injection of money in the circular flow of income, spending,
and production.
The correct answer is: The size of the multiplier will increase.
Information
CASE STUDY 1
Transition.

Question 9
Incorrect
MENU
20900000
 rand.

Question 10
Correct
MENU
a. figure 1 
b. figure 2
c. figure 3
d. figure 4

Question 11
Correct
MENU
Dashboard / So,
infrastructure. Courses / UNISA
if we need to take/ 100
2023 / Semester
or more 1 (on
students / ECS1601-23-S1 / one
a long course) at Online
go, assessments / Assessment
we can do that." 6 AD-AS framework,
In terms of the

Question 12
Correct
farm, north of Cape Town. If Shayi is a Malawi citizen, which of the following is correct regarding her contribution to GDP?

Information
CASE STUDY 1
MENU
Transition.

Question 13
Correct
MENU
Answer:
0.13%

Question 14
Correct
(a) a public good

(d) externalities
a. a, b and c
b. b and d
c. d and c 
d. b, c, and d
Question 15
Correct
MENU
Dashboard
Question 16
Correct
Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Incorrect
In what way will the increasingly unsuitable climate envelope and associated extreme weather events, caused by climate change, affect the
Western Cape economy in terms of the AD-AS model?
a. Shift the AD curve to the right. 

c. Cause a downward movement along the AD curve.
d. Cause a movement along the AS-curve.
The extreme weather conditions caused by climate change in the Western Cape will shift the AS-curve to the left or upwards due to a
decrease in the supply of agricultural products. Refer to Section 9.1 of the prescribed textbook.
The correct answer is: Shift the AS-curve to the left.
Question 18
Correct
confidence in those sectors, resulting in a decline in investment spending. Based on a simple Keynesian and AD-AS models, a reduction in
a. (a), (b), (c), and (e)

b. (c) and (e)
c. (d) and (e) 
d. (a), (d), and (e)
Question 19
Correct
MENU
Dashboard
change?

Question 20
Correct
a. a flow variable.
◄ Assessment 5
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State Finished
Marks 19.00/20.00
Question 1
Correct
b. buy government bonds.

Question 2
Correct
MENU

Which one of the diagrams above illustrates demand-pull inflation?
a. figure 1 
b. figure 4
c. figure 3
d. figure 2
Question 3
Correct

b. decrease productivity.
c. increase aggregate spending.
d. decrease taxes.

Question 4
Correct
MENU
a. Demand-pull inflation is triggered by increases in the cost of production, while cost-push inflation occurs when the aggregate
c. There is no difference between demand-pull inflation and cost-push inflation as they are triggered by the same sources.
d. Cost-push inflation can be caused by increases in the cost of wages and intermediate goods, while demand-pull can be caused by 
Question 5
Correct
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
a. 12.72
b. 18.6
c. 9.2
d. 14.58 

Question 6
Correct
MENU
If the inflation rate increases and nominal interest rate is unchanged, then _________.
a. the real interest rate will be unchanged

b. the real interest rate will increase
c. the real interest rate will decrease 
d. the nominal interest rate will decrease
Question 7
Correct
a. a leftward shift of the aggregate supply curve. 

b. a leftward shift of the aggregate demand curve.
c. a rightward shift of the aggregate supply curve.
d. a rightward shift of the aggregate demand curve.
9-2 on page 181.
Question 8
Correct

b. gross domestic product per capita.
d. increase of current GDP per capita.
Question 9
Correct
MENU
a. negative externalities
b. increased labour force 
d. drug smuggling
Question 10
Correct
due to the fact that the skills she possesses are obsolete. This is an example of …
a. cyclical unemployment
b. structural unemployment 
Question 11
Correct
an example of …
b. seasonal unemployment 
d. cyclical unemployment

Question 12
Correct
MENU

a. downswing
b. recession
c. trough 
d. upswing
Question 13
Correct
Answer: 2 000 000 
Question 14
Correct
Answer: 41 000 000 

Question 15
Correct
MENU

2019 2020 2019 2020
Answer:
-3.57%

Question 16
Correct
MENU
Dashboard
Use / Courses
the extract below to /answer
UNISAthe/ question:
Stats SA released employment data yesterday, saying South Africa's unemployment rate increased to 26.4% in the first quarter of
2015.
This was up from 24.3% in the last quarter of 2014, as the data had been revised to take account of the changes to the structure of
the population revealed in the 2011 census. The last time this was done was in 2007 using the 2001 census.
"The results for quarter one show that the working-age population was 35.8 million, 15.5 million employed, 5.5 million
unemployed and 14.8 million not economically active. Thus resulting in an unemployment rate of 26.4%," said Lehohla, speaking at
a media briefing on the release of the first quarter results of 2015 of the Quarterly Labour Force Survey.
Source: southafrica.info
What is the formula used to calculate the unemployment rate for the first quarter of 2015?
a. unemployed divided by (employed plus unemployed) 

b. unemployed divided by working age population
c. unemployed divided by (employed plus not economically active)
d. unemployed divided by employed
The unemployment rate is determined as the unemployed divided by the labour force. The labour force is the employed plus the
unemployed. See section 11.1 of the textbook.
Question 17
Correct
b. The real GDP increased mainly due to an increase in defence expenditure.
c. The nominal GDP increased by 10%, while the price level increased by 12% and there was no increase in the population.
d. The nominal GDP increased by 6%, while the price level increased by 6% and the population increased by 1%.
Question 18
Correct
MENU
Dashboard
Courses / isUNISA
Answer:
48%

Question 19
Correct
a. a), (b) and (c)

b. c) and (d)
c. a) and (c) 
d. a) and (d)
Question 20
Incorrect
MENU

2019 2020 2019 2020
351 billion 302 billion 58,6 Million 59,3 million
Answer:
4

◄ Assessment 3
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State Finished
Marks 19.00/20.00
Question 1
Correct
MENU

a. R2 771 million
b. R2 229 million
c. R1 311 million 
d. R3 689 million
MENU
Question 2
Correct

Answer:
5

Question 3
Correct
MENU

The value of aggregate autonomous spending is
Answer:
35 000 000

Question 4
Correct
Government spending = 550
Exports = 330

Autonomous imports = 170
Investment expenditure = 120
Marginal propensity to save = 0,25
Answer:
4440

Question 5
Correct
MENU

a. only c
b. a, b and c 
c. a, c and d
d. only d
the multiplier.
Question 6
Correct
MENU

a. Acquiring new machinery and equipment for a firm is a low-risk investment because the interest rate is the only factor to consider
b. For an investment to be profitable, the interest rate on a loan has to exceed the expected return on new machinery for a firm.
c. When an expansionary monetary policy is applied, the opportunity cost of buying capital goods is higher than that of buying financial
assets.
d. Changes in the interest rate affect the decision to buy capital goods and financial assets. 
Question 7
Correct
MENU

Select one:
Question 8
Correct
In the Keynesian model with a government and foreign sector, an increase in government spending …
Select one:
a. increases both exports and imports.
b. decreases the equilibrium level of income.
c. increases the equilibrium level of income and decrease imports.
d. increases the equilibrium level of income. 
Question 9
Correct
MENU
Y = 10 000
C = 250 + 0.65Y
I = 600
G = 1 000
1 500 = 200 + mY
X = 300

iii. The aggregate expenditure in the economy is 1 950.00.
a. (i) and (iii) are correct.

b. (ii), (iii) and (iv) are correct. 
Question 10
Correct
Select one:
Question 11
Correct
MENU


a. [1] and [3]
b. [2] and [4]
c. [1],[2],[3] and [4]
d. [3] and [4] 
Question 12
Correct
Select one:
Question 13
Incorrect
MENU
Select one:
a. it illustrates the total real output supplied at each price level.
c. as the price level increases, total production decreases.
d. as the price of a good increase, quantity supplied increases. 
Question 14
Correct
When the South African Reserve Bank (SARB) decreases the interest rates, investment spending will increase, which will lead to an increase in
aggregate spending and aggregate demand in the economy. This chain of events is called …
Select one:
c. fiscal policy transmission mechanism.
d. transmission mechanism of contractionary fiscal policy.
Question 15
Correct


(e) Prices increase
Select one:

Question 16
Correct
MENU
Select one:
Question 17
Correct
Which of the following best demonstrate a movement that would result from the social relief grants offered to households that were
negatively affected by the COVID-19 induced lockdown?
Select one:
a. b to c on figure 3
b. b to c on figure 2
c. a to c on figure 4
d. b to c on figure 1 
Question 18
Correct
MENU
Select one:
Information
Question 19
Correct
MENU

Answer:
2

Question 20
Correct
Answer:
0.5

◄ Assessment 2
Jump to...
Assessment 4 ►
MENU 

State Finished
Marks 11.00/20.00
Question 1
Incorrect
The financial account is a component of the balance of payments. Which of the following transactions would be recorded in the account?
a. sales of machinery from South Africa to China

b. importing rubber from Thailand for the production of tyres in South Africa
c. South Africans purchasing shares on the JSE 
d. American Corporations purchasing land and buildings in South Africa
Question 2
Correct
e.
Question 3
Correct
MENU
a. net welfare gain
e. economic growth.
Question 4
Correct
an import tax of 15% is levied on the imported boots. What is the total value of the item imported in South African Rand?
a. R4 655,75
b. R698,36
c. R5 345,11 
d. R6 133,47
Question 5
Incorrect
MENU
Dashboard / Courses / UNISA / 2023 / Semester 1 / Value
Transaction ECS1601-23-S1
(R ‘000) / Online assessments / Assessment 2

a. (ii) is correct.
CA = X – M
Question 6
Correct
MENU
Question 7
Incorrect
MENU
/ 2023(tonnes/year)
Maize(tonnes/year)
Country A 125 80
Country B 133 100

125 C = 80 M
133 C = 100 M

Question 8
Correct
MENU
Dashboard
the / that
the SARB / achieve
uses to 2023 / this
Semester
a and b
b and c
c
b 
a, b and c
Question 9
Correct
Question 10
Correct
MENU


b. The large outflow of portfolio investment could be triggered by a ratings downgrade to junk status. 
d. The balance on the financial account for 2021 is -R24 295 million.
Question 11
Incorrect
MENU
Which of the following statements about the Keynesian model is correct?

a. Induced consumption changes when income distribution, wealth, tax and expectations change.
b. When total income increases, consumption increases by more than the increase in income. 
c. When the interest rate on a five-year fixed deposit increases, consumption will decrease.
d. Savings do not affect the size of the multiplier.
Consumption spending consists of two elements: induced consumption and autonomous consumption. Induced consumption is only
affected by changes in income. Changes in income distribution, wealth, tax and expectations about inflation only affect autonomous
consumption. Autonomous consumption is not affected by the level of income, so in this case consumption remains positive even if income
is zero.
When income increases, consumption increases by less than the increase in income. The additional portion of income left over is saved. Such
savings can then be saved and invested to earn returns (such as interest on a savings account or dividends from shares on the stock
market).
When the interest rate on a five-year fixed deposit increases, consumption will decrease because households will be willing to sacrifice part
of their income to earn a higher return on savings. This will encourage households to reduce their consumption.
Savings do affect the size of the multiplier because remember that (1-c) leaves us with the portion of income that is left after consumption.
In other words, s =1 - c (which is the marginal propensity to save). Refer to pages 118 and 134 of the prescribed book.
Question 12
Incorrect
a.
b.
c. 
d.

