MULTIPLE CHOICE QUESTIONS (ONLY CHOOSE THE CORRECT OPTION) Question 10 An increase in GDP per capita occurs when A the increase in the real GDP exceeds the inflation rate B the nominal GDP grows at a faster rate than the real GDP C the real GDP exceeds the real GNI D the increase in the real GDP exceeds the population growth Question 11 Which of the following statements regarding the economic functions of government is correct A Provision of public goods forms part of the allocation function of government B Influencing government expenditure, government revenue and the level of the repo rate in order to affect the business cycle, forms part of the regulation function of government C A regressive tax will contribute towards the distribution function of government D Implementing laws that prohibit negative externalities forms part of the stabilisation function of government QUESTION 12 Market failure can be described as a situation in which A one company decides to buy all available coal in a country, resulting in a scarcity of this resource for other buyers B the price of agricultural goods falls due to excess supply when harvests are good C government imposes progressive taxes in order to indirectly redistribute income D the free market outcome is NOT efficient Question 13 Which of the following is correct with regards to taxes in South Africa A Company tax is an indirect tax B Personal income tax is a direct tax C Value added tax is a direct tax D Excise duty is a general tax Question 14 An externality arises when the cost of producing a good or service A falls on other people and is not totally paid for by the producer of the good or service B results in an increase of profit for the producer C exceeds the price that consumers are willing to pay D results in wages being paid to foreign workers Question 15 Monetary policy, which has to do with decisions regarding the repo rate in order to bring down the inflation rate, has to do with the function of government A regulation B distribution C stabilisation D allocation Question 16 When the government charges high income groups in the economy a tax rate of 45 , and use this tax to finance social welfare payments to low income earners, this forms part of the function of government A stabilization B regulation C allocation D distribution

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MULTIPLE CHOICE QUESTIONS (ONLY CHOOSE THE CORRECT OPTION) Question 10 An increase in GDP per capita occurs when ... A.the increase in the real GDP

MULTIPLE CHOICE QUESTIONS (ONLY CHOOSE THE CORRECT OPTION)

Question 10

An increase in GDP per capita occurs when ...

A.the increase in the real GDP exceeds the inflation rate.
B.the nominal GDP grows at a faster rate than the real GDP.
C.the real GDP exceeds the real GNI.
D.the increase in the real GDP exceeds the population growth.

Question 11

Which of the following statements regarding the economic functions of government is correct?

A.Provision of public goods forms part of the allocation function of government.
B.Influencing government expenditure, government revenue and the level of the repo rate in order to affect the business cycle, forms part of the regulation function of government.
C.A regressive tax will contribute towards the distribution function of government.
D.Implementing laws that prohibit negative externalities forms part of the stabilisation function of government.

QUESTION 12

Market failure" can be described as a situation in which ...

A.one company decides to buy all available coal in a country, resulting in a scarcity of this resource for other buyers.
B.the price of agricultural goods falls due to excess supply when harvests are good.
C.government imposes progressive taxes in order to indirectly redistribute income.
D.the "free market outcome" is NOT efficient.

Question 13

Which of the following is correct with regards to taxes in South Africa?

A.Company tax is an indirect tax.
B.Personal income tax is a direct tax.
C.Value added tax is a direct tax.
D.Excise duty is a general tax

Question 14

An externality arises when the cost of producing a good or service ...

A.falls on other people and is not totally paid for by the producer of the good or service.
B.results in an increase of profit for the producer.
C.exceeds the price that consumers are willing to pay.
D.results in wages being paid to foreign workers.

Question 15

Monetary policy, which has to do with decisions regarding the repo rate in order to bring down the inflation rate, has to do with the ... function of government.

A.regulation
B.distribution
C.stabilisation
D.allocation

Question 16

When the government charges high income groups in the economy a tax rate of 45%, and use this tax to finance social welfare payments to low income earners, this forms part of the ... function of government.