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ECS Assessment 2, Ecs quiz 2 accompanied with questions and answers
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UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 2QUIZ
Started on Thursday, 21 March 2024, 10:36 AM
State Finished
Completed on Thursday, 28 March 2024, 2:25 AM
Time taken 6 days 15 hours
Marks 21.00/30.00
Grade 70.00 out of 100.00
Question 1
Correct
Mark 1.00 out of 1.00
Which one of the following statements is INCORRECT?
Select one:
A. If the nominal quantity of money is R800 and the price level is R20, then the real quantity of money is 40.
B. A decline in the general price level results in an increase in the real quantity of money, and more goods and services
can be bought.
C. Given the price level, the nominal quantity of money divided by the price level defines the real quantity of money.
D. The nominal value of a good is its value in This statement is the only INCORRECT
terms of some other good, service, or bundle statement. The nominal value of a good is its value in terms
of goods money, while the real value is value in of money, while the real value is in terms of some other good,
terms of money. service, or bundle of goods.
Your answer is correct.
The correct answer is:
The nominal value of a good is its value in terms of some other good, service, or bundle of goods money, while the real value
is value in terms of money.
,Question 2
Correct
Mark 1.00 out of 1.00
This question is based on the following diagram below:
Which one of the following statements is INCORRECT?
Select one:
A. The movement from point c on curve IS1 to point a on curve IS is caused by a change in any of the autonomous
factors that decrease the demand for goods.
B. The IS curve may shift from IS to IS1 because of an increase in consumer confidence.
C. The IS curve may shift from IS to IS1 This statement is the only INCORRECT statement. An increase in the
because of an increase in the tax rate. tax rate will shift the IS curve leftwards (from IS1 to IS).
D. A decrease in the interest rate causes the movement from point a to point b on curve IS.
Your answer is correct.
The correct answer is:
The IS curve may shift from IS to IS1 because of an increase in the tax rate.
,Question 3
Correct
Mark 1.00 out of 1.00
Comparing the impact in the IS-LM model for a closed economy of an expansionary monetary policy with a contractionary
fiscal policy on investment spending, the result is that:
Select one:
A. In the case of monetary policy, investment spending is higher because the interest rate is lower. In the case of
fiscal policy, investment spending is lower because the level of output and income is lower.
B. In the case of monetary policy, investment spending is higher because the interest rate is lower. In the case of fiscal
policy, investment spending is indeterminate because the level of output and income is higher, and the interest rate is
lower.
C. In both cases, investment spending decreases since the interest rate increases.
D. In the case of monetary policy, investment spending is lower because the interest rate is higher. In the case of fiscal
policy, investment spending is higher because the level of output and income is higher.
Your answer is correct. See the chain of events below.
Expansionary monetary policy Contractionary fiscal policy
Chain of events Chain of events
Impact on the financial market Impact on the goods market
MonetaryExpansion→i↓ G↓→ Z↓→ Y↓
i↓ → Md↑→ M↑ Y↓→ YD↓→ C↓
Y↓→ I↓
Impact on the goods market Impact on the financial market
i↓ → I↑ → Z↑ → Y↑ i=ἶ
Y↑ → I↑ Y↓→ Md↓→ M↓
Y↑ → YD↑ → C↑
Back to the financial market
Y↑ → Md↑ → M↑
The end result The end result
, The end result is that an The end result is that the decrease in
expansionary monetary policy government spending at a given interest
results in an increase in output rate leads to a decrease in output and
and income level. If the IS-LM income level. If the IS-LM model presents
model presents this, the LM this, the IS curve shifts to the left.
curve shifts downwards.
The correct answer is:
In the case of monetary policy, investment spending is higher because the interest rate is lower. In the case of fiscal policy,
investment spending is lower because the level of output and income is lower.
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