MACROECONOMICS MULTIPLE CHOICE
12. (1) (2) 15. (1) (2) (3) Which of the following statements islare true? (11/5) The Tsar Bomba hydrogen bomb destroyed capital, K, within a 35km radius from ground zero, but did not affect labour, L. One can thus conclude that the dropping of this bomb would have caused the labour demand curve to shift. The SARS-CovZ virus has reduced labour, L. The virus has not, however, had an impact on capital, K. One can thus conclude that the virus would cause the labour demand curve to shift. A technological advance would cause the labour demand curve to shift. Option 1 is correct. Options 1 and 3 are correct. Options 2 and 3 are correct. Options 1, 2 and 3 are correct. \"South Africa's consolidated budget decit for the 2020 nancial year has been revised down to 14% of GDP, Finance Minister Tito Mboweni revealed in tabling the country's 2021 Budget in Cape Town on llll'ednesday.\"1 If saving is positively related to the interest rate, and South Africa's citizens become afraid that the outlook for future government expenditures and revenues increase the likelihood that the country will default (1%} the decrease in the size of South Africa's budget decit will raise interest rates in general. The increased risk of default will, therefore, raise interest rates on government bonds. the decrease in the size of South Africa's budget decit will raise interest rates in general. The increased risk of default will, however, reduce interest rates on government bonds. the decrease in the size of South Africa's budget decit will reduce interest rates in general. The increased risk of default will, therefore, reduce interest rates on government bonds. the decrease in the size of South Africa's budget decit will reduce interest rates in general. The increased risk of default will, however, raise interest rates on government bonds. In a country to the north pieces of paper called tigers are the only item that buyers give to sellers when they purchase goods and services, so it would be common to use, say, 'E 000 tigers to buy a smartphone,' prices are posted in terms of bucks, so you might walk into a supermarket and see that, today, a chocolate is worth 10 bucks; and bucks decay overnight, so no buck has any value for more than 24 hours. In this economy the buck is a (1%) medium of exchange, but it cannot serve as a unit of account. medium of exchange, a store of value and a unit of account. unit of account, but it is not a medium of exchange, nor is it a liquid asset. unit of account, but it cannot serve as a store of value. 16. 17. 18. 21. a) b) c) d) 22. 01) Households and rms in GeorgievaVille hold R25 000 000 in bank notes and coins. Commercial banks operating in GeorgievaVille have deposits of R500 000 000. These banks' reserves amount to R15 625 000, 80% of which is in deposits with the country's Central Bank. What is the monetary base? (Only type in the numerical value. Do not include any units when submitting your answer. Round off to the first decimal place.) (2) Households and rms in GeorgievaVille hold R25 000 000 in bank notes and coins. Commercial banks operating in Georgieva'v'ille have deposits of R500 000 000. These banks' reserves amount to R15 625 000, 80% of which is in deposits with the country's Central Bank. Calculate the money multiplier. (Only type in the numerical value. Do not include any units when submitting your answer.) {2) Consider the balance sheet of First Bank. It has reserves of R40 000, deposits worth R400 000, securities worth R210 000, capital of R75 000. The bank has also made loans of R250 000, while issuing debt of R25 000. Based on this information owners' equity will fall to zero if loan defaults reduce the value of total assets by %. (11/5) 15. 20. 25. 35. The neutrality of money refers to the fact that in the long run (1%) an expansionary monetary policy causes real variables to be higher while nominal variables are unchanged. an expansionary monetary policy causes nominal variables to be higher while real variables are unchanged. an expansionary scal policy causes real variables to be higher while nominal variables are unchanged. an expansiona scal policy causes nominal variables to be higher while real variables are unchanged. People in BankersVille had been expecting inflation to increase by 2 percentage points between 2018 and 2019. However, data released by the country's National Statistical Service indicate that over that period the price level increased from 140 to 14?. You thus conclude that between 2018 and 2019 (11/2) those who lent money at a fixed interest rate suffered the most. those who borrowed money at a fixed interest rate suffered the most. retired persons with a cost of living adjustment in their benets suffered the most. employers who hired workers based on long-term labour contracts suffered the most. In 2018 Khuselo purchased R25 000 worth of bonds. Data obtained from the country's statistical services reveals that the price index in 2018 was 120 and 126 in 2019. Khuselo's tax consultant states that Khuselo redeemed his bonds for R28 375 in 2019 and that his taxable income places him in the 40% tax bracket. You thus deduce that Khuselo's real aftertax rate of interest is (11/2) 15%. 20%. 30%. 40%