Question 13
Incorrect
MENU

The point labelled A2 represents…
a. autonomous consumption. 
b. autonomous investment.
d. equilibrium consumption.
e. autonomous aggregate spending.
A2 equals autonomous aggregate spending. It is autonomous consumption plus autonomous investment. See section 6.5 and figure 6-5 on
pages 122 of the prescribed textbook.
Question 14
Correct
MENU

Question 15
Correct
MENU

The value of the multiplier is_____.
a. 0,2.
b. 0,8.
c. 2.
d. 5 
The formula for the multiplier is 1/(1-c) , thus if c = 0,8 the multiplier is 1/(1-0.8)=5.
Question 16
Correct
A=C+I
C = 600 + 0,75Y
I = 200

b. a and b
c. a and c
d. b and c
e. c
0,75Y+ 200, thus A = 800 + 0,75Y.
Question 17
Correct
MENU

Question 18
Correct
is zero.
Question 19
Correct
MENU

a. Consumption spending is a variable larger than 1 in the simple Keynesian model.

b. Investment spending is larger and more constant than consumption spending.
c. Investment spending is smaller but consumption is more predictable than investment spending. 
d. The investment decision involves only the cost of motor vehicles.
e. There is a direct relationship between the expected return on investment spending and wages.
Consumption spending is the largest component of total spending; investment is more variable and less predictable than consumption
spending. The investment spending refers to the production and purchase of capital goods such as machinery, buildings and equipment and
not just motor vehicles. There is an inverse relationship between the interest rate and the expected return on investment spending.
Question 20
Incorrect

b. Consumer prices are expected to fall. 
d. The expectation of a future rise in the consumer price index.
discussed.
Jump to...
Assessment 3 ►
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State Finished
Marks 15.00/18.00
Question 1
Correct
a. Correlation between variables occurs when two variables have a relationship 

b. Causation between two variables proves correlation.
c. Causality between two variables always implies correlation.
Question 2
Correct
In the circular flow of income and spending in South Africa, spending by firms in the factor market becomes ________ households, while
________ households in the goods market becomes ________.
a. income to; spending by; income to firms 

b. spending by; income to; income to firms.
c. income to; income to; spending by firms
d. spending by; spending by; income to firms
Firms are primarily engaged in production. Therefore, firms will have to purchase the factors of production from households in the factor
market. Households need to be remunerated for the factors of production in the form of different types of income. This income of
households is then used to purchase goods and services in the goods market from firms, which then becomes income for firms. Exports an
addition or injection into the circular flow of income and spending in the domestic economy. See pages 6 and 7 in the prescribed book.
Question 3
Correct
MENU
Which one of the following is NOT a purpose of economic theory?

a. to describe what happens in the real world.

b. to help us to understand what is happening in all aspects of the real world.
c. to help us predict what will happen if something changes.
d. to serve as a basis for policy decisions.
e. to help us explain what is happening in the economy. 
Economic theory has three main purposes, namely;(i) to explain how different things are related in the complex real economic world, (ii)to
predict what will happen if something changes and (iii) to serve as a basis for the formulation and analysis of decisions on economic policy.
See pages 12 to 13 of the prescribed book.
Question 4
Correct
Which of the following statements is/are NOT an example of macroeconomics?
a) An increase in the general price level in the economy.

b) Shoprite (Africa’s largest supermarket retailer)'s decision to keep the price of basic goods unchanged even when inflation is rising.
c) The price of oranges at the supermarket.
a. a and b
b. a only
c. a, b and c
d. b and c 
Refer to the distinction between macroeconomics and microeconomics on page 2 of the prescribed textbook.
Information
MENU
Monthly
/ 2023 - 2020 1 / Monthly
years.

Question 5
Incorrect
What is the amount that the CEO spent per month on goods and services in 2020? Type in your answer
10500000

Question 6
Correct
MENU
Dashboard
a) / and
2023 / Semester
/ ECS1601-23-S1
d
a and b
a and d
c and d 
c
a and c
Question 7
Correct
Which one of the following statements is/are correct about the total demand for money?
a) It is not affected by the interest rate but by the income level only.
b) It is affected by both the income level and the interest rate level.
c) It is not affected by the income but by the interest rate only.
a. b and c
b. a
c. c
d. b 
The total demand for money is affected by both the income level and the interest rate level.
Question 8
Correct
MENU

a. Anyone who wishes to enter into transactions in a monetary economy has to hold money as a store of value.
b. The quantity of money demanded for transaction purposes depends on the interest rate.
c. The quantity of money demanded for speculative purposes is inversely related to the interest rate. 
d. The demand for money as an asset is also called the transactions demand for money.
e. The quantity of money demanded for speculative purposes is positively related to the interest rate.
Question 9
Correct
Suppose that South Africa demands L2 units of currency, which of the following will result in an increase in the demand for money?
a. The interest returns on nominal bonds falls. 

b. There is a decrease in the number of grant recipients in South Africa.
c. There is an increase in income taxes in South Africa.
d. There is an increase in the interest rate by the South African Reserve Bank to fight inflation.
Changes in the demand for money is derived from the transactionary and speculative factors. Changes in disposable income and interest
rates will affect the demand for money. See Section 2.5 of the prescribed book.
Question 10
Not answered
Marked out of 1.00
MENU
Dashboard
for / months.
/ this
UNISA
case,/ the
2023 / Semester
__________ variable. / Assessment 1
a. credit
b. flow
c. liquidity
d. stock
Question 11
Correct
MENU


(ii) store of value
a.
b. (i), (ii) and (iii) are correct. 
c.
(ii) is correct.
d. (iii) is correct.
e.
Question 12
Incorrect
MENU
Dashboard
the / Courses
money market, / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 1
the…….
(i) demand for active balances (L1) will increase and will be reflected in a rightward shift of the L1 curve.
(iii) total demand for money (L) will decrease and will be reflected in a leftward shift of the L curve.
a. (ii) and (iii) are correct 

b. (i) and (ii) are correct
d. (i), (ii) and (iii) are correct
Question 13
Correct
MENU
Dashboard
Coursesthis/ would
UNISAbe/illustrated
2023 / bySemester 1 / ECS1601-23-S1 / Online assessments / Assessment 1
which diagram?
a. [1]
b. [4] 
c. [2]
d. [3]
Question 14
Correct
MENU
Which one of the following does not pertain to fiscal policy?

a. The budget deficit

b. government spending cuts
c. tax increases
d. private investment 
e. The minister of finance
The main instrument of fiscal policy is the budget, (which is presented by the minister of finance) and the main policy variables are
government spending, (which includes public infrastructure spending), and taxation. Thus, private investment is not part of the fiscal policy
of the government but is driven by the private sector of the country.
Question 15
Correct
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.
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 the
interest she earns on her Old Mutual unit trusts. This illustrates the _____________ criterion for a good tax.
a. administrative simplicity
b. equity 
c. regressive
d. neutrality
Administrative simplicity refers to the ease with which a tax is enforced and collected while keeping the administrative and compliance costs
as low as possible. A tax that is simple to administer does not involve any complicated paperwork and collection processes. A tax that meets
these criteria should also be difficult for consumers to avoid or evade. An example of a tax that is easy to administer is value-added tax (VAT)
on non-essential goods and services. For example, when you buy a soft drink such as Coca-Cola (which is a non-essential good), VAT is
already included in its final price. Therefore, when you pay for the drink, you immediately pay VAT. A consumer cannot avoid this kind of tax,
as it is immediately collected upon purchase and it does not involve any complex paperwork.
A neutral tax does not distort the relative price of goods and services and the allocation of resources in an economy. This means that it
should have the least adverse effect on the welfare of society. Taxes affect the decisions to consume goods, save and invest, and also the
factors of production. A neutral tax does not create incentives for households and firms to change their behaviour.
Equity refers to the fair distribution of a tax burden, based on consumers’ ability to pay the tax in question and what they stand to benefit.
By the ability to pay, we mean that taxes should be collected from those with an income. For example, South Africa uses a progressive
taxation system to promote equity and redistribute income from the rich to the poor. A progressive taxation system involves levying higher
tax rates on those members of society with higher incomes and more assets. The lowest income groups in South Africa are tax-exempt and
should earn a certain level of income to be taxed. A regressive tax increases when income decreases, meaning that the tax takes a larger
portion of the income from low-income earners. Therefore, this type of tax does not comply with the equity principle because it reduces the
welfare of low-income households. It is not a criterion of a good tax, but rather a category of tax.
Question 16
Correct
MENU

a. When the government spends more money than it has, it has a budget surplus.
b. If the government spends less money than its revenue, this is called a budget deficit.
c. Government revenue comprises only taxes and borrowings.
d. When the central bank buys government bonds to finance government expenditure, this is called inflationary financing. 
Government spending in the economy is determined by the revenue of the government (i.e. Taxes, Borrowings and income from property
owned). When the government spends more money than it collects from revenue. The government is said to be running a budget deficit
and the converse is a government surplus. Refer to section 3.5 of the prescribed textbook.
Question 17
Correct
MENU
Income (R) 5 000 1 500
PAYE (R) 1 500 200

a. (iii) is correct.
b. (i) and (iii) is correct. 
c. (i), (ii) and (iii) are correct.
e. (i) and (ii) are correct.

