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ECS1601 EXAM PACK 2023
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ECS1601EXAM
PACK
2023
, lOMoARcPSD|8436517
CONFIDENTIAL
Page 2 of 20 ECS1610
May/June 2020
1. Which of the following is/are correct regarding the distinction between macroeconomics and
microeconomics?
a) Salaries paid to Checkers employees [MICRO] is an example of a macroeconomic variable.
b) An import by Auto Spares [MICRO] of a new machine for painting cars is an
example of a microeconomic variable.
[1] only a is correct
[2] both a and b are correct
[3] only b is correct
[4] both a and b are incorrect
2. Which of the following is incorrect regarding factors of production/RESOURCES?
[1] Labour includes the efforts, abilities, and skills of people in the production of goods and
services.
[2] An entrepreneur is a risk taker in search of profits and does something new with existing
resources.
[3] A minibus taxi used by hotel to transport its guest from and to airport is an example of capital.
[4] Money is an important part of production factors, and without money, firms will not be able
to produce goods and services.
3. Which of the following is NOT a scarce production input?
[1] land available for residential housing
[2] factories that produce fabric masks
[3] money to buy tools and pay workers
[4] people available to work or start a business
4. The circular flow of income and spending reveals that an increase in South African exports will…
[1] increase spending on South African imports by more than the spending on exports.
[2] increase income to South African economy and increase income to South African
producers of goods and services.
[3] increase income to foreign firms and increase income to foreign factors of production.
[4] decrease output and income in the rest of the world.
Downloaded by Rufaro Chikovore (chikosrufa@gmail.com)
,5. Which of the following statements about stock and flow variables is/are true?
a) Interest earned is a flow variable.
b) The number of people who enter the unemployment pool is a stock variable.
[1] both a and b are correct
[2] only b is correct
[3] a is correct and b is incorrect
[4] both a and b are incorrect
6. Given the following information in the table, which option is correct?
Coins R60 000
Notes R150 000
Demand deposits R300 000
Quasi money R400 000
M3 2 000 000
Long-term deposits ?
[1] Long-term deposits are equal to R1 090 000
[2] M1 is R210 000
[3] Cash is R150 000
[4] M2 is R610 000
7. We can expect that the amount of money that a bank create will decrease when…
[1] more bank clients choose to deposit their funds at the bank.
[2] the bank's clients choose to hold a smaller part of their money in the form of cash.
[3] the bank borrows from the South African Reserve Bank.
[4] the South African Reserve Bank increases the repo rate.
, Use the following figure, which shows the demand for money curves, to answer question 8.
i
L1
L2
M
8. Suppose there is an increase in the total remuneration earned by the factors of production. How
this will influence the demand for money?
[1] The demand for active balances will increase and shift L2 to the right.
[2] The demand for transaction purposes will increase and shift L1 to the right.
[3] The demand for passive balances will decrease and shift L1 to the left.
[4] Speculative demand for money will decrease and shift L2 to the left.
9. Which of the following statements concerning money is correct?
[1] The value of money is not based on the confidence that both government and monetary
authorities will be able to control the supply to achieve stability and that the purchasing
power does not fall.
[2] Paper money was developed since specialisation between countries led to increases in
trade, causing the use of coin to be inconvenient as this was difficult to handle and not safe
to transport.
[3] Credit cards are money because they function as a medium of exchange.
[4] Electronic money is another form of money as it can be used as a means of payments.
10. Which of the following statements is incorrect regarding the quantity of money?
[1] The quantity of money is determined by the interaction of the demand for money and
interest rate.
[2] If the interest rates are high, the quantity of money demanded will tend to low.
[3] If interest rates are low, the quantity of money demanded will tend to be high.
[4] There is a positive relationship between interest rates and the quantity of money demanded.
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