Exam (elaborations)
ECS2602-23-S2Assessment 1
ECS2602-23-S2Assessment 1
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Question 1 Not yet answered Marked out of 1.00 Flag question Question text The main focus ofthis macroeconomics module is the study of … Select one: A. only the determination of the level
of output and income and fiscal and monetary policy impact on the financial, labour and foreign
exchange markets. B. the determinants of the short, medium and long-term growth potential of
the economy. C. the determination of output and the impact of fiscal and monetary policy on the
level of output and income. D. different theories on the determination of output in a closed
economy in the short term only.
The correct answer is:
A. only the determination of the level of output and income and fiscal and monetary policy
impact on the financial, labour and foreign exchange markets.
Question 2 Not yet answered Marked out of 1.00 Flag question Question text Adding up the total
value of production (or output) of all firms in the economy … Select one: A. may overestimate the
value of production in the economy. B. yields gross domestic product (GDP) at market prices. C.
yields gross domestic product (GDP) at constant prices. D. yields real per capita gross domestic
product (GDP).
Catgut
The correct answer is:
B. yields gross domestic product (GDP) at market prices.
Question 3 Not yet answered Marked out of 1.00 Flag question Question text This question is
based on the following diagram: Marginal propensity to consume = 4/5 Multiplier = 5 Which one
of the following policy actions will increase the level of output and income to achieve full
employment? Select one: A. A decrease in taxation of R400. B. An increase in government
spending of R1 000. C. An increase in government spending of R2 000. D. A decrease in taxation
of R500. Previous activity
The correct answer is:
C. An increase in government spending of R2 000.
Question 4 Not yet answered Marked out of 1.00 Flag question Question text This question is
based on the following diagram: By how much must taxes decrease to reach full employment?
Select one: A. 500 B. 400 C. 320 D. 2 000 Previous activity Jump to...
Catgut
I'm sorry, but the question references a diagram that I cannot see or interpret. If you could
provide more context or describe the diagram, I'd be happy to help you with the question.
Which one of the following statements is correct? Select one: A. Buying existing shares on a stock
exchange is an example of real investment. B. Real investment is spending on additions to the
capital stock and is undertaken to make profits in the future. C. Gross capital formation refers to
, spending by households, private firms, and the government on only residential capital goods. D.
Financial investment directly creates production capacity.
The correct answer is:
B. Real investment is spending on additions to the capital stock and is undertaken to make profits
in the future.
Question 6 Not yet answered Marked out of 1.00 Flag question Question text In the goods
market model autonomous consumption will ________________ while induced consumption is
influenced by _________________. Select one: A. remain unchanged; factors such as interest rates,
expectations, wealth B. increase if income increases; non-income determinants of consumer
spending C. decrease if income decreases; the level of disposable income D. remain unchanged;
the level of disposable income
Catgut
The correct answer is:
B. increase if income increases; non-income determinants of consumer spending
Question 7 Not yet answered Marked out of 1.00 Flag question Question text Which of the
following statements is INCORRECT? Select one: A. An increase in government spending and/or a
decrease in taxes can decrease cyclical unemployment. B. Jobless growth and government
budget constraints can prevent a situation of full employment in the goods market model. C.
Expansionary fiscal policy is a means to increase production, income and employment. However,
high imports, crowding out of private investment and an unsustainable budget deficit are all
constraints to the effectiveness of the expansionary fiscal policy. D. A decrease in taxes to
decrease unemployment will be as effective in a capital-intensive economy as in a labour-
intensive economy.
The correct answer is:
D. A decrease in taxes to decrease unemployment will be as effective in a capital-intensive
economy as in a labour-intensive economy.
Question 9 Not yet answered Marked out of 1.00 Flag question Question text Which one of the
following statements is INCORRECT regarding the goods market model? Select one: A.
Expansionary fiscal policy is a mean to increase production, income and employment. However,
high imports, crowding out of private investment, and a too-high budget deficit are all
constraints to this expansionary fiscal policy's effectiveness to increase output. B. A decrease in
taxes to decrease unemployment will be more effective in a labour-intensive economy than in a
capital-intensive economy. C. An increase in government spending increases income, and an
increase in income increases government spending but by less than one to one. D. Expansionary
fiscal policy can result from increased government spending and/or decreased taxes, and the ZZ
curve will shift upwards.
The correct answer is:
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