Question 18
Correct
MENU
If the government decides to increase value-added tax (VAT) from 15 to 16%, what impact would this have on consumers?
a. Tax revenue generated from an increase in VAT will also increase spending on public healthcare.
b. VAT will only affect producers and not consumers.
c. A higher VAT rate will make households with the lowest incomes worse off. 
d. An increase in the VAT rate does not affect consumers’ decisions to save and invest.
An increase in the VAT rate from 15 to 16% will affect producers and consumers. Once VAT increases, it increases the cost of producing
goods and services for consumers. The operating expenses associated with running a firm (such as telephone and internet, servicing of
machinery and equipment, accounting services, cleaning, and maintenance) increase. This affects the final price of goods and services
provided. Consumers are then forced to pay higher prices to producers so that they can remain profitable. However, the buying power of
consumers goes down because higher prices due to an increase in VAT reduce disposable (after-tax) income.
An increase in tax revenue collected does not guarantee that it will be used for its intended purposes. Public funds can be misallocated or
used wastefully. Although it is important to have enough funds to spend on public healthcare, collecting more revenue from VAT does not
guarantee that more will be allocated for spending on healthcare. It depends on how public funds are managed and distributed. An increase
in VAT does affect consumers’ decisions to save and invest because higher taxes reduce the disposable income available to put away for
future use. This depends on the income earned and expenses in each household. This affects the disposable income available to put away.
Someone with fewer expenses and a high income may have enough left over to save and invest after consumption, even when VAT
increases.
Saving and investing means you temporarily reduce your buying power so that you increase it in the future. Low- and high-income earners
are not always able to do this. Low-income earners are the most severely affected when VAT increases because most of their income is spent
on consuming basic goods. This means that their buying power decreases further when VAT goes up, leaving less and less income for saving
and investing. Therefore, the welfare of those with the lowest incomes is reduced and low-income groups are worse off.
Jump to...

MENU 

State Finished
Marks 15.00/20.00
Question 1
Incorrect
An open-market policy by the South African Reserve Bank may involve a) selling of government stock to increase the liquidity deficit of the
banks. b)buying of government stock to increase the liquidity deficit of the banks. c)selling of government stock to contribute lower interest
rates. d) buying of government stock to contribute to lower interest rates.
a. only a and c are correct 

b. only a and d are correct
c. only b and c are correct
d. only b and d are correct
If the SARB wishes to create or enlarge the bank’s liquidity shortage, it sells government bonds to the banks, thereby reducing their cash
reserves. This will force the banks to make use of the SARB financing facilities through repurchase agreements. If the SARB wants to
stimulate the creation of bank deposits, it can use the open market policy to ease liquidity conditions and lower interest rates by buying
government bonds.
The correct answer is: only a and d are correct
Question 2
Correct
MENU

towards taxes.
taxes.
Question 3
Correct
Which of the following best describes a household?
a.
A group of people who work together.
b. A family that lives together and makes economic decisions. 
c. Any individual who make economic decisions for other people.
d. A basic economic unit that utilises factors of production.

Refer to section 3.5. In economics, households can be best described as a family or people who live together and make joint economic
decisions.
A family that lives together and makes economic decisions.
Question 4
Correct
MENU

a. Eskom is an example of a nationalised entity.

b. Nationalisation will attract foreign direct investment, which will increase foreign reserves.
c. The transfer of ownership from a private enterprise to the government is called nationalisation. 
d. Nationalising an organisation would increase its efficiency
Nationalisation and privatisation are discussed in box 3-1 on page 51 of the textbook. Nationalisation is the transfer of private enterprise to
the government. Eskom is a state-owned enterprise and not an example of nationalisation because from its inception the government was
and still is the only shareholder of Eskom.
The correct answer is: The transfer of ownership from a private enterprise to the government is called nationalisation.
Question 5
Correct
The correct answer is: The effect on the Rand is indeterminate and the quantity of Dollars will rise.
Question 6
Correct
MENU
Dashboard
that the GDP/has
a. expenditure 
b. production
c. income
d. nominal prices

expenditure
Question 7
Incorrect
Which of the following statements is correct about an open economy?
a. The introduction of a foreign sector in the economy will cause the size of the multiplier to increase.
b. When foreign goods bought in China exceed goods produced and sold to other foreign countries, it implies that imports exceed
exports and result in a deficit in the trade balance.
c. The slope of the consumption function will become larger.
d. The equilibrium level of income will be higher. 
Goods bought in China represent imports. Since money is flowing out of the economy, this constitutes a leakage. While goods produced
and sold to other foreign countries represent exports. Since money is flowing into the domestic country, this constitutes an injection.
Imports will exceed exports and there will be a deficit in the trade balance. Please see page 7 for the discussion of leakages and injections.
Firstly, When the foreign sector is introduced, the slope of the consumption function is reduced further. As a result, the multiplier becomes
even smaller. Please see example on page 156 of the prescribed book. Secondly, due to the multiplier being small as a result of the addition
of marginal propensity to import to the slope of the consumption function, the equilibrium level of income will be lower than before the
introduction of the foreign sector.
The correct answer is: When foreign goods bought in China exceed goods produced and sold to other foreign countries, it implies that
imports exceed exports and result in a deficit in the trade balance.
Question 8
Correct
MENU
The value of the multiplier is necessarily increased if

a. the marginal propensity to consume increases and the marginal propensity to import falls. 
b. the marginal propensity to consume falls and the tax rate falls.
c. the marginal propensity to consume and the marginal propensity to import rise.
d. the income tax rate falls and the marginal propensity to import rise.
In the discussion of the previous question, we explain that the multiplier will increase when the marginal propensity to consume increases,
when the tax rate decreases and when the marginal propensity to save decreases.
When the marginal propensity to import increases, it means that a larger part of an increase in income is not spent on goods produced in
our economy, thus decreasing the multiplier effect of any increase in autonomous spending. Thus, the multiplier will increase when the
marginal propensity to import decreases. This relationship is illustrated by the following formula from section 6.7: ∝ =1/(1-c(1-t)+m) + - -
Where c is the marginal propensity to consume, t is the tax rate and m is the marginal propensity to import. The signs underneath each
symbol indicate its relationship with the multiplier (α). c has a positive relationship with α (see the + sign under c).
A positive relationship means that an increase in c will increase α. Conversely t and m have a negative (or inverse) relationship with α. This
means that if the tax rate or the marginal propensity to import increase then the multiplier will decrease in size. The marginal propensity to
save also has a negative relationship with the multiplier since an increase in s must mean a decrease in c, since c + s = 1. The sizes of the
changes are not mentioned in the, therefore we can only assume that the value of the multiplier increases when both variables mentioned in
an option has a positive effect on the size of the multiplier. An increase in the marginal propensity to consume and a decrease in the
marginal propensity to import will definitely increase the multiplier, regardless of the size of the changes in the propensities.
The correct answer is: the marginal propensity to consume increases and the marginal propensity to import falls.
Information
CASE STUDY 1
MENU
Transition.

Question 9
Incorrect
MENU
23600000
 rand.

Question 10
Correct
MENU
a. figure 1 
b. figure 2
c. figure 3
d. figure 4
Question 11
Correct
MENU

Question 12
Correct
challenge by _____.
Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct
(a) a public good
(d) externalities
a. a, b and c
b. b and d
c. d and c 
d. b, c, and d
Question 15
Correct
MENU
Dashboard
Question 16
Correct

Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct

Question 18
Correct

a. (a), (b), (c), and (e)

b. (c) and (e)
c. (d) and (e) 
d. (a), (d), and (e)
Question 19
Correct
MENU
curve.

Question 20
Incorrect
(ii) Capital
(iii) Labour
a. (i), (ii), and (iii) 

b. (ii) and (iii)
c. (i)
d. (i) and (iii)

◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 17.00/20.00
Question 1
Correct
MENU

a. R1 311 million 
b. R2 771 million
c. R2 229 million
d. R3 689 million
MENU
Question 2
Correct

Government spending = R550
Exports = R330
Autonomous consumption = R280
Autonomous imports = R170
Investment expenditure = R120

What is the value of the multiplier?
Answer:
4

Question 3
Incorrect
MENU

Consumption function = 15 million + 0,75 ( 40 million)
Net export = 10 million
Answer:
320 million

Question 4
Correct
a. a fall in autonomous consumption will raise the multiplier and decrease aggregate expenditure
b. a fall in autonomous imports will raise the multiplier and aggregate expenditure will rise.
c. an increase in the tax rate will increase the multiplier and raise aggregate expenditure
d. a fall in the marginal propensity of imports will raise the multiplier and aggregate expenditure will rise 
Question 5
Incorrect
MENU


Answer:
600 000 000 000

Question 6
Correct
As a result of recessionary fears due to the Covid-19 pandemic, the South African government implements an increase in spending and a
reduction in tax rates on income. In the expanded Keynesian model, the impact on Aggregate Expenditure (AE) is described as … .
a. the AE curve will get steeper and will shift downwards

b. the AE curve will get steeper and shift upwards 
c. the AE curve will get flatter and will shift upwards
d. an upward shift in the AE curve only
See section 8.1. of the prescribed book.

Question 7
Correct
MENU
Select one:
Question 8
Correct
As income rises following an increase in autonomous net exports, induced imports will _____.
Select one:
a. decrease
b. increase by the same value as increase in income
c. remain unchanged
d. increase 
Question 9
Incorrect
MENU
Y = 10 000
S = -250 + 0.65Y
I = 500
G = 1 100
m=0,13


c. (i) and (iii) are correct.
Question 10
Correct
Select one:
Question 11
Correct
MENU

Based on the information in the table, which of the following statement is correct regarding the aggregate demand (AD) curve?
a. 
The aggregate demand (AD) curve will shift to the left.
b. An upward movement along the AD curve will be reflected.
c. A downward movement along the AD curve will be reflected.
d. The aggregate demand (AD) curve will shift to the right.

