These are Exam questions and solutions as well as those that were found in assignments, study guides and practice questions. When you work through these together with explanations in your study guide, you will gain an excellent understanding of concepts, theories, techniques and methods which will ...
Question 1
a) List the three withdrawals from the circular flow if income and spending.
b) Price stability is one of the macroeconomic objectives. List four other objectives.
c) Explain the difference between gross domestic product (GDP) and gross national income (GNI).
d) In the table below, provide any three differences between the consumer price index and the producer
price index.
Consumer Price Index Producer Price Index
Question 2
a) Use examples to explain the difference between contractionary fiscal policy and expansionary fiscal
policy.
b) Consider the following statement and answer the questions that follow:
In 2007, the US economy entered into the worst recession since the Great Depression. Real GDP
declined by 5,1% and the unemployment rate rose from 4,4% to 10,1%.
Use the AD-AS framework to explain how monetary policy can be used to address the problem of
declining output and rising unemployment.
c) Illustrate and explain, by using a diagram, what will happen to the exchange rate between the rand
and the US Dollar if South African tourists to the United States increase.
Question 3
a) Explain why the simple Keynesian multiplier tends to be bigger than the multiplier derived after the
introduction of the government sector.
b) Suppose you are given the following information about the South African economy. Use the
information to answer questions (i), (ii), and (iii).
, (i) Calculate the marginal propensity to consume and the marginal propensity to save.
(ii) Calculate the multiplier.
(iii) Indicate on the table, the value of saving at income levels 1300 and 1500.
c) Explain how a 1% decrease in the repo rate could affect the general price level in the economy.
Question 4
a) Write a paragraph in which you explain two supply-side policies and two demand-side policies that
can be used to reduce unemployment.
b) Name any two policies that can be used to combat each of the following:
(i) Cost-push inflation
(ii) Demand-pull inflation
c) Define the following concepts:
(i) Economic growth
(ii) Unrecorded activity
(iii) Business cycle
(iv) Capital deepening
(v) Domestic demand.
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ivann. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R200,00. You're not tied to anything after your purchase.
