Exam (elaborations)
ECS2602 ASSESSMENT 1 2024 SEMESTER 1
- Institution
- University Of South Africa (Unisa)
ECS2602 ASSESSMENT 1 2024 SEMESTER 1
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3/26/24, 10:58 PM Assessment 1 (page 1 of 30)UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 1
QUIZ
Question 1
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Which one of the following statements is correct?
Select one:
A. An increase in taxes implies the implementation of expansionary fiscal policy.
B. A decrease in the interest rate implies the implementation of expansionary monetary policy.
C. Inflation targeting is an example of a stabilisation policy.
D. A contractionary monetary policy implies a decrease in the interest rate to increase the money supply.
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,3/26/24, 10:57 PM Assessment 1 (page 2 of 30)
UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 1
QUIZ
Question 2
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Which one of the following statements is INCORRECT regarding the goods market model?
Select one:
A. A decrease in taxes to decrease unemployment will be more effective in a labour-intensive economy than in a
capital-intensive economy.
B. An increase in government spending increases income, and an increase in income increases government spending
but by less than one to one.
C. 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.
D. Expansionary fiscal policy can result from increased government spending and/or decreased taxes, and the ZZ curve
will shift upwards.
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,3/26/24, 10:57 PM Assessment 1 (page 3 of 30)
UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 1
QUIZ
Question 3
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Given the following information, answer the question.
Autonomous consumption = R100 million
Investment spending = R300 million
Government spending = R200 million
Taxes = R60 million
Marginal propensity to consume = 0.75
Full-employment level of income = R2 460 million
Which one of the following will NOT ensure that full-employment is reached?
A. A decrease in taxes of R80 million.
B. An increase in government spending of R60 million.
C. An increase in government spending of R30 million and a decrease in taxes of R40 million.
D. An increase in government spending of R20 million and a decrease in taxes of R30 million.
Clear my choice
https://mymodules.dtls.unisa.ac.za/mod/quiz/attempt.php?attempt=16466750&cmid=848052&page=2 1/1
, 3/26/24, 10:57 PM Assessment 1 (page 4 of 30)
UNISA 2024 ECS2602-24-S1 Welcome to the module ECS2602-24-S1 Assessment 1
QUIZ
Question 4
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This question is based on the following data for country PORTHOS for 2020.
Marginal propensity to consume = 0.5
Autonomous consumption = R600 million
Investment spending = R40 million
Government spending = R280 million
Taxes = R300 million
An economist Dr Bright Sithole calculated that the gap between the current equilibrium level of output and income
and the full employment level of income is R110 million.
By how much must taxes decrease to reach full employment?
Select one:
A. 770 million
B. 220 million
C. 110 million
D. 55 million
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https://mymodules.dtls.unisa.ac.za/mod/quiz/attempt.php?attempt=16466750&cmid=848052&page=3 1/1
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