The decision taken by the South African Reserve Bank to increase the repo rate to 4,25% will increase the interest rate (prime rate) which
commercial banks use to borrow its clients. The increase in the interest rate led to direct decline in the investment spending then aggregate
demand decreases which lead decrease in AD that is shown by the leftward shift of the AD. Refer to page 188 of the textbook.
An upward and downward movement of the AD curve emanates from an increase and decrease in the level of prices. See section 9.1 in the
prescribed book.
Question 12
Correct
MENU

Select one:

Question 13
Correct
MENU

Select one:
Question 14
Correct
Select one:
Question 15
Correct
MENU

Select one:
Question 16
Correct
Select one:
Question 17
Correct
MENU
Select one:
a. figures 1 and 2
b. figure 1 
c. figures 2 and 4
d. figure 3
Question 18
Correct
Select one:
Information
MENU
Question 19
Correct
Answer:
65 000 000

Question 20
Correct
MENU
The aggregate autonomous expenditure after the introduction of government spending is R…

Answer:
60 000 000

◄ Assessment 2
Jump to...
Assessment 4 ►
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Started on Tuesday, 28 March 2023, 12:02 PM

State Finished
Completed on Tuesday, 28 March 2023, 12:58 PM
Marks 16.00/20.00
Question 1
Correct
Question 2
Correct
MENU
e.
Question 3
Correct
a. economic growth.
d. colonisation
Question 4
Correct
MENU

exchange rate.
Question 5
Correct
export to SA.
production.
Question 6
Correct
MENU

a. a and c
b. b and d
c. b, c and d 
d. only a and d
Question 7
MENU
Incorrect

Which country has an absolute advantage in the production of drones?
a) Russia
b) Both countries
c) Ukraine
d) No countries have an absolute advantage
a and b
a.
b 
Russia has an absolute advantage in the production of drones. Refer to pages 65-68 of the prescribed book, page 61 in Part 1 of the study
guide, and pages 44-45 in Part 2 of the study guide. This will provide details that distinguish between absolute and comparative advantage.
Question 8
Incorrect
MENU
Dashboard
the / that
the SARB / achieve
uses to 2023 / this
Semester
a and b
b and c
c
b
a, b and c 
Question 9
Correct
Question 10
Correct
MENU
The following question is based on the Lorenz curve:

Source: World Bank (2022)
i. Both Argentina and Columbia have equal income distribution.

ii. Argentina has a more unequal income distribution compared to Columbia.
iii. Argentina has a more equal income distribution compared to Columbia.
iv. Columbia has a lower Gini coefficient than Argentina.
v. Columbia has a higher Gini coefficient than Argentina.

c. (iii) and (v) are correct. 
The Lorenz curve illustrates the income distribution of a country. The further away the cumulative income is from the 45-degree line, the
more unequal is the distribution of income. In addition, the Lorenz curve is related to the Gini coefficient. The further right the curve is, the
larger the Gini coefficient. See Section 5.6 of the prescribed book.
Question 11
Correct
MENU


Question 12
Correct
c. The marginal propensity to consume is 0.846. 
Question 13
Correct
MENU


a. only a
b. a and b
c. only c
d. b and d 
Question 14
Correct
MENU


Question 15
Correct
MENU
Dashboard
Use / Courses
a Keynesian / UNISA
to calculate/the
Online assessments
for the question:

The value of the multiplier is …
a. 1,25.
b. 1,333.
c. 1,538.
d. 1,818.
e. 2,5. 
α =1/1- c]. Substitute the information into the equation: α =1/[1-0,6 ] = 1/0,4=2,5, meaning that the value of the multiplier is 2,5.
Question 16
Correct

b. a and b
c. b and c
d. a and c
Question 17
Incorrect
MENU
b. It means that 60% of total income earned is saved. 
d. It means that 60% of an increase in income will be used for consumption, while the remaining 40% will be saved.
Q6
Question 18
Incorrect
b. households will consume R80 if their disposable income is zero and will consume 0,75 of any increase in disposable income they
receive.
d. households earn R80 and spend three quarters of their income. 
Question 19
Correct
MENU

is zero.
Question 20
Correct
The consumption function shows…
a. that autonomous consumption is an upward sloping curve.

b. that households consume more when exchange rates are high.
c. that consumption depends primarily upon the level of business investment.
d. the level of autonomous consumption is independent of the level of income. 
e. that savings may be zero if the population is lazy.
Consumption spending is divided into two components, namely an autonomous component which is independent of income and an
induced component which is determined by the level of income.
Jump to...
Assessment 3 ►
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State Finished
Marks 14.00/18.00
Question 1
Correct
company, where she uses capital and labour. After completing projects, the payment for services will remunerate _______to ________in the
________ market.
a. wages; labour; goods

b. interest; capital; factor 
c. wages; entrepreneurship; factor
d. wages; capital; factor
prescribed book.
Question 2
Correct
MENU
Which of the following statements is correct about opportunity cost?

(i) Opportunity cost is a consequence of abundance.
(ii) When Karabo decides to watch Netflix all day instead of studying, his opportunity cost is the improvement of his marks in
Economics that he could get from studying more.
(iii) Opportunity cost is only measured in terms of money.
(iv) Not all economic choices have an opportunity cost.
a.
(i), (iii) and (iv) are correct.
b. ii) is correct. 
c.
(ii) and (iv) are correct.
Opportunity cost is a result of scarcity, where limited resources are available and wants are infinite. The opportunity cost is the highest
foregone valued alternative for an economic activity. Consequently, there is an opportunity cost (or trade-off) to all economic activities. See
Question 3
Correct
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. a, b, c and d 
b. b, c and d
c. b and c
d. a and b
leakages are imports, savings, and taxes. Injections are exports, investment, government spending and household consumption.
Question 4
Correct
MENU
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
Dashboard
at / Courses
a level to ensure / four
that all UNISA / 2023
stores / Semester
remained 1 /OnECS1601-23-S1
profitable. / Online
which area of study assessments
in economics does /this
Assessment
focus? 1
a. macroeconomics
b. international economics
c. microeconomics 
d. development economics
The four retail stores (Pick n Pay, Spar, Checkers and Shoprite) coming together to agree on a price level for gas heaters is called a cartel. The
purpose of a cartel is to increase the profitability of firms and to prevent competitors from entering the market for certain goods. This
scenario applies to microeconomics because it deals with the interaction of firms in a market and the effects of their actions on prices.
Macroeconomics focuses on the performance of the economy as a whole by providing an overall view of the economic system of a country.
This area of economics focuses on total production, income, spending, economic growth, employment and unemployment, inflation, price
levels and the balance of payments.
International economics focuses on the financial flows, exchange rates and differences in productive resources between countries. It is also
concerned with the role of institutions affecting transactions between countries. For example, international economics looks at how a
multinational company (for example Vodafone) investing in South Africa affects employment, technology and skills transfer.
Development economics focuses on improving the economic, social and fiscal conditions in developing countries. It also highlights the
differences between developed and developing countries, and how these differences can be mitigated.
Information
Monthly Salaries - 2020 Monthly Salaries - 2021
years.

Question 5
Correct
MENU
4,76

Question 6
Correct

b. speculative; active balance
d. transaction; active balance 
Question 7
Incorrect
a. b
b. a and d
c. b and d 
d. a
e. a, c and d

Question 8
Correct
MENU
a. creation of money will slow down as demand for loans declines. 

b. quantity of money supply will increase by percentage increase of repo rate.
d. price of interest-bearing securities or bonds in South Africa will increase.
Question 9
Correct
Which of the following statements is/are correct about the difference between direct and indirect financing?
a) Indirect financing takes place when the deficit units borrow directly from the surplus units with the assistance of a financial intermediary.
b) Direct financing takes place when the deficit units borrow directly from the surplus units without the assistance of a commercial bank.
c) Indirect financing takes place when surplus units deposit funds with financial intermediaries and the deficit units borrow from South
African Reserve Bank.
a and b 
a
b and c
a and c
b
Direct financing takes place when deficit units borrow directly from surplus units without the assistance of a financial intermediary. Indirect
financing takes place when surplus units deposit funds with financial intermediaries and deficit units borrow from financial intermediaries.
Question 10
Incorrect
MENU
Dashboard
its / This
operations. Courses / UNISAof/ the
is an example 2023 / conducting
SARB Semester 1 its
/ …ECS1601-23-S1
role. / Online assessments / Assessment 1
a. national payments
b. lender of last resort 
c. bank supervisory
d. banker of other banks
prescribed book.
Question 11
Correct
MENU


(ii) store of value
a. 
(i), (ii) and (iii) are correct.
b. (iii) is correct.
c.
d. (ii) is correct.
e.
Question 12
Incorrect
MENU
Dashboard
Coursesthe/ amount
UNISA of
/ money
2023 /that
Semester 1 / to
people wish ECS1601-23-S1
hold for / Online assessments / Assessment 1
(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.

b. (i), (ii) and (iii) are correct
c. (ii) and (iii) are correct
e. Only (i) is correct 
Question 13
Correct
MENU
Dashboard
between 3% /andCourses / UNISA
6%. In the money /market,
2023 this
/ Semester
would be1illustrated
/ ECS1601-23-S1 / Online assessments / Assessment 1
by which diagram?
a. [3]
b. [2] 
c. [4]
d. [1]
Question 14
Correct
MENU
Dashboard
Tshepiso / aCourses
earns monthly/ salary
UNISA / 2023
of R30 000, /is levied
Semester 1 / ECS1601-23-S1
an income tax rate of 25%/ and
Online assessments
is also / Assessment
levied a capital 1 of 18% on the
gains tax rate
a. equity 
b. regressive
c. administrative simplicity
d. neutrality
Question 15
Correct
___________________ financing.
a. decreases; deflationary
b. increases; inflationary 
c. decreases; inflationary
d. increases; direct
e. increases; deflationary
Question 16
Incorrect
MENU
Dashboard
they / Courses produce
do not necessarily / UNISA / 2023
________ / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 1
outcomes.
a. equitable; efficient 
b. efficient; equitable
c. efficient; profitable
d. quantitative; qualitative
e. profitable; equitable
Question 17
Correct
a. alcohol, tobacco, fuel, and a few luxury goods 

b. alcohol and tobacco only
c. fuel and a few luxury goods only.
d. income and wealth
Excise duty is levied on alcohol, tobacco, fuel, and a few luxury goods. Refer to page 59 in the prescribed textbook.
Question 18
Correct
a. general
b. proportional
c. regressive
d. progressive 
Jump to...
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MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
Use the table below to find the total comprehensive measure of money for the year 2013…
a. R87 014 million

b. R549 323 million
c. R636 337 million
d. R2 513 865 million 
e. R1 132 039 million
To calculate the most comprehensive measure of money (M3) M2 needs to be added to the long-term deposits: 2 051 308 (M2) + 462 557
(long term deposits) = 2 513 865 M3 is thus equal to 2 513 865 for the year 2013.
The correct answer is: R2 513 865 million

