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ECS3701 EXAM PAXK 2024/2025
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ECS3701 EXAM PAXK 2024/2025 QUESTIONS WITH COMPLETE ANSWERS, PREPARED FOR EXAM REVISION. CONTAINS MOST RECENT PAST PAPERS WITH RESPECTIVE ANSWERS.
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, Page 2 of 71 ECS 370105/06 2024
UNIVERSITY EXAMINATIONS
May/Jun 2024
ECS3701
Monetary Economics
100 Marks
Duration: 2 Hours
First Examiner: Prof TLA Leshoro
Second Examiner: Ms T Molesane
External Examiner: Ms PA Mathebula
This paper consists of 10 pages, including this cover page and the invigilator app page. There are 5
questions in this paper.
CONFIDENTIAL
Instructions:
(1) Once you have completed your answers submit them as a single document in PDF format using the
eAssessment tool on the myExams portal. It is preferable for you to type your answers (Font: Arial 12) and
then convert your document to PDF format for submission. However, if this is not possible, you may also
write your answers down and scan them into a PDF file. Please write legibly.
(2) Start with a cover page stating the module code (ECS3701) and your student number.
(3) This should be followed by your answers to the questions.
(4) Make sure that each question and sub-questions are clearly numbered.
(5) While you are not required to cite your sources, this does not mean that you can simply copy information
from any source. You need to answer the questions in your own words. Plagiarism will not be tolerated and
may result in disciplinary action if detected. Plagiarism will result in zero marks awarded.
(6) Please ensure that you submit a declaration of honesty on myUnisa.
(7) You will need your student number and password to access this platform.
(8) You need to accept the honour pledge because it is compulsory for every student otherwise you will not be able to
access the paper, let alone upload it. This information will be used to report to the Student Disciplinary
Committee should incidents of plagiarism be suspected.
(9) Please preview and verify your document before you submit to ensure that it is free of errors, it is
readable, that your PDF document is NOT encrypted to a “secured” mode and it is NOT password
protected as these files cannot be marked. Virus-infected files will also not be marked.
(10) You have 2 hours to complete this assessment.
(11) Late submissions will NOT be marked. Emailed scripts will NOT be marked.
(12) Once you have submitted on the dedicated platform, you will receive an on-screen message of successful
submission. Please keep this email safe as a proof of your submission.
(13) If you insist on not being able to upload on the submission portal, you must contact the number and email
address provided in the QA documents posted on the announcement on the module page and provide
screenshots of the error screens.
STUDENT NUMBER
, Page 3 of 71 ECS 3701
05/06 2024
[TURN OVER]
ANSWER ALL FIVE QUESTIONS
Question 1 [25 marks]
1.1 There have been debates about how the government of South Africa can combat the increasing
inflation. While some economists are calling for the SARB to print more money, others are
against it.
As a third-year economics student, advise the government of South Africa on whether to print
more money or not. Highlight 3 implications and 3 advantages of the suggestion given. [10]
1.2 Given the global increase in inflation resulting from the Russian invasion of Ukraine, name
and explain the three tools that the South African Reserve Bank (SARB) can use to decrease
inflation. [9]
1.3 Explain the monetary transmission mechanisms. Mention the most important and most
effective monetary transmission mechanisms. [6]
, Page 4 of 71 ECS 3701
05/06 2024
Question 2 [20 marks]
2.1 If you suspect that a company will go bankrupt next year, would you rather hold bonds issued
by the company or equities issued by the company? Why? [4]
2.2 List the 4 important information found on a coupon bond. [4]
2.3 Differentiate between coupon bonds and zero-coupon bonds. [2]
2.4 Assuming you won R10 million in the Lotto jackpot, with a promise to make a payment of R2
million per year for the next 5 years with an interest rate of 15%. Calculate the amount that
will be paid to you, after 1 year and the total amount after the 5 years and indicate whether
you have really won R10 million or not. Show your calculations and define each term.
[10]
Question 3 [20 marks]
3.1 State whether each of the following statements is true or false. [10]
1. The primary functions of money in an economy are different when money is shells, gold,
or paper.
2. Monetization of debt and printing of money are the same.
3. Financial intermediaries allow small savers and borrowers to benefit from the existence of
financial markets.
4. Holding bonds is the same as holding stock.
5. Some stockholders are not residual claimants.
6. Where the payments system is heading could influence the way money will be defined in
the future.
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