University of Cape Town
School of Economics
Macroeconomics
ECO1011S
November Exam 2022/2023
1
University of Cape Town
School of Economics
Macroeconomics
ECO1011S
November Exam
INSTRUCTIONS
Only use PENCIL when filling in the MCQ answer sheet
Use the MCQ answer sheet provi...
University of Cape Town
School of Economics
Macroeconomics
ECO1011S
November Exam 2022/2023
, University of Cape Town
School of Economics
Macroeconomics
ECO1011S
November Exam
INSTRUCTIONS
Only use PENCIL when filling in the MCQ answer sheet
Use the MCQ answer sheet provided
Complete the bubbles for your student number before you begin!
Write in your first name, surname and student number
If you change your mind about an answer don’t cross it out, use a soft plastic eraser.
Do not turn the front page of the question paper until you are instructed to do so
Check that it’s all there: there are 70 MCQs in this exam and 21 pages
Each question has five options A-E, choose the one you think is most correct
You may not leave in the first half hour or the last 15 minutes of this exam
N.B. this is a lower negative mark than usual: statistically it means that you should
be willing to take a chance even if you are unsure of the answer.
1
, 1. A country’s circular flow of income is in equilibrium. If there is an unexpected R1 000 increase in
savings followed by a R800 decrease in taxes, which of the following statements best describes
what will happen?
A. Injections are greater than withdrawals, therefore expenditure rises, firms produce more
and gross domestic product (GDP) increases.
B. Injections are greater than withdrawals, therefore expenditure falls, firms produce less, and
gross domestic product (GDP) decreases.
C. Withdrawals are greater than injections, therefore expenditure falls, firms produce less, and
gross domestic product (GDP) decreases.
D. Withdrawals are greater than injections, therefore expenditure rises, firms produce more
and gross domestic product (GDP) increases.
E. Withdrawals are greater than injections, therefore expenditure rises, firms produce less and
gross domestic product (GDP) decreases.
2. If Nissan South Africa sells 200 Navaras for a total of €500 000 to Germany, while South Africa
imports 100 BMWs for a total of €600 000 from Germany, then,
A. South African gross domestic product (GDP) increases because it sells more Navaras.
B. South African gross domestic product (GDP) decreases because net exports fall.
C. Germany’s gross domestic product (GDP) decreases.
D. South African gross domestic product (GDP) is unaffected because local sales of local cars
are unchanged.
E. None of the above.
3. A lawyer does work for the poor pro bono, i.e. without charging a fee. These services are NOT
included in gross domestic product (GDP) because,
A. they are not final goods or services.
B. she only does this out of normal working hours.
C. that would involve double counting.
D. their value is actually charged as a tax deduction by the lawyer’s firm.
E. there is no market transaction involved.
2
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