Question 2
Correct
MENU

a. income and wealth.

b. alcohol and tobacco only.
c. alcohol, tobacco, fuel, and a few luxury goods. 
d. fuel and a few luxury goods only.
Excise duty is levied on alcohol, tobacco, fuel, and a few luxury goods and is also known as Sin tax.
The correct answer is: alcohol, tobacco, fuel, and a few luxury goods.
Question 3
Correct
….…. is an example of a stock variable, while ………… is an example of a flow variable.
a. Balance on savings account; assets

b. Wealth; investment 
c. Profit; demand for labour
d. Gold production; unemployment
Wealth is an example of a stock variable, while investment is an example of a flow variable. A stock variable is measured at a specific point in
time. When the total value of your wealth (such as the market value of your house and the balance in your savings account) is measured at a
specific date, say on 31 December 2022, this is an example of a stock variable. A flow variable is measured over a period of time, say 12
months or 5 years. For example, the value of your retirement fund over a 5-year period, is an example of a flow variable.
The correct answers are: Wealth; investment, Profit; demand for labour
Question 4
Correct
MENU
Which one of the following statements is appropriate about government action to stimulate economic activities?
a. Increasing both taxation and the repo rate.

b. Decreasing both repo rate and taxation.
c. Decreasing taxation. 
d. Decreasing the repo rate.
Government will decrease taxation to stimulate economic activities.
The correct answer is: Decreasing taxation.
Question 5
Correct
Rand appreciates.
Yuan depreciates.
The correct answer is: The price of goods that Sandile’s business imports will decrease in terms of the Rand.
Question 6
Correct
MENU
Dashboard
that the GDP/has
a. expenditure 
b. production
c. income
d. nominal prices

expenditure
Question 7
Correct
In the Keynesian model, exports…
a. remain unaffected by changes in domestic income. 

b. increase when income increases.
c. decrease when income decreases.
d. depend on the interest rate.
e. depend on government policy.
Exports are autonomous and are not influenced by the level of domestic income. It is influenced by economic conditions in the rest of the
world, our international competitiveness and the exchange rate.
The correct answer is: remain unaffected by changes in domestic income.

Question 8
Correct
MENU

a. a decrease in net exports will decrease the equilibrium level of income 

b. an increase in the tax rate will increase the size of the multiplier
c. a change in the tax rate has no impact on the size of the multiplier
d. an increase in net exports will decrease the equilibrium level of income
A decrease in net exports will decrease aggregate spending, leading to a fall in the equilibrium level of income. An increase in the tax rate
will decrease the size of the multiplier. An increase in net exports will increase the equilibrium level of income.
The correct answer is: a decrease in net exports will decrease the equilibrium level of income
Information
CASE STUDY 1
Transition.

Question 9
Incorrect
MENU
20900000
 rand.
Question 10
Correct


Question 11
Correct
MENU
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)

Question 12
Correct


Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct
(a) a public good

(d) externalities
a. a, b and c
b. b and d
c. d and c 
d. b, c, and d
Question 15
Correct
MENU
Dashboard
Question 16
Correct
a. Economic growth.
d. Price stability.
Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Correct
a. Point a
b. Point b 
c. Points a and c
d. Point c
Question 18
Correct
MENU

b. (ii) and (iii)
c. (ii)
d. (i) and (iii)
e. (ii) and (i) 

Question 19
Correct
a. (a), (b), (c), and (e)

b. (c) and (e)
c. (d) and (e) 
d. (a), (d), and (e)
Question 20
Correct
MENU
Dashboard
change?

◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 19.00/20.00
Question 1
Correct
a. lower the interest rate level.
b. buy government bonds.
c. increase the repo rate. 
d. increase the quantity of money.

Question 2
Correct
MENU

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
a. 1.74
b. 13.55
c. 8.7
d. 15.68 
Question 3
Correct
Which of the following best describes the consumer price index (CPI) and producer price index (PPI)?
a. PPI changes are linked to the cost of living, while CPI is linked to the cost of production.
b. PPI calculates the prices of goods only, while CPI excludes intermediate goods. 
c. An increase in PPI will lead to a decrease in CPI, while a change CPI will not affect PPI.
d. PPI calculates the prices of goods and services, while CPI measures services only.

Question 4
Correct
MENU

c. interest rates; leftward shift of the aggregate demand curve
Question 5
Correct
In response to the COVID-19 pandemic, countries injected trillions of dollars into their economies to provide relief to households and firms.
This response is an example of ... policy, which can result in ... inflation, ceteris paribus.
a. contractionary; demand-pull
b. contractionary; cost-push
c. expansionary; demand-pull 
d. expansionary; cost-push

Question 6
Correct
MENU
This question is based on the following table, which shows information about the Consumer Price Index (CPI) for country Z:
Month and year CPI
November 2016 98,5
December 2016 100
February 2018 103,4
March 2018 104,5
February 2019 107,8
March 2019 108,8
a. Inflation rate for March 2019 vs February 2019 is -0,9%.
b. Inflation rate for March 2019 vs March 2018 is 4,1%. 
c. November 2016 is the base year.
d. Inflation rate for 2016 is 1,5%.
Question 7
Correct
unemployment rate is _____ than full employment.
a. lower; higher
b. higher; lower
c. lower; lower.
d. higher; higher 
Question 8
Correct
MENU
Suppose that real GDP for 2009 was 1 000 and the rate of economic growth between 2009 and 2010 was 5%, what is real GDP for 2010?
a. 1 050 
b. 1 005
c. 950
d. 1 500
We can calculate the real GDP for 2010 as follows:

Real GDP2010 = Real GDP2009 x (1 +0,05)
Real GDP2010 = 1 000 x (1 + 0,05)
= 1 000 x 1,05
= 1 050.
Question 9
Correct
a. downswing
b. trough 
c. upswing
d. peak
Question 10
Correct
a. Frictional unemployment is caused mainly by political frictional which gives rises to lower economic growth.
b. Structural unemployment can be attributed mainly to a temporarily decline in the aggregate demand for goods and services.
c. Seasonal unemployment is usually associated with economic recessions.
d. An increase in the aggregate demand for goods and services can reduce cyclical unemployment. 

Question 11
Correct
MENU
Dashboard
due / that
to the fact Courses / UNISA
the skills / 2023 are
she possesses / Semester
obsolete.1This
/ ECS1601-23-S1
is an example of /… Online assessments / Assessment 4
a. frictional unemployment
b. structural unemployment 
d. cyclical unemployment
Question 12
Correct
a. subsistence farming
b. drug smuggling
c. increased labour force 
Question 13
Correct
MENU
Dashboard / Courses
b. cyclical unemployment.
c. frictional unemployment.
d. seasonal unemployment.
workers.
Question 14
Correct
Answer:
28.33%

Question 15
Correct
Suppose Zimbabwe’s population comprise 23 000 000 people who are unemployed, 18 000 000 students, 15 000 000 home-maker, 28 000
000 employed, 17 000 000 not economically active, and 50 000 000 people who are not in the age category 15 to 65 years. What does
Zimbabwe’s labour force population equal?
Answer: 51 000 000 

Question 16
Incorrect
MENU

2019 2020 2019 2020
Answer:
4.5

Question 17
Correct
Answer:
25 000 000

Question 18
Correct
MENU

2019 2020 2019 2020
Answer:
-3.57%

Question 19
Correct
a. c) and (d)
b. a) and (d)
c. a) and (c) 
d. a), (b) and (c)
Question 20
Correct
MENU
a. Both will decrease.

b. Both will increase.
c. The unemployment rate will decrease and the inflation rate will increase.
◄ Assessment 3
Jump to...
Assessment 5 ►
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State Finished
Marks 16.00/20.00
Question 1
Correct
Answer:
5

Question 2
Correct
MENU
If the government wishes to increase the equilibrium level of income by R250 million, it should ...
a. increase the tax rate.
b. decrease government spending by R250 million.
c. 
increase government spending by less than R250 million.
d. increase government spending by more that R250 million.
e. decrease government spending by R250 million, divided by the multiplier.

Government spending (G) in the Keynesian model is assumed to be autonomous and independent from the level of income (Y). It forms part
of autonomous spending in the Keynesian model. Thus, for the equilibrium level of income (Y) to increase by R250 million, the multiplier in
the model must be multiplied by an amount less than R250 million of government spending (G). The equilibrium level of income (Y) is
determined by multiplying the level of autonomous spending by the multiplier. See pages 164 to 166 in the prescribed book.
Question 3
Correct
MENU

a. a, c and d
b. only c
c. only d
d. a, b and c 
the multiplier.
Question 4
Incorrect
MENU


Answer:
115000000000

Question 5
Correct
MENU
Dashboard
and / Courses
R50 billion / UNISA
b. R365 billion
c. R167.5 billion
d. R150 billion
Question 6
Correct
MENU

Export = R8 000 000

Import = R8 000 000
Answer:
40 000 000

Question 7
Incorrect
Y = 10 500
S = -250 + 0.65Y
I = 500
G = 1 100
2 000 = 200 + mY


Question 8
Correct
MENU

Select one:
Question 9
Correct
a. expansionary fiscal policy
b. expansionary monetary policy.
c. contractionary fiscal policy.
d. contractionary monetary policy. 

