ECS1601 ASSESSMENT 6 SEMESTER 2 ASSIGNMENT 6 2024 Which of the following can cause demand-pull in ation? [1] A decrease in interest rates which leads to an increase in consumption and investment spe...
, Started on Saturday, 12 October 2024, 12:18 PM
State Finished
Completed on Sunday, 13 October 2024, 5:23 PM
Time taken 1 day 5 hours
Marks 19.00/20.00
Grade 95.00 out of 100.00
Question 1 In response to the COVID-19 pandemic, countries injected trillions of dollars into their economies to provide relief to households and firms.
Correct This response is an example of ... policy, which can result in ... inflation, ceteris paribus.
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a. expansionary; demand-pull
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question b. expansionary; cost-push
c. contractionary; cost-push
d. contractionary; demand-pull
Refer to section 10.4 of the prescribed textbook.
Question 2 The distribution effects of inflation are best described by …
Correct
Mark 1.00 out of a. borrowers benefiting at the expense of lenders.
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b. creditors benefiting at the expense of debtors.
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question c. the poor benefiting at the expense of the rich.
d. the elderly benefiting at the expense of the young.
Refer to section 10.3 of the prescribed textbook.
Question 3 The appropriate policy to combat cost-push inflation would be to increase ______, which will be illustrated by __________.
Correct
Mark 1.00 out of a. interest rates; leftward shift of the aggregate demand curve
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b. government spending; rightward shift of the aggregate demand curve
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question c. productivity; rightward shift of the aggregate supply curve
d. wages; leftward shift of the aggregate supply curve
See sections 9.1 and 10.4 of the prescribed textbook.
Question 4 Cost-push inflation can be caused by …
Correct
Mark 1.00 out of a. an increase in profit margins, a decrease in productivity and the impact of natural disasters.
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b. an increase in investment spending and government spending.
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question c. a decrease in the cost of imported capital and intermediate goods.
d. a decrease in wages and salaries.
Refer to section 10.4 of the prescribed textbook.
Question 5 The appropriate policy measure to combat inflation would be to …
Correct
Mark 1.00 out of a. increase aggregate spending.
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b. decrease taxes.
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question c. decrease productivity.
d. increase the repo rate.
, See section 10.4 of the prescribed textbook.
Question 6 Which one of the following statements is correct?
Correct
Mark 1.00 out of a. Cost-push inflation is triggered by an increase in consumption spending.
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b. Demand-pull inflation creates a situation known as stagflation.
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question c. Cost-push inflation is described as “too much money chasing too few goods”.
d. An earthquake can trigger cost-push inflation.
Refer to section 10.4 of the prescribed textbook.
Question 7 Which one of the following is an example of inflation?
Correct
Mark 1.00 out of a. A 4% increase in the tax rate.
1.00
b. A 4% increase in the petrol price.
Flag
question c. A 4% increase in the interest rate.
d. A 4% increase in the CPI.
Refer to section 10.1 of the prescribed textbook.
Question 8 Which one of the following will increase the unemployment pool?
Correct
Mark 1.00 out of a. a decrease in the number of new entrants in the labour market
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b. an increase in the number of people who are hired
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question c. an increase in the number of people looking for a job
d. a decrease in the number of people who are laid off
The unemployment pool increases if the inflow of people is more than the outflow of people. A decrease in the number of new entrants
decreases the inflow reducing the labour force and decreasing unemployment. An increase in the number of people who are hired increases
the outflow, causing a decline in the unemployment pool.
A decrease in the number of people who are laid off decreases the inflow, causing a decline in the unemployment pool. Thus an increase in
the number of people looking for a job increases the inflow, which increases the unemployment pool.
Question 9 Suppose the number of unemployed people is 19 million and employed people are 35 million. What will happen to the unemployment rate if
Incorrect workers who were just retrenched decide to leave the labour force, ceteris paribus?
Mark 0.00 out of
1.00
a. It will decrease.
Flag
question
b. It will increase.
c. It will stay the same.
If workers decide to leave the labour force if they are retrenched, the unemployment rate will increase as they will not be included in the
labour force. Although they can able to work, they are not included because they decided to leave the labour force.
Question 10 Reasons on the supply-side of the labour market for increased unemployment in South Africa could include?
Correct (a) an increase in population growth.
Mark 1.00 out of
(b) an increase in the capital intensity of production.
1.00 (c) an increase in immigration.
(d) an increase in the cost of employing labour.
Flag
question
a. a), (b) and (c)
b. c) and (d)
c. a) and (c)
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