Assessment 4
Started on Tuesday, 3 September 2024,
State Finished
Completed on Tuesday, 3 September 2024,
Time taken
Marks 30.00/30.00
Grade 100.00 out of 100.00
Question 1
Which one of the following is NOT a purpose of economic theory?
a.
to help us to understand what is happening in all aspects of the real world.
b.
to describe what happens in the real world.
c.
to serve as a basis for policy decisions.
d.
to help us predict what will happen if something changes.
e.
to help us explain what is happening in the economy.
Feedback
Economic theory has three main purposes, namely;(i) to explain how different things
are related in the complex real economic world, (ii)to predict what will happen if
something changes and (iii) to serve as a basis for the formulation and analysis of
decisions on economic policy. See pages 12 to 13 of the prescribed book.
The correct answers are: to help us to understand what is happening in all aspects of
the real world., to help us explain what is happening in the economy.
Question 2
Which one of the following statements is true about causality and correlation?
a.
Causation between two variables proves correlation.
b.
An example of correlation is when an increase in the value of imports causes a rise
in economic growth.
c.
Causality between two variables always implies correlation.
d.
Correlation between variables occurs when two variables have a relationship
Feedback
Correlation does not imply causation. Correlation between variables occurs when
two variables have a relationship.
The correct answer is: Correlation between variables occurs when two variables
have a relationship
Question 3
Consider the circular flow of income. Which of the following is correct?
a.
The government sector can purchase factors of production in the factor market.
2
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