Question 10
Correct
MENU
Select one:
Question 11
Correct
Select one:
Question 12
Correct
MENU

Select one:
Question 13
Correct
Select one:
Question 14
Correct
MENU

Select one:

Question 15
Correct
MENU
Select one:
a. figures 1 and 2
b. figure 1 
c. figures 2 and 4
d. figure 3
Question 16
Incorrect
Select one:
a. it illustrates the total real output supplied at each price level. 
c. as the price level increases, total production decreases.
d. as the price of a good increase, quantity supplied increases.
Question 17
Correct
MENU
Select one:
Question 18
Correct

(e) Prices increase
Select one:

Information
MENU
Question 19
Correct
Answer:
0.5

Question 20
Incorrect
MENU

Answer:
120 000 000 000

The diagram illustrates a graph for the Keynesian model. The graph shows aggregate spending in an economy with a government sector
(see Figure 7-2, page 141 in the prescribed textbook). Furthermore, it also indicates two equations of aggregate spending: (i) A = C+I, where
C+I = 40+0,5Y and (ii) A = C+I+G, where C+I+G=60+0,5Y. To be able to answer the question (s) you need to understand total consumption
spending, multiplier, autonomous aggregate spending and the equilibrium level of income formulas.
◄ Assessment 2
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Assessment 4 ►
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State Finished
Marks 11.00/20.00
Question 1
Incorrect
price decrease on the foreign exchange market?
a. The supply of Dollars will increase and the Rand will appreciate. 
c. The demand for Dollars will decrease and the Rand will appreciate.
Question 2
Correct
MENU
Question 3
Correct
Question 4
Incorrect
MENU
isDashboard
Courses France
/ UNISA
by how much
a. US$6 027,73
b. US$1 506,93
c. US$4 520,80 
d. US$414 750
Question 5
Incorrect
MENU
Dashboard / Courses / UNISA / 2023 / Semester 1 / Value
Transaction ECS1601-23-S1
(R ‘000) / Online assessments / Assessment 2

a. (ii) is correct.
c. (ii) and (iv) are correct. 
CA = X – M
Question 6
Incorrect
MENU

a. a and c
b. b and d 
c. b, c and d
d. only a and d
Question 7
MENU
Correct

a. a and c
b. b and d
c. a, b, c and d
d. only b and c 
Question 8
Correct
MENU
Dashboard
economy and/ that
Courses / UNISA
of other / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 2
countries?
Question 9
Correct
b. inflation rate.
prescribed book.
Question 10
Incorrect
MENU


b. The large outflow of portfolio investment could be triggered by a ratings downgrade to junk status.
d. The balance on the financial account for 2021 is -R24 295 million. 
Question 11
Incorrect
MENU


d. If the marginal propensity to consume is 0.9 and the income level is 200,the level of induced consumption is 180.
e. Income is the most important determinant of the level of investment. 
Question 12
Correct
a.
b.
c.
d. 

Question 13
Incorrect
MENU
spending:
a. a and c
b. only a
c. only c 
d. b and d
MENU
Question 14
Correct
Based on the diagram above, what is the equilibrium level of income?
a. R700 billion
b. R800 billion
c. R900 billion 
d. R1 100 billion
The equilibrium level of income (Y0) occurs at the intersection of A = Y and A = C + I as indicated in the diagram below:
Where A = Y and A = C + I intersect, aggregate spending and total production (income) are equal to R900 billion. At this point, the economy
is in equilibrium.
Question 15
Correct
MENU
Dashboard
Use / Courses
a Keynesian / UNISA
to calculate/the
Online assessments
for the question:

The value of the multiplier is …
a. 1,25.
b. 1,333.
c. 1,538.
d. 1,818.
e. 2,5. 
α =1/1- c]. Substitute the information into the equation: α =1/[1-0,6 ] = 1/0,4=2,5, meaning that the value of the multiplier is 2,5.
Question 16
Correct
spending will …

𝛼=1/1−𝑐
∴ 𝛼=11−0.5
∴𝛼=2
Increase in GDP
=40

Question 17
Correct
MENU

Question 18
Correct

discussed.
Question 19
Correct
MENU

Dashboard
a) / Courses
By definition, income is/ always
UNISAequal
/ 2023 / Semester
to production, 1 there
but / ECS1601-23-S1 / that
is no guarantee Online assessments
all income will be/ spent.
Assessment 2
b) Equilibrium occurs when none of the participants in the economy have any incentive to change their behaviour.
c) When spending is equal to income, then the demand for goods and services is greater than the available supply.
d) Savings are a leakage in the circular flow of production, income, and spending.
a. a and b
b. c
c. a, b and d 
d. a, b and c
When spending is equal to income, then the demand for goods and services is equal to the available supply. This means that the economy is
in equilibrium. However, when the demand for goods and services is greater than the available supply, it means there is an excess demand
for goods and services. When the available supply is greater than the demand for goods and services, there is an excess supply of goods and
services in the economy. Refer to section 6.1 in the prescribed textbook.
Question 20
Incorrect
Which of the following is a determinant of investment?
a. cost of capital goods

b. taxation
c. savings
d. level of national income 
The cost of capital goods is a determinant of investment. The cost of capital goods is compared to the expected revenue (and profit) to be
generated from them. By capital goods, we refer to machinery and equipment needed for producing goods and services.
The higher the expected return (revenue and profit), the greater the level of investment will be. Taxation is deducted from the returns on
capital goods. In other words, taxes are deducted from the profits generated by capital goods. In some cases, when taxes are very high, they
may discourage investment in the local economy. This results in people looking outside the domestic economy to invest in other countries
with relatively lower tax rates.
Savings are the portion of income that is not spent on consumption. It is denoted as S = Y – C, meaning that savings are the income left
over after spending on consumption. However, there is no guarantee that a portion of savings will be used for investment spending. Savings
also do not serve as a guide to the expected return on investment. In the Keynesian model, investment spending is independent of the level
of national income. Therefore, it is autonomous with the level of total income in the economy.
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State Finished
Marks 14.00/20.00
Question 1
Correct
Question 2
Correct
prescribed textbook
Question 3
Correct
MENU
e.
Question 4
Correct
export to SA.
production.
Question 5
Incorrect
MENU
question:

book.
Question 6
Incorrect
MENU

a. a and d
b. b and c
c. a, b, c and d
d. a, b and c 
Question 7
Incorrect
MENU
/ 2023(tonnes/year)
Maize(tonnes/year)
Country A 125 80
Country B 133 100

125 C = 80 M
133 C = 100 M

Question 8
Correct
Question 9
Incorrect
MENU
Dashboard
the / that
the SARB / achieve
uses to 2023 / this
Semester
a and b
b and c
c
b
a, b and c 
Question 10
Correct
The South African economy can be explained as follows:
Measure of Economic Activity for 2021 R’ 000
Gross domestic product 6 210 373
Gross domestic expenditure 4 495 378
Gross national income 4 655 984
Source: South African Reserve Bank. Given the above information, which of the following is correct?
a. Primary income payments exceeded primary income receipts into South Africa. 
b. Net exports in South Africa were negative and equal to R1 714 995.
c. Net exports in South Africa were positive and equal to R1 554 389.
d. Primary income payments were smaller than primary income receipts by R1 554 389
When primary receipts exceed payments, it is expected that GNI > GDP. Consequently, if primary receipts are less than payments GNI <
GDP. This represents the flow of income out of the country. The net exports are the difference between the GDP and the GDE. See section
5.2 of the prescribed book.
Question 11
Correct
MENU
a.
Question 12
Incorrect
b. If total income rises by R1 000, their autonomous consumption will rise by R846,66. 
Question 13
Correct
MENU


production).
Question 14
Correct
MENU

a. MPC is 1/4
b. MPC is 5/4
c. MPS is 1-1/4
d. MPC is 4/5 
𝐶=𝐶̅+𝑐𝑌 𝐶=50+0.8𝑌

Question 15
Correct
MENU

The equilibrium level of income is___________.
a. 1 000
b. 2 000
c. 2 500 
d. 4 000
The level of autonomous expenditure (A ̅ ) = 200 + 300 = 500. Equilibrium income is α x A ̅ = 5 x 500 = 2 500.
Question 16
Correct
A=C+I
C = 600 + 0,75Y
I = 200

b. a and b
c. a and c
d. b and c
e. c
0,75Y+ 200, thus A = 800 + 0,75Y.
Question 17
Correct
MENU
a. 0,20 
b. 0,15
c. 0,85
d. 0,80
Question 18
Correct
Which of the following is/are among the determinants of consumption?

a) wealth
b) interest rates
c) expectations
d) government expenditure
a. d
b. a, b and c 
c. only a
d. All of the above.
(a), (b) and (c) are all non-income determinants of consumption. Refer to section 6.3 and box 6-2 in the prescribed textbook for a detailed
explanation. Government expenditure (d) is not a determinant of consumption because as indicated in section 6.3 and box 6-2, government
is excluded in the simple Keynesian model. Therefore, the effect of government expenditure on consumption is not included in this model.
Also refer to section 6.2 and box 6-1.
Question 19
Incorrect
MENU
In the simple Keynesian model, the following is true about investment:

a. As income increases, investment also increases.

b. There is a negative relationship between investment and income. 
c. Investment is autonomous and is illustrated by a horizontal line.
d. Investment is positively related to the income.
Please see section 6.5 for a discussion of investment. Investment is autonomous in the Keynesian model, thus it does not depend on the
income level and is illustrated by a horizontal line.
Question 20
Correct
In the simple Keynesian model, which of the following is NOT correct?
a. I stand for total investment spending

b. Y stand for income
c. Induced consumption is a fraction of income
d. Marginal propensity to consume together with the marginal propensity to save equals one
e. Equilibrium is where consumption equals income 
The equilibrium level is where income is income (Y) is equal to the level of aggregate spending (A).
Jump to...
Assessment 3 ►
MENU 

State Finished
Time taken 1 hour 8 mins
Marks 14.00/18.00
Question 1
Correct
Which one of the following is NOT a purpose of economic theory?
a. to help us to understand what is happening in all aspects of the real world. 

b. to help us predict what will happen if something changes.
c. to describe what happens in the real world.
d. to help us explain what is happening in the economy.
e. to serve as a basis for policy decisions.
Economic theory has three main purposes, namely;(i) to explain how different things are related in the complex real economic world, (ii)to
predict what will happen if something changes and (iii) to serve as a basis for the formulation and analysis of decisions on economic policy.
See pages 12 to 13 of the prescribed book.
Question 2
Incorrect
a. the cost of the alternative. 

b. the monetary value to the decision-maker of the choice made.
c. the value to the decision-maker of the alternative that could have been chosen.
d. the monetary value of the best alternative that was chosen instead of the alternative.
e. the opportunity to make a different choice.
Question 3
Correct
MENU
a. unlimited wants; unlimited

b. limited wants; unlimited
c. unlimited wants; limited 
d. limited wants; limited
Question 4
Correct
a. local market
b. factor market
c. goods market 
d. labour market
Information
MENU
Monthly
/ 2023 - 2020 1 / Monthly
years.

