UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 1
QUIZ
Question 2
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Which one of the following statements is INCORRECT regarding the goods market model?
Select one:
A. A decrease in taxes to decrease unemployment will be more effective in a labour-intensive economy than in a
capital-intensive economy.
B. An increase in government spending increases income, and an increase in income increases government spending
but by less than one to one.
C. Expansionary fiscal policy is a mean to increase production, income and employment. However, high imports,
crowding out of private investment, and a too-high budget deficit are all constraints to this expansionary fiscal
policy's effectiveness to increase output.
D. Expansionary fiscal policy can result from increased government spending and/or decreased taxes, and the ZZ curve
will shift upwards.
UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 1
QUIZ
Question 4
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Marked out of 1.00
This question is based on the following data for country PORTHOS for 2020.
Marginal propensity to consume = 0.5
Autonomous consumption = R600 million
Investment spending = R40 million
Government spending = R280 million
Taxes = R300 million
An economist Dr Bright Sithole calculated that the gap between the current equilibrium level of output and income
and the full employment level of income is R110 million.
By how much must taxes decrease to reach full employment?
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