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Exam (elaborations) ECS 1500 (ECS1500)
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ECS1500 assessments from 1-6 Questions and Answers.100% Thorough workings and explanations which will give understanding. Distinction guaranteed
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Which of the following statements on the production price index is correct?Select one:
a.
The PPI excludes the prices of imported goods measured when these goods first enter
the country.
b.
The same basket of goods are used to measure the CPI and the PPI.
c.
The PPI includes capital and intermediate goods.
d.
The PPI includes services.
e.
The PPI shows how the average price level of goods and services bought by a typical
consumer or household changes over time
Feedback
Your answer is not correct.
The PPI does not include services. That is an important difference between the CPI
(which included services) and the PPI (which excludes services).
The CPI shows how the average price level of goods and services bought by a typical
consumer or household changes over time. The PPI provides an indication of changes in
production costs over time.
The PPI includes the prices of imported goods measured when these goods first enter
the country.
The PPI does include capital and intermediate goods. This is therefore the correct option
to choose. This is another important difference from te CPI, which does not include
capital and intermediate goods.
The correct answer is: The PPI includes capital and intermediate goods.
Question 2
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Question 16 is based on the table below, which shows the total production in a small
economy for the years 2015 and 2019:
,Calculate the growth rate in the real GDP from 2015 to 2019.
Select one:
a.
–14,29%
b.
3,21%
c.
14,29%
d.
–16,67%
Feedback
Your answer is not correct.
To calculate the change in real GDP we have to use the same prices for both periods. We
use the prices for 2015.
To determine the change in real GDP we use the following formula:
Let us first calculate the GDP for 2015:
Now we can calculate the GDP for 2019 using 2015 prices, that is, the real GDP for 2019:
The change in real GDP from 2015 to 2019 = R2 940 – R3 430 = –R490.
Now we can calculate the growth rate in the real GDP from 2015 to 2019:
This therefore shows that real production decreased by 14,29% from 2015 to 2019.
The correct answer is: –14,29%
Question 3
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When a worker is retrenched due to a new technology that has taken over his/her job, it
is an example of cyclical unemployment.
,Select one:
True
False
Feedback
When a worker is retrenched due to a new technology taking over his/her job, it is an
example of structural unemployment. This type of unemployment occurs when the skills
that people have do not match the job requirements. When advanced technology makes
manual jobs obsolete, it means that a higher level of skills, education and technical
competency is required of potential workers.
Cyclical unemployment occurs when there is a change in the demand for certain goods
and services in the economy. This will result in a recession because if there is a
lower demand for certain goods and services, firms in the industries concerned will
generate less revenue, profits and returns on investments. Once this happens, the firms
will no longer have enough money to pay staff and suppliers. People will lose their jobs
as a result of these events.
The correct answer is 'False'.
Question 4
Correct
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If we add the total value of all final goods and services sold in the market for goods and
services to calculate GDP, we are using the......
Select one:
a.
expenditure approach
b.
production method
c.
income method
Feedback
Your answer is correct. Well done!
If we add all the expenditure on final goods and services in the market for consumer
goods and services, we are using the expenditure approach to calculate GDP. See
section 6.2.2.2 for all the different methods to calculate GDP.
The correct answer is: expenditure approach
Question 5
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, In a Lorenz diagram for income, the line of equality shows ...
a.
how much redistribution occurs.
b.
the income distribution if everyone received the same income.
c.
the most equitable income distribution.
d.
how unequally incomes are distributed.
Feedback
Your answer is incorrect.
The line of equality shows the income distribution if everyone received the same
income. Note that this is not necessarily the most equitable income distribution. For
income distribution to be equitable, we also have to take into account that some persons
work harder than others, or work longer hours. Thus it would not really be fair or
equitable if everyone received exactly the same income regardless of their efforts. That
would discourage people to work and do their best.
Although the line of equality helps us to identify how unequal income is distributed by
considering the area that the Lorenz curve deviates from the line of equality, the line of
equality does not tell us how unequal incomes are distributed. The Lorenz curve contains
that information.
The line of equality also does not tell us how much redistribution occurs. This we can
identify if we compare the Lorenz curve before taxes and welfare payments and the
Lorenz curve after taxes and welfare payments. If the Lorenz curve after taxes and
welfare payments moves closer to the line of perfect equality, we can say that
redistribution had taken place in a country due to the payment of taxes and the
distribution of welfare payments.
The correct answer is:
the income distribution if everyone received the same income.
Question 6
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Which of the following statement(s) is/are correct?
[1] The informal sector includes people who do not pay VAT.
[2] The labour force includes persons between the ages of 16–64.
[3] According to StatsSA, to qualify as unemployed according to the strict definition of
unemployment, the only requirement is that a person who wants to work must be
available to start work immediately.
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