First Examiner: Prof TLA Leshoro
Second Examiner: Ms T Molesane
External Examiner: Ms PA Mathebula
This paper consists of 10 pages, including this cover page and the invigilator
app page. There are 5 questions in this paper.
CONFIDENTIAL
Instructions:
(1) Once you have completed your answers submit them as a single document in PDF
format using the eAssessment tool on the myExams portal. It is preferable for
you to type your answers (Font: Arial 12) and then convert your document to PDF
format for submission. However, if this is not possible, you may also write your
answers down and scan them into a PDF file. Please write legibly.
(2) Start with a cover page stating the module code (ECS3701) and your student number.
(3) This should be followed by your answers to the questions.
(4) Make sure that each question and sub-questions are clearly numbered.
(5) While you are not required to cite your sources, this does not mean that you can
simply copy information from any source. You need to answer the questions in
your own words. Plagiarism will not be tolerated and may result in disciplinary
action if detected. Plagiarism will result in zero marks awarded.
(6) Please ensure that you submit a declaration of honesty on myUnisa.
(7) You will need your student number and password to access this platform.
(8) You need to accept the honour pledge because it is compulsory for every student
otherwise you will not be able to access the paper, let alone upload it. This information
will be used to report to the Student Disciplinary Committee should incidents of
plagiarism be suspected.
(9) Please preview and verify your document before you submit to ensure that it is free of
errors, it is readable, that your PDF document is NOT encrypted to a
“secured” mode and it is NOT password protected as these files cannot be
marked. Virus-infected files will also not be marked.
(10) You have 2 hours to complete this assessment.
(11) Late submissions will NOT be marked. Emailed scripts will NOT be marked.
(12) Once you have submitted on the dedicated platform, you will receive an on-screen
message of successful submission. Please keep this email safe as a proof of
your submission.
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05/06 2024
(13) If you insist on not being able to upload on the submission portal, you must contact the
number and email address provided in the QA documents posted on the
announcement on the module page and provide screenshots of the error
screens.
[TURN OVER]
ANSWER ALL FIVE QUESTIONS
Question 1 [25 marks]
1.1 There have been debates about how the government of South Africa can combat the
increasing inflation. While some economists are calling for the SARB to print more
money, others are against it.
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05/06 2024
As a third-year economics student, advise the government of South Africa on whether
to print more money or not. Highlight 3 implications and 3 advantages of the suggestion
given. [10]
1.2 Given the global increase in inflation resulting from the Russian invasion of Ukraine,
name and explain the three tools that the South African Reserve Bank (SARB) can use
to decrease inflation. [9]
1.3 Explain the monetary transmission mechanisms. Mention the most important and most
effective monetary transmission mechanisms. [6]
Question 2 [20 marks]
2.1 If you suspect that a company will go bankrupt next year, would you rather hold bonds
issued by the company or equities issued by the company? Why?
[4]
2.2 List the 4 important information found on a coupon bond. [4]
2.3 Differentiate between coupon bonds and zero-coupon bonds. [2]
2.4 Assuming you won R10 million in the Lotto jackpot, with a promise to make a payment
of R2 million per year for the next 5 years with an interest rate of 15%. Calculate the
amount that will be paid to you, after 1 year and the total amount after the 5 years and
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