Question 5
Correct
30.61%

Question 6
Correct
MENU
Dashboard
a) / and
2023 / Semester
/ ECS1601-23-S1
a and c
c and d 
a and b
d
c
a and d
Question 7
Correct

b. transaction; active balance 
c. speculative; active balance
d. speculative; passive balance
Question 8
Correct
MENU

a. Money is not the only possible store of value. 

b. Money can never lose its usefulness as a unit of account.
c. Money is always the best possible store of value.
d. The stock of money consists of notes and coins.
e. In a monetary economy, there always has to be a double coincidence of wants.
Question 9
Correct
a. a, b, and c only
b. a, b, c, and d 
c. a and b only
d. a and c only

Question 10
Incorrect
MENU


(ii) store of value

a. 
b. (ii) is correct.
c.
(iii) is correct.
e.
(i), (ii) and (iii) are correct.
Question 11
Correct
MENU
Dashboard
for / months.
/ this
UNISA
case,/ the
2023 / Semester
__________ variable. / Assessment 1
a. stock
b. flow 
c. liquidity
d. credit
Question 12
Incorrect

b. (ii) and (iii) are correct
c. (i), (ii) and (iii) are correct 
e. Only (i) is correct
Question 13
Incorrect
MENU
Dashboard
Coursesthis/ would
UNISAbe/illustrated
2023 / bySemester 1 / ECS1601-23-S1 / Online assessments / Assessment 1
which diagram?
a. [4]
b. [3] 
c. [1]
d. [2]
Question 14
Correct
MENU
The aim of expansionary fiscal policy is to_______

a. increase production, income and employment in the economy. 

b. limit excessive increases in the price level.
c. increase government spending and taxes in the economy.
d. discourage government spending in the economy.
e. increase taxes in the economy.
Expansionary fiscal policy may involve increases in government expenditure and/or decreases in taxes. Thus, the aim of expansionary fiscal
policy is to increase production, income, and employment in the economy. See pages 52 to 53 in the prescribed book.
Question 15
Correct
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 the
a. equity 
b. neutrality
c. regressive
d. administrative simplicity
Question 16
Correct
MENU

a. When the government spends more money than it has, it has a budget surplus.
b. Government revenue comprises only taxes and borrowings.
c. When the central bank buys government bonds to finance government expenditure, this is called inflationary financing. 
d. If the government spends less money than its revenue, this is called a budget deficit.
Government spending in the economy is determined by the revenue of the government (i.e. Taxes, Borrowings and income from property
owned). When the government spends more money than it collects from revenue. The government is said to be running a budget deficit
and the converse is a government surplus. Refer to section 3.5 of the prescribed textbook.
Question 17
Incorrect
a. proportional
b. regressive 
c. progressive
d. general
Question 18
Correct
MENU
Income (R) 5 000 1 500
PAYE (R) 1 500 200

a. (ii) and (iii) are correct.

b. (i) and (iii) is correct. 
e. (i), (ii) and (iii) are correct.

Jump to...

MENU 

State Finished
Marks 16.00/20.00
Question 1
Correct
Which of the following statements is/are correct with regard to value added tax (VAT)?
a. VAT is only levied on a few goods.
b. VAT is selective tax and excise duty.
c. VAT is the general tax and excise duty.
d. VAT is levied on most goods and services.
a. a, b and c.
b. d 
c. b and d
d. b, c and d
VAT is levied on most goods and services.
The correct answer is: d

Question 2
Correct
MENU
Which of the following statements is/are correct in explaining the difference between production and income?
Dashboard
a) / Courses
Income is the / UNISA
remuneration that /the2023 / of
factors Semester 1 / receive
production ECS1601-23-S1
for being /part
Online
of theassessments / Assessment 6
production process.
b) Production is when business combines factors of production in planned activity to bring about goods and services to satisfy the needs
and wants of society.
c) Production is when a firm combines factors of production in planned activity to bring about goods that only satisfy society’s wants.
d) Income is the reward that the factors of production receive for not taking part in the production process.
a. a and b 
b. a and c
c. b and d
d. a, b, c and d
Income is the remuneration that the factors of production receive for being part of the production process. Production is when business
combines factors of production in planned activity to bring about goods and services to satisfy the needs and wants of society.
The correct answer is: a and b
Question 3
Correct
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.

Refer to box 14-2. In this case, the state-owned enterprise is a borrower (deficit unit) and the buyer of a bond is a saver (surplus unit). Refer
to page 52 of the textbook for a definition of a deficit and surplus unit.
(i) deficit unit; (ii) surplus units.
Question 4
Correct
MENU
The Ethekwini Municipality is an example of

a. a public corporation.
b. local government. 
c. regional government.
d. central government.
The local government such as the eThekwini Municipality is mainly focused on local municipal area issues.
The correct answer is: local government.
Question 5
Correct

the euro has appreciated against the dollar.
Question 6
Correct
MENU
Dashboard
that the GDP/has
a. expenditure 
b. production
c. income
d. nominal prices

expenditure
Question 7
Incorrect
MENU

Which event must happen for the aggregate spending curve to swivel upwards as shown in the diagram?
a. An increase in government spending

b. An increase in interest rate 
c. A decline in tax rate
d. An increase in investment spending
The introduction of government spending and taxes affects consumer spending, which results in the aggregate spending curve changing.
Government spending causes the aggregate spending curve to shift, while changes in taxes cause the aggregate spending curve to swivel.
Therefore, an upward swivel of the aggregate spending curve is caused by a fall in tax rate. This is because when taxes fall, consumers’
disposable income increases and consumers also increase their spending. An increase in interest rate causes a decrease in investment shown
by a downward shift of the aggregate spending curve and an increase in investment spending and government spending results in an
upward shift of the aggregate spending curve.
The correct answer is: A decline in tax rate

Question 8
Correct
MENU
Which of the following is correct regarding the effects of expansionary fiscal policy?
a. The size of the multiplier will increase. 

b. Autonomous spending and the level of income will decrease.
c. The slope of the consumption function will decrease due to a rise in the tax rate.
d. There will be a leakage of money out of the circular flow of income, spending and production.
An expansionary fiscal policy occurs when government spending is increased and taxes decreased. Since taxes affect the slope of the
consumption function, a reduction in taxes increases the slope of the consumption function, thus causing the size of the multiplier to
increase. Autonomous spending and equilibrium income will increase due to the injection of money in the circular flow of income, spending,
and production.
The correct answer is: The size of the multiplier will increase.
Information
CASE STUDY 1
Transition.

Question 9
Incorrect
MENU
23600000
 rand.

Question 10
Correct
MENU
a. figure 1 
b. figure 2
c. figure 3
d. figure 4
Question 11
Correct
MENU
Dashboard
challenge by /_____.
Courses / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 6
Question 12
Correct
(i) Rand
(ii) US dollar
(iii) British pound

b. (ii) and (iii)
c. (ii) 
d. (i) and (iii)
e. (ii) and (i)

Information
CASE STUDY 1
MENU
Transition.

Question 13
Incorrect
MENU
Answer:
0.13%

Question 14
Correct


Question 15
Correct
MENU
Dashboard
Question 16
Correct

Information
CASE STUDY 2
MENU
Climate Change
assessments
2021 - 2040:
water.
2041 – 2060:

MENU
Question 17
Incorrect
In what way will the increasingly unsuitable climate envelope and associated extreme weather events, caused by climate change, affect the
Western Cape economy in terms of the AD-AS model?
a. Shift the AD curve to the right. 

c. Cause a downward movement along the AD curve.
d. Cause a movement along the AS-curve.
The extreme weather conditions caused by climate change in the Western Cape will shift the AS-curve to the left or upwards due to a
decrease in the supply of agricultural products. Refer to Section 9.1 of the prescribed textbook.
The correct answer is: Shift the AS-curve to the left.
Question 18
Correct
curve.


Question 19
Correct
MENU
Dashboard
workers / farming
in the Coursesand
/ UNISA
tourism/sectors,
2023 /resulting
Semester
in a120%
/ ECS1601-23-S1
unemployment /rate
Online
on the above
a. a flow variable.
Question 20
Correct

a. (a), (b), (c), and (e)

b. (c) and (e)
c. (d) and (e) 
d. (a), (d), and (e)
◄ Assessment 5
Jump to...

MENU 

State Finished
Marks 18.00/20.00
Question 1
Correct
In response to the COVID-19 pandemic, countries injected trillions of dollars into their economies to provide relief to households and firms.
This response is an example of ... policy, which can result in ... inflation, ceteris paribus.
a. expansionary; cost-push
b. contractionary; demand-pull
c. contractionary; cost-push
d. expansionary; demand-pull 
Question 2
Correct
If inflation accelerates due to the increase in the price of oil (an import), the best policy to combat such inflation in a country with a high
unemployment rate, would be to...
a. apply incomes policy, illustrated by a leftward shift of the AS curve.

b. respond with demand management policy that will increase aggregate demand, which will be illustrated by a rightward shift of the
AD curve.
c. apply the supply-side policy that will increase aggregate supply, which will be illustrated by a rightward shift of the AS curve. 
d. implement contractionary monetary policy, illustrated by the rightward shift of the AD curve.

Question 3
Correct
MENU
a. Discourages savings.
b. Increases the costs of exports.
c. Increases the costs of imported goods. 
d. Discourages exports.
Question 4
Correct
a. An increase in taxes
b. An increase in interest rates
c. A decrease in government spending
d. Measures to decrease the productivity of labour 

Question 5
Correct
MENU

Which of the diagrams above illustrates cost-push inflation?
a. figure 2
b. figure 1
c. figure 3
d. figure 4 
Refer to section 10.4 of the prescribed textbook,
Question 6
Correct
Which one of the following is an example of inflation?
a. A 4% increase in the tax rate.

b. A 4% increase in the interest rate.
c. A 4% increase in the CPI. 
d. A 4% increase in the petrol price.

