Question 20 (4 marks) In general, consumers are price-takers; thus, they are expected to react to price changes by substituting ice-cream flavours that have become relatively cheaper for those that have become relatively more expensive. This phenomenon is consistent with the substitution effect. Substitution tends to cause a negative correlation between the price and quantity relatives. With regard to the observation above, and the indices calculated above, which of the following is false? A The transaction data on the ice-cream sales is not indicative of substitution effect. B The Paasche's indices are relatively greater than the Laspeyre's indices. C The price and quantity relatives of the ice-cream data are positively correlated. D The price and quantity relatives of the ice-cream data are negatively correlated. SECTION E Question 21 [20 MARKS] (4 marks) How long would it take R20000 invested today at a simple interest rate of 9% p.a. to reach an investment goal of R30000. A Approximately 5.6 years B Approximately 6.1 years C Approximately 4.7 years D Approximately 5.1 years Question 22 (4 marks) How long would it take R20 000 invested today at a nominal annual continuously compounding (NACC) interest rate of 9% p.a. to reach an investment goal of R30 000. A Approximately 5.6 years B Approximately 4.7 years C Approximately 5.1 years D Approximately 4.3 years