Exam (elaborations)

ECS2602 EXAM PREP 2022 – Complete Questions & Answers.

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Course
ECS2602 - Macroeconomics (ECS2602)

Institution
University Of South Africa

ECS2602 EXAM PREP 2022 – Complete Questions & Answers. This is an all-inclusive and complete guide to ECS2602 - Macroeconomics. Autonomous consumption will ________________ while induced consumption is influenced by _________________. 1. decrease if income decreases the level of disposable i...

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Uploaded on May 30, 2022
Number of pages 222
Written in 2020/2021
Type Exam (elaborations)
Contains Questions & answers

ecs2602
ecs2602 macroeconomics
macroeconomics
ecs2602 exam prep 2022
ecs2602 exam prep 2022 – complete questions amp answers

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ECS2602 EXAM
PREP 2022 –
Complete
Questions &
Answers.

,2018/1 Which one of the following statements is not a macroeconomic issue?
1.1 1. The unemployment rate in South Africa, according to the strict definition, was 26,6% in
2016.
2. The drought experienced in 2015/16 reduced many crop harvests and caused food price
inflation in South Africa.
3. The annual inflation rate in South Africa rose from 2015 to 2016.
4. Because of high inflation, it is expected that the interest rate will increase.
5. The drought experienced in 2015/16 reduced the total maize crop harvested and caused
the price of maize in South Africa to rise.
2018/2 Which of the following statements are correct?
2.1 a. In macroeconomics we focus on the determination of the demand for and supply
of individual goods and the determination of their prices.
b. The impact of fiscal and monetary policy on the level of output and income is an
important topic in this module.
c. If the population of South Africa grows at 5% per year and the economic growth
rate is 3% per year, a decline in the real GDP per capita occurs.
d. Expansionary monetary policy during a recession is an example of stabilisation
policy.
e. An expansionary fiscal policy implies a decrease in government spending and/or
an increase in taxation.
1. a, b and c
2. b, c and d
3. b, d and e
4. Only b and c
5. b, c and e
Test Which of the following statements is/are correct?
Bank
a) In this module we only study the demand side of the economy which includes the
1. goods market and the financial market. The labour market form part of the supply
side analysis and are therefore excluded from this module.
b) The two most important accounts of the balance of payments are the current
account and the financial account.
c) If total output decreases with 2% during a specific year and the general price
level increases with 4% the real GDP will decrease and the nominal GDP will
increase.
1) a, b and c
2) Only a and b
3) Only a and c
4) Only b and c.
5) None of the options 1 t o 4
2018/1 Which of the following would be included in the calculation of gross domestic
product (GDP) of South Africa?
1.2
a. A citizen from Zimbabwe (foreign country) earns a wage at a gold mine in South
Africa.
b. A farmer from Gauteng (South Africa) buys his neighbour's tractor.
c. Ford Motor Company of America builds an assembly plant in the Eastern Cape
(South Africa).
d. Exports of agricultural products to Britain.
e. Imports of motorcars from Japan to South Africa.

, 1. a, b, c, d and e
2. Only a, c and d
3. Only b, c and e
4. Only a and c
5. Only b and e
2018/1 Which of the following are endogenous variables in the goods market model?
1.3 1. The level of output and income and investment spending.
2. Marginal propensity to consume and the level of output and income.
3. The level of output and income.
4. Investment spending.
Test Which of the following statements are correct? If the marginal propensity to save
Bank increases in the goods market model …
a. it implies that households save a larger proportion of a change (or increase)
in their income.
b. it implies a decrease in the marginal propensity to consume. This decrease in
the marginal propensity to consume leads to a decline in consumption
spending. A decline in consumption spending in return causes the demand
for goods to decrease and eventually output and income decline.
c. investment spending will increase.
d. investment spending will be unchanged since investment spending is not a
function of savings. It is an exogenous variable and is determined by factors
such as the interest rate, expectations, access to credit and confidence and
is therefore unchanged.
1) a, b and c
2) b and d
3) Only b and c
4) a, b and d
5) Only a and d
2018/2 Which of the following are exogenous variables in the consumption function
1.2 C = c0 + cYD?
a. The level of output and income.
b. Marginal propensity to consume.
c. Autonomous consumption.
d. Consumption spending.
1. a, b and c
2. b, c and d
3. a and d
4. b and c
5. Only b
2018/2 Autonomous consumption will ________________ while induced consumption is
influenced by _________________.
1.5
1. decrease if income decreases the level of disposable income
2. increase if income increases non-income determinants of consumer spending
3. remain unchanged the level of disposable income
2018/1 The difference between expenditure on the gross domestic product (GDP) and gross
domestic expenditure (GDE) is that …
1.4
1. expenditure on the GDP includes both imports and exports, while GDE includes exports and
2018/2
excludes imports.

, 1.3 2. expenditure on the GDP includes exports and excludes imports, while GDE includes both
imports and exports.
3. expenditure on the GDP includes exports and excludes imports, while GDE includes imports
2021/1
and excludes exports.
1.4
4. expenditure on the GDP includes imports and excludes exports, while GDE includes exports
and excludes imports.
2018/2 Which of the following statements are correct?
1.7 a. Real output and income and real GDP mean the same in our goods market
model.
b. In the consumption function C = c0 + cYD; a change in autonomous
consumption changes the vertical intercept and the C curve shifts, while a
change in marginal propensity to consume changes the slope of the C curve.
c. Using the goods market model; if the government decreases taxes by R20
million, consumer spending increase by more than R20 million.
d. In the equation C = c0 + cYD, c0 represents that part of consumption that is
not influenced by income.
1. a, b, c and d
2. Only a, b and d
3. Only c and d
4. Only a, c and d
5. Only a and d
Test Which of the following is/are correct in terms of the goods market model?
Bank 6.
a. Autonomous consumption is represented by c0 + Ī + G – cT.
b. Induced consumption is presented by cYD. \
c. The demand for goods determines the amount of goods that producers
produce and they will only change their production if the demand for goods
changes.
d. Equilibrium is presented by Y = c0 + c(Y−T) + Ī + G.
1) a, b, c and d
2) Only a, b and d
3) Only a, c and d
4) Only a, b and c
5) Only b, c and d
Test Which of the following statements with regards to the following consumption
Bank 3. function? C = c0 + cYD is/are correct?
a. A change in the marginal propensity to consume will result in a change in
income.
b. If autonomous consumption should be zero consumption will be equal to cYD.
c. A change in autonomous consumption will cause a change in marginal
propensity to consume.
1) a, b and c
2) Only a and b
3) Only a and c
4) Only b and c
5) None of the options 1 to 4
2018/1 Expenditure on the gross domestic product is …
1.5 a.spending on goods and services produced inside the borders of a country,
including imports and excluding exports.

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