Question 7
Correct
MENU
Dashboard / Courses
rate is _____ than full/ employment.
a. higher; higher 
b. higher; lower
c. lower; higher
d. lower; lower.
Question 8
Correct
a. decrease; increase.
b. increase; decrease. 
c. decrease; decrease.
d. increase; increase
Question 9
Correct

d. gross domestic product per capita.
Question 10
Correct
MENU
Which one of the following statements regarding unemployment is correct?

a. Tariff reduction in the textile industry and illegal imports forced the textile factory where Mpho works to close down. Mpho and his
colleagues are frictionally unemployed.
b. Lebo would like to earn money, but just cannot be bothered to apply for a job. Lebo is seasonally unemployed.
c. Following a recession, Mandla loses his job in the mines job due to lack of sufficient demand for aggregate demand in the 
economy. Mandla is cyclically unemployed.
d. Masindi is trained as a nurse. She is moving to Tshwane soon, so she quit her job in Durban. Masindi is confident that she will find a
job in Tshwane and we may therefore classify her as structurally unemployed.
Question 11
Correct
a. downswing
b. peak
c. upswing
d. trough 
Question 12
Correct
a. imports 
b. government spending
c. capital widening
d. natural resources

Question 13
Correct
MENU
Dashboard / Courses
b. seasonal unemployment.
c. cyclical unemployment.
d. frictional unemployment.
workers.
Question 14
Correct
Suppose Botswana’s population comprise 8 000 000 people who are unemployed, 3 000 000 students, 7 000 000 home-makers, 2 000 000
not economically active, 13 000 000 employed, and 35 000 000 people who are not in the age category 15 to 65 years. What does
Botswana’s labour force population equal?
Answer: 21 000 000 
Refer to learning unit 11 and chapter 11 in the prescribed textbook.

Question 15
Correct
MENU

Dashboard
(a) / Courses
tends to give / UNISA / 2023 / Semester 1 / ECS1601-23-S1 / Online assessments / Assessment 4
rise to crime
a. a), (b) and (c) 

b. a) and (b) are correct
c. only (a) is correct
d. b) and (c) are correct
Question 16
Incorrect

2019 2020 2019 2020
Answer:
12.47

Question 17
Correct
MENU
Dashboard
Courses / isUNISA
Answer:
48%

Question 18
Correct
Answer: 17 000 000 

Question 19
Incorrect
MENU

2019 2020 2019 2020
Answer:
4

Question 20
Correct
b. The nominal GDP increased by 10%, while the price level increased by 12% and there was no increase in the population.
c. The real GDP increased mainly due to an increase in defence expenditure.
d. The nominal GDP increased by 6%, while the price level increased by 6% and the population increased by 1%.
◄ Assessment 3
Jump to...
Assessment 5 ►
MENU 
Started on Friday, 14 April 2023, 4:22 PM

State Finished
Completed on Friday, 14 April 2023, 4:33 PM
Marks 17.00/20.00
Question 1
Correct
MENU

a. R2 229 million
b. R2 771 million
c. R3 689 million
d. R1 311 million 
MENU
Question 2
Incorrect
Answer:
320billion

Question 3
Correct
MENU

Marginal propensity to save 1/

4
What is the multiplier?
Answer:
4

Question 4
Incorrect
a. lower; increase; downward

b. lower; decrease; downward 
c. raise; decrease; downward

Question 5
Correct
MENU

The value of aggregate autonomous spending is
Answer:
35 000 000

Question 6
Correct
a. It affects the size of the multiplier.
b. The income level is affected by government spending.
c. The size of the multiplier decreases as government spending decreases.
d. The income level does not affect government spending. 

Question 7
Correct
MENU
In the Keynesian model, exports...

Select one:
a. remain unaffected by changes in output. 
b. increase when income increases.
c. decrease when income decreases.
d. depend on the interest rate.
e. depend on government policy.
Question 8
Correct
Select one:
Question 9
Correct
Select one:
Question 10
Correct
MENU


a. [1] and [3]
b. [1],[2],[3] and [4]
c. [3] and [4] 
d. [2] and [4]

Question 11
Incorrect
MENU
Y = 10 000
S = -250 + 0.65Y
I = 500
G = 1 100
m=0,13

a. (i) and (iii) are correct.

d. (ii) and (iv) are correct. 
Question 12
Correct
MENU

Select one:

Question 13
Correct
MENU

Select one:
Question 14
Correct
Select one:
Question 15
Correct
MENU
Based on the international trade effect, how would an increase in the price level in South Africa affect the exchange rate and aggregate
demand?
Select one:
a. rand will depreciate; the quantity of aggregate demand will increase.
b. rand will appreciate; the quantity of aggregate demand will decrease. 
c. exchange rate will remain unchanged; the aggregate demand will decrease.
d. exchange rate will increase; the aggregate demand will increase.
Question 16
Correct
Select one:
Question 17
Correct

(e) Prices increase
Select one:

Question 18
Correct
MENU

Select one:
Information
Question 19
Correct
MENU

Answer:
80 000 000

Question 20
Correct
Answer:
25 000 000

◄ Assessment 2
Jump to...
Assessment 4 ►
MENU 

State Finished
Marks 17.00/20.00
Question 1
Correct
Statement a and b.
demand curve.
Question 2
Correct
Rand appreciates.
Yuan depreciates.
Question 3
Correct
MENU
a. economic growth.
d.
colonisation
Question 4
Correct
US$415 000. However, the South African government will only allow the hospital to import five machines. Which trade policy measure is
a. import tariff
b. import quota 
c. exchange control
Question 5
Incorrect
MENU
question:

book.
Question 6
Correct
MENU
Question 7
Correct
MENU

d.
Question 8
Incorrect
the instrument that the SARB uses to achieve this goal?
a and b
b and c
c
b
a, b and c 
Question 9
Correct
MENU

b. inflation rate.
prescribed book.
Question 10
Correct

Item Value (R ‘000)
Labour cost 36 000
Profits 20 000


c. (i) is correct. 

Question 11
Incorrect
MENU
Which of the following statements is correct in the simple Keynesian model?

a. When the output exceeds current aggregate expenditure, the economy will experience an unplanned fall in inventories.
b. If autonomous consumption is zero, the savings function is a horizontal line.
c. A fall in investment will shift the aggregate expenditure function upwards. 
d. An increase in the marginal propensity to save will decrease aggregate expenditure and equilibrium output will fall.
When AE < Y, the economy experiences an unplanned increase in inventories. A fall in investment will decrease the aggregate expenditure,
which results in a shift downward. When autonomous consumption is zero, the savings function remains upwards as long as the marginal
propensity to save is positive. The MPS and MPC have an inverse relationship; thus, a rise in the MPS will decrease the MPC, resulting in the
AE curve becoming flatter and equilibrium output falling.
Question 12
Correct
a. 
b.
c.
d.

Question 13
Correct
MENU


Question 14
Correct
MENU
spending:
a. a and c
b. only a
c. only c
d. b and d 

MENU
Question 15
Correct

means MPS is zero
Question 16
Correct
spending will …

𝛼=1/1−𝑐
∴ 𝛼=11−0.5
∴𝛼=2
Increase in GDP
=40
Question 17
Correct
MENU
Q6
Question 18
Correct
When aggregate spending is greater than income_____.
a. the total amount of production in the economy is the same as the total amount of spending.
b. inventories will rise.
c. the total amount of production in the economy is greater than the total amount of spending.
d. unplanned inventory adjustment will remain the same.
e. inventories will fall. 
When A > Y, there will be excess demand as spending exceeds income. Consequently, the economy will dissave and reduce inventories.
Inventories will rise when A <Y, thus aggregate spending is less than production.
Question 19
Correct
MENU


b. a and b
c. b and c
d. a and c
incorrect.
Question 20
Correct
Which one of the following factors will increase the size of the multiplier?
a. an increase in government spending

b. an increase in the marginal propensity to consume 
c. an increase in the marginal propensity to save
d. increase in autonomous consumption
Government spending and Autonomous Consumption in the Keynesian model are autonomous expenditures, consequently an increase in
government spending or autonomous consumption will only increase aggregate spending. An increase in the marginal propensity to save
will decrease the marginal propensity to consume as MPS = 1-MPC, the lower MPC will reduce the size of the multiplier.
Jump to...
Assessment 3 ►

Ecs1601 Combined

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Dashboard / My courses / ECS1601-23-S1 / Online assessments / Assessment 6

Started on Tuesday, 6 June 2023, 9:49 AM

Mark 0.00 out of 1.00

The correct answer is: a only

Mark 0.00 out of 1.00

Use the following statements to answer the question:

a. Both statements a and b are incorrect.

Mark 0.00 out of 1.00

Which of the following statements are correct?

The correct answer is: a, b, d

Mark 1.00 out of 1.00

Mark 1.00 out of 1.00

Mark 1.00 out of 1.00

Mark 0.00 out of 1.00

The correct answer is: reduces; smaller

Mark 1.00 out of 1.00

b. Disposable income is equal to c(1-t)Y.

Your answer is correct.

The correct answer is:

[Adapted from Daily Maverick, accessed 17 Jan 2013]

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The correct answer is: 227,500,000.00

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a. Cyclical (demand deficiency); demand side.

The correct answer is: Structural; supply side.

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a. Shayi’s salary is not considered when measuring GDP in South Africa.

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a. (i), (ii) and (iii)

Refer to section 4.3 in the prescribed textbook.

The correct answer is: (ii)

[Adapted from Daily Maverick, accessed 17 Jan 2013]

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The correct answer is: 0.14%

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(c) negative externalities

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[Adapted from centre for Environmental Rights, accessed 17 Jan 2013]

Dashboard / My courses / ECS1601-23-S1 / Online assessments / Assessment 6

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a. The real GDP will increase.

The correct answer is: The real GDP will decrease.

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a. (i), (ii), and (iii)

Refer to types of unemployment, pages 227 to 229 in the prescribed textbook.

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a. deterioration in weather conditions 

Refer to Table 9-2 in the prescribed textbook.

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(iii) an increase in gross domestic product, ceteris paribus.

a. (i), (ii), and (iii)

Refer to Section 9.1 in the prescribed textbook.

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Dashboard / My courses / ECS1601-23-S1 / Online assessments / Assessment 4

Started on Friday, 12 May 2023, 8:11 PM

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Refer to section 10.4 of the prescribed textbook.

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a. interest rates; leftward shift of the aggregate demand curve

See sections 9.1 and 10.4 of the prescribed textbook.