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Summary ECS1500 ASSIGNMENT 5 Due date 29 July 2024
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UNISA 2024 ECS1500-24-Y Welcome Message Assessment 5QUIZ
Started on Friday, 19 July 2024, 1:38 PM
State Finished
Completed on Friday, 19 July 2024, 1:59 PM
Time taken 20 mins 40 secs
Marks 40.00/40.00
Grade 100.00 out of 100.00
Feedback
Excellent work! You seem to understand the content of Learning Units 6 and 7 well. Please read the
feedback provided for each question carefully and make sure you agree with the explanations
provided. Note that you are allowed to submit 3 attempts for this assessment and that the marks for
the best attempt will contribute towards your final credits.
Question 1 The producer price index can be used to predict future consumer inflation.
Correct
Mark 2.00 out of Select one:
2.00
a. True
b. False
Your answer is correct. Well done!
The production price index (PPI) can be used to predict the future consumer price index, which is
used to calculate consumer inflation. This is because an increase in production prices can be
expected to result in an increase in the price of consumer goods and services in the future. Refer to
section 7.2.2 of learning unit 7.
The correct answer is: True
Question 2 Positive economic growth occurs when total real production or income is growing at a faster rate
Correct than the population.
Mark 2.00 out of
2.00
True
False
Your answer is correct.
The statement is true.
If the population growth rate is higher than the growth rate of real production or income, the
production per capita and the income per capita will decrease, which means pressure will be placed
on already constrained resources and capital to serve a growing population. This means that less
resources will be available to provide proper infrastructure, education and health services, all of which
are among the factors needed to promote economic growth.
The correct answer is 'True'.
,Question 3
A decrease in the nominal value of exports in a particular industry is always due to a decrease in the
Correct quantity of goods and services that are exported by that industry.
Mark 2.00 out of
2.00
True
False
A decrease in the nominal value of exports in a particular industry can be due to a decrease in the
quantity of goods and services exported by that particular industry, but it can also be due to a
decrease in the prices of goods in that industry. For example, in 2014 and in 2015 a decrease in the
nominal value of the exports of the mining industry in South Africa took place, and this was in part
due to the low prices of mining commodities during those years.
The correct answer is 'False'.
,Question 4
The country of Oilpac produces oil only. It has published the following figures that indicate the
Correct quantities that were produced in gallons while prices are provided in dollars ($) per gallon.
Mark 2.00 out of
2.00
Production of oil
Quantity 2015 Price 2015 Quantity 2016 Price 2016
5 000 $2 6 000 $3
From 2015 to 2016, nominal GDP grew by_____ while real GDP at constant 2015 prices grew by
________
Select one:
a. 80%; 20%.
b. 1%; 1 000%.
c. 1 000%; 1%.
d. 20%; 50%.
e. 44%;16,67%.
Your answer is correct. Well done!
Nominal GDP is calculated by multiplying the quantity by the price for that year. Real GDP is
calculated by multiplying the quantity by a constant price, in this case 2015 prices. Therefore, nominal
GDP for 2015 and 2016 for the country of Oilpac can be calculated as follows:
Nominal GDP2015 = Quantity2015 x Price2015 = 5 000 x $2 = $10 000
Nominal GDP2016 = Quantity2016 x Price2016 = 6 000 x $3 = $18 000
The increase in nominal GDP from 2015 to 2016 = $18 000 - $10 000 = $8 000
The growth rate in nominal GDP from 2015 to 2016 can now be calculated as follows:
Real GDP for 2015 and 2016, at constant 2015 prices for the country of Oilpac, can be calculated as
follows:
Real GDP2015 = Quantity2015 x Price2015 = 5 000 x $2 = $10 000
Real GDP2016 = Quantity2016 x Price2015 = 6 000 x $2 = $12 000
The increase in real GDP from 2015 to 2016 = $12 000 - $10 000 = $2 000
The growth rate in real GDP from 2015 to 2016 can now be calculated as follows:
The correct answer is: 80%; 20%.
, Question 5
Which one of the following statements is correct?
Correct
Mark 2.00 out of Select one:
2.00
a. The basket of goods used to calculate CPI is adjusted from month to month as consumers'
expenditure patterns change.
b. The PPI includes capital and intermediate goods but excludes services.
c. A larger increase in the CPI for a particular type of good, e.g. clothing and footwear, indicates
that that particular type of good became more important in the CPI during that period.
d. The basket of goods used to calculate the PPI is the same basket of goods used to calculate
the CPI.
Your answer is correct.
The basket of goods used to calculate CPI is a fixed-weight index and is only adjusted every five years
to allow for changes in consumers' expenditure patterns.
A larger increase in the CPI for a particular type of good, e.g. clothing and footwear, indicates that the
prices of that particular type of good increased by more than previously. The weight of each group
stays the same for a 5-year-period.
A different basket of goods is used to calculate the PPI than the basket used to calculate the CPI. The
PPI includes capital and intermediate goods but excludes services.
The correct answer is: The PPI includes capital and intermediate goods but excludes services.
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