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ECS1601 Questions, Answers, Rationales | Latest Updates
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ECS1601 Questions, Answers, Rationales | Latest Updates
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ECS1601Study online at https://quizlet.com/_fx6r2k
1. Which of the following is/are correct? both a and b are
correct
a) Households are confronted with unlimited wants,
but with limited resources with which to satisfy those
wants
b) The scarcity of resources necessitate households
to make choices
2. Which of the following is/are correct regarding the only b is correct
distinction between macroeconomics and microeco-
nomics?
a) The price of apples at the supermarket is an exam-
ple of a macroeconomic variable.
b) An increase in the general price level (inflation)
in the economy is an example of a macroeconomic
variable.
3. A flow variable is defined as a variable that is mea- [2] The balance on
sured over a period. Which one of the following vari- Sibahle's savings
ables is not an example of a flow variable? account
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production
4. Which of the following is not an acceptable interven- [4] regulation of
tion by the public sector in a mixed economy? the price increas-
es that result from
[1] the provision of funds for public goods such as changes in pat-
parks and streetlights terns of demand
[2] regulation of the pricing behaviour of monopoly and supply in the
industries competitive mar-
[3] stabilisation of the economy during periods of ket
economic instability
[4] regulation of the price increases that result from
changes in patterns of demand and supply in the
competitive market
, ECS1601
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5. The factors of production in an economy are ... [3] natural re-
sources (land),
[1] households, capital, land, entrepreneurship labour, capital,
[2] government, household, firms, natural resources and entrepreneur-
[3] natural resources (land), labour, capital, and entre- ship
preneurship
[4] human capital, land, natural resources, technolo-
gy
6. Which of the following are the remuneration of the [2] rent, salaries
factors of production? and wages, inter-
est, profit
[1] natural resources, rent, interest, labour
[2] rent, salaries and wages, interest, profit
[3] households, land, profit, capital
[4] entrepreneur, firms, capital, labour
7. In the circular flow of income and spending ... [1] savings, im-
ports, taxes are
[1] savings, imports, taxes are leakages, while invest- leakages, while in-
ment, government spending, exports are injections. vestment, govern-
[2] imports, taxes, investments are leakages, while ment spending,
exports, investments, government spending are in- exports are injec-
jections. tions.
[3] savings, exports, taxes area leakages, while im-
ports, investments, government spending are injec-
tions.
[4] savings, government spending, imports are leak-
ages, while investments, exports, taxes are injec-
tions.
8. In the circular flow of goods and services ... [4] households of-
fer factors of pro-
[1] firms sell factors of production on the goods mar- duction in the fac-
ket. tor market.
[2] goods and services offered for sale on the goods
market are purchased by firms.
[3] households combine factors of production and
produce consumer goods and services.
, ECS1601
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[4] households offer factors of production in the fac-
tor market.
9. What does the letters A, B, C and D in the figure [3] only b and d are
represent? correct
a) A represents factors of production
b) B represents goods and services
c) C represents foreign sector
d) D represents spending by firm
[1] only a is correct
[2] only b and c are correct
[3] only b and d are correct
[4] a and b are correct, while c and d are incorrect
10. Which of the following is not an injection into the [2] A decision by
economy of South Africa? Ruth to save a
larger portion of
[1] A domestic company in South Africa sells leather her salary.
to a client that is in Italy.
[2] A decision by Ruth to save a larger portion of her
salary. [3] Spending by the department of health on
new hospital facilities.
[4] The local bakery bought a new machinery and
equipment that will improve the capacity to produce
more bread.
11. The circular flow model reveals that an increase in [2] increase rev-
South African exports will ... enue to South
African firms
[1] increase output and income in the rest of the
world.
[2] increase revenue to South African firms.
[3] increase revenue to foreign firms.
[4] decrease South African imports.
12. Which of the following is not considered a macroeco- [4] The unemploy-
nomic issue? ment rate of a
, ECS1601
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[1] A surplus in the trade balance due to increasing town in Limpopo
output. [2] The increase in inequality in the country of province.
Botswana.
[3] The rise in general price level in Zimbabwe.
[4] The unemployment rate of a town in Limpopo
province.
13. Which one of the following statements is true about [1] Correlation be-
correlation and causality? tween variables
occurs when two
[1] Correlation between variables occurs when two variables have a
variables have a relationship. relationship.
[2] Correlation between two variables proves causa-
tion.
[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.
14. Which one of the following statements is incorrect? [3] It is good to
hold wealth in the
[1] Money is different from income and wealth form of money
[2] Income refers to reward earned in exchange during periods of
for offering factors of production in the production high inflation be-
process cause the value is
[3] It is good to hold wealth in the form of money protected
during periods of high inflation because the value is
protected
[4] Money functions as a medium of exchange be-
cause it is generally accepted in payment for goods
and services
15. Which of the following statements concerning money [2] Paper mon-
is correct? ey was developed
since speciali-
[1] The value of money is not based on the confidence sation between
that financial intermediaries will be able to control the countries led to in-
supply to achieve stability and that the purchasing creases in trade,
power does not fall. causing the use
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