Which of the following is not considered a macroeconomic issue?
[1] A surplus in the trade balance due to increasing output. [2] The increase
in inequality in the country of Botswana.
[3] The rise in general price level in Zimbabwe.
[4] The unemployment rate of a town in Limpopo province. - ANS ✓[4] The
unemployment rate of a town in Limpopo province.
Which one of the following statements is true about correlation and
causality?
[1] Correlation between variables occurs when two variables have a
relationship.
[2] Correlation between two variables proves causation.
[3] The example of a correlation is when an increase in value of exports
cause a fall in economic growth.
[4] Causality between two variables always implies correlation. - ANS ✓[1]
Correlation between variables occurs when two variables have a relationship.
Which one of the following statements is incorrect?
[1] Money is different from income and wealth
[2] Income refers to reward earned in exchange for offering factors of
production in the production process
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[3] It is good to hold wealth in the form of money during periods of high
inflation because the value is protected
[4] Money functions as a medium of exchange because it is generally
accepted in payment for goods and services - ANS ✓[3] It is good to hold
wealth in the form of money during periods of high inflation because the value is
protected
Which of the following statements concerning money is correct?
[1] The value of money is not based on the confidence that financial
intermediaries will be able to control the supply to achieve stability and
that the purchasing power does not fall.
[2] Paper money was developed since specialisation between countries led
to increases in trade, causing the use of coins to be inconvenient as they
were difficult to handle. [3] Credit cards are money because they function
as a medium of exchange.
[4] Electronic money is another form of money as it can be used as means of
payments. - ANS ✓[2] Paper money was developed since specialisation between
countries led to increases in trade, causing the use of coins to be inconvenient as
they were difficult to handle.
Which of the following statements are correct?
a. The use of money eliminates the need for a double coincidence of wants
associated with a barter economy.
b. An economy in which goods are traded for other goods is called a barter
economy.
c. Money consists of notes and coins only.
[1] All the statements are correct.
[2] a and b
[3] a and c
[4] b and c - ANS ✓[2] a and b
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Which of the following forms of money is based solely on the function of
money as a medium of exchange?
[1] M1, M2, M3
[2] M1
[3] M2
[4] M3 - ANS ✓[2] M1
Given the following information, which option is correct?
[1] Long-term deposits are R700 000
[2] M1 is R350 000
[3] Cash is R200 000
[4] M2 is R500 000 - ANS ✓[1] Long-term deposits are R700 000
Which of the following statements regarding financial intermediaries
is/are correct?
a) Financial institutions channel funds from surplus economic units to
deficit economic units.
b) Financial institutions channel funds from surplus household to deficit
household units only.
c) John saves a portion of his monthly income at his local bank. We can
conclude that John is an example of a surplus unit.
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d) Sarah has a financial emergency and goes to her local bank to borrow R3
000, which she will pay at a later date. We can conclude that Sarah is an
example of a surplus unit.
[1] only b is incorrect
[2] both a and b are correct
[3] both a and c are correct
[4] only d is correct - ANS ✓[3] both a and c are correct
Which one of the following statements regarding the demand for money is
true?
[1] Economic participants hold money for transaction purposes only.
[2] When money is held as an asset, it is referred to as the demand for
active balances.
[3] The demand for active balances depend on the level of income and the
speculative demand for money depends on the level of interest rate.
[4] When economic participants hold money as an asset, they earn interest
- ANS ✓[3] The demand for active balances depend on the level of income and
the speculative demand for money depends on the level of interest rate.
If national income increases from R150 billion to R200 billion, the money
demand for transaction purpose will ______ and the demand curve for money
will______.
[1] decrease; make a leftward shift
[2] increase; remain the same
[3] cannot be determined; remain the same
[4] increase; make a rightward shift - ANS ✓[4] increase; make a rightward
shift
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