THIS DOCUMENT CONTAINS ECS1601 ASSESSEMENT 9 ALTERNATIVE TO ASSESSMENT 1 OF 2024 EXPECTED QUESTIONS AND ANSWERS. USE IT CORRECTLY AS A GUIDE TO OBTAIN ABOVE 80%
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of 1.00Started onWednesday, 31 July 2024, 3:28 PM
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Completed onFriday, 2 August 2024, 10:06 AM
Time taken1 day 18 hours
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Grade8.75 out of 10.00 (87.5%)
Which one of the following statements regarding stock and ow variables is
correct?
Select one:
a.Monthly saving is a ow variable that contributes to a stock variable.
b.Household income is an example of a stock variable.
c.Government spending is an example of a stock variable.
d.Changes in the level of employment do not come about through ows.
Which one of the following statements regarding stock and ow variables is
correct?
Select one:
a.Household income is an example of a stock variable.
b.Changes in the level of employment do not come about through ows.
c.Government spending is an example of a stock variable.
d.Monthly saving is a ow variable that contributes to a stock variable.
In the 2015 budget speech, the Minister of Finance announced an increase in taxes
amounting to R17 billion in the 2015/16 nancial year. In the context of the circular
ow, this increase in taxes will be a /an …
Select one:
a.injection.
b.withdrawal.
c.saving.
d.investment.
Which of the following is a nal good or service?
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Question 7
Completea.A haircut paid for by a student.
b.Motor vehicle windows purchased by a motor assembly plant.
c.Fertiliser purchased by a farm supplier.
d.Diesel fuel bought for a delivery truck.
Which one of the following statements describe a leakage from the circular ow of
income and spending in South Africa?
Select one:
a.Defence expenditure by South African government, via contracts with local
companies.
b.The sale of fruit exports to the European Union
c.A decision by a major supermarket chain to sell chicken from Brazil
d.Investment by a Lesotho beer company in a new brewery in South Africa
The National Treasury has announced an increase in the capital gains tax rate to
45% to increase the funding of social grants to the poor in South Africa. Which
objective of macroeconomic policy is the government trying to achieve through
this decision?
a.equitable income distribution
b.economic growth
c.balance of payments stability
d.full employment
Capital gains tax is levied on pro ts from real estate (land and buildings) and
nancial assets (shares and bonds). In other words, it is a tax levied on the pro ts
from selling real estate, on dividends earned by shareholders in companies and on
interest earned by bondholders. This tax is targeted at high-income earners in a
society with the ability to pay. Revenues generated from capital gains tax are
allocated to social grants for the poor to improve their welfare. This is meant to
reduce the extent of inequality between the rich and the poor. Therefore, the South
African government is trying to achieve the macroeconomic objective of equitable
income distribution. See Section 1.7 on page 13 of the prescribed book for a
detailed explanation of the ve objectives of macroeconomic policy.
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Question 8
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questionSuppose that a rm is spending R49 million per month on salaries, which are
allocated as follows: Monthly Salaries - 2020Monthly Salaries - 2021
CEO R 21 million R 22 million
Executives R 15 million R 16 million
Three thousand
employeesR 13 million R 14 million Assume that the CEO spend 0.5%, while executives spend 2% and employees 65%
of their monthly salaries on goods and services in both years.
(Round off your answers to two decimals). Example on how you should type in your
answers:
For percentage answer: 1,55%
For amount answer: 300,56
What is the amount that the CEO spent per month on goods and services in 2020?
Type in your answer105000
The quantity of money demanded for precautionary purposes decreases if
a.consumer incomes increase.
b.the in ation rate increases.
c.the interest rate increases.
d.total output decreases.
The demand for money for precautionary purposes is related to the function of
money as a store of value. The demand for money as a store of value depends on
interest rates. Furthermore, there is a negative relationship between this demand
for money and the interest rate. Thus, an increase in the interest rate will result in a
decrease in the quantity of money demanded for precautionary purposes.
The gure below indicates that… Question 9
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a.only the interest rate is important in determining the demand for money,
and therefore, the demand for money curve is negatively sloped.
b.both the interest rate and the level of income are important in determining
the demand for money, which is inversely related to the interest rate.
c.the position of the demand curve for money is determined by the demand
for passive balances, which is determined by the level of income.
d.an increase in the level of income in the economy will result in a
movement along the curve, as indicated by the change in equilibrium from
E0 to E1.
e.the demand for money is not a function of income, as the South African
Reserve Bank can provide people with loans should they have a shortage of
income, and therefore, income is not indicated on the graph.
Income is also an important determinant of the demand for money, especially for
transactions demand for money.The income level is not stipulated on any one of
the axes of the graph, therefore a change in income will result in a shift of the
demand for money curve.The position of the demand curve is mainly determined by
the demand for active balances, which is determined by the level of income. The
demand for money is dependent on income, as even loans require that borrowers
have an income in order to repay the loan. Furthermore, the SARB does not make
loans to private customers.
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