Question 1 of 25

2 Points

Which of the following statements is correct?

A. Capital goods have a limited life span.
B. Natural resources include buildings, machinery and tools.
C. Entrepreneurs are just managers.

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Question 2 of 25

2 Points

Which of the following is/are correct regarding the distinction between macroeconomics and microeconomics?

a)Salaries paid to Checkers employees is an example of a macroeconomic variable.

b)An import by Auto Spares of a new machine for painting cars is an example of a microeconomic variable.

• A.

only b is correct

• B.

both a and b are incorrect

• C.

both a and b are correct

• D.

only a is correct

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Question 4 of 25

2 Points

If banks experience liquidity shortages, they can borrow from the Reserve Bank through...

• A. bank supervision.
• B. public debt management.
• C. accommodation policy.
• D. exchange control regulation.

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Question 8 of 25

2 Points

Which of the following could be expected when the government applies a contractionary fiscal policy?

• A. a decrease in the tax rate.
• B. a decrease in the interest rate.
• C. an increase in government spending.
• D. a decrease in the budget deficit.

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Question 12 of 25

2 Points

Suppose that Tom, a South African trader, imports goods from the US and sells them in South Africa. Now suppose that the rand depreciates against the dollar. How would this affect Tom's business?

• A. The demand for US goods by Tom's business will increase because imports from US become cheaper when the rand depreciates.
• B. The prices of goods that Tom's business imports will decrease in terms of rand.
• C. The demand for US goods by Tom's business will increase because imports from US become cheaper when the dollar appreciates.
• D. The prices of goods that Tom's business imports will increase in terms of rand.

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Part 11 of 15 - Part 11

Question 16 of 25

2 Points

Gross domestic product (GDP) may be defined as ...

• A. the monetary value of all goods and services (final, intermediate and non-market) produced in a given year.
• B. total resource income less taxes, savings and spending on exports.
• C. the economic value of all economic resources used in the production of a year's output.
• D. the market value of all final goods and services produced in a country in a specific year.

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Question 20 of 25

2 Points

Which one of the following statements regarding the assumptions of the Keynesian model is correct?

• A. In the simple Keynesian model, prices, wages, money supply and the interest rate are given meaning that their values are determined outside the model.
• B. The simple Keynesian model can be used to explain the workings of the labour market.
• C. The simple Keynesian model can be used to study inflation.
• D. The simple Keynesian model can be used to study monetary policy.

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Question 21 of 25

2 Points

Which one of the following statements is correct regarding consumption and saving in the Keynesian model?

• A. If total consumption exceeds total income, this is an indication of dissaving.
• B. If the initial income is zero, then total consumption will be equal to total saving.
• C. Given that income does not decrease, a decrease in consumer spending will result in a proportional decrease in saving.
• D. If autonomous consumption increases, consumer spending will remain the same, ceteris paribus.

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Question 23 of 25

2 Points

If the multiplier is 2, an R80 billion increase in government spending will ...

• A. increase GDP by 160 billion.
• B. the multiplier does not have an effect on government spending.
• C. increase GDP by 40 billion.
• D. increase GDP by 80 billion.

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Question 24 of 25

2 Points

If the MPC is 0,6 and gross investment increases by R3 billion, the equilibrium GDP Will

• A. increase by R7,5 billion
• B. Increase by R5 billion
• C. decrease by R1,8 billion
• D. Increase by R1,8 billion
• E. stay the same

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