ECS1601
ASSESSMENT 3
,9/17/23, 8:11 PM Assessment 3: Attempt review
UNISA 2023 ECS1601-23-S2 Online assessments Assessment 3
QUIZ
Started on Sunday, 17 September 2023, 7:11 PM
State Finished
Completed on Sunday, 17 September 2023, 8:10 PM
Time taken 59 mins 2 secs
Grade 8.00 out of 20.00 (40%)
Question 1
Complete
Mark 1.00 out of 1.00
Which of the following statements is/are correct about what in uences South
African exports?
a) Changes in exchange rates do have an in uence on South African exports.
b) Changes in economic conditions in the rest of the world.
c) Changes in the demand for exports.
e) International competitiveness does not in uence exports.
a and b
a and c
a, b and e
a, b and c
a, c and e
SA exports are in uenced by economic conditions in the rest of the world,
international competitiveness, exchange rates, and the demand for exports does not
depend on the income level in SA; therefore, export spending is exogenous.
Question 2
Complete
Mark 1.00 out of 1.00
When government spending is increased, the aggregate spending curve_______.
a. swivels down
b. shifts downward
c. shifts upward
d. swivels upward
A change in government spending causes a shift of the aggregate spending curve
either upwards or downwards. When government spending is increased, the
aggregate spending curve shifts upwards and as a result, aggregate expenditure
increases. Please see page 141 in the prescribed book. A swivel of the aggregate
spending curve either up or down is caused by a change in the tax rate.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=13449446&cmid=622823 1/11
, 9/17/23, 8:11 PM Assessment 3: Attempt review
Question 3
Complete
Mark 0.00 out of 1.00
If the government increases its expenditure, but keeps the tax rate constant, we will
nd that consumption expenditure______, total tax revenue_____, and investment
spending______.
a. stays the same, stays the same, stays the same
b. increases, stays the same, stays the same
c. increases, increases, stays the same
d. increases, increases, increases
Remember that our frame of reference is the simple Keynesian model. An increase in
G leads to an increase in income (Y) as the increase in expenditure has to be
received by some factors of production as income. The increase in income will result
in an increase in induced consumption and also an increase in the amount of tax
that has to be paid by the receivers of the higher income. Investment spending,
however, is autonomous and does not depend on the income level and will therefore
not be affected. Therefore, the sentence should read as follows: “If the government
increases its expenditure, but keeps the tax rate constant, we nd that consumption
expenditure increases, total tax revenue increases, and investment spending stays
the same.
Question 4
Complete
Mark 0.00 out of 1.00
Assume that country A relies more heavily on imports than country B, while other
macroeconomic conditions are the same. If there is a positive relationship between
domestic economic activity and imports, then the multiplier of country A will be_____.
a. larger than country B’s.
b. smaller than country B’s.
c. as large as country B’s.
d. uncertain.
Country A has a larger marginal propensity to import(MPM) that is larger than
Country B, ceteris paribus. Since the Multiplier is de ned as:
=1/1-c(1-t)+m
As the MPM increases, this makes the multiplier decreases, thus the multiplier for
Country A will be small than the multiplier for Country B.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=13449446&cmid=622823 2/11
