New And Precise Micro Ans Macro Economics

New And Precise Micro Ans Macro Economics

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

QUESTION 1 1.1. D Various possible answers are provided for each question. Choose the correct answer and only write down the letter next to the question Ex 1 A. 1.1 Which ONE of the following is not a method of calculating national income? A expenditure method B output method C income method D taxation method 1.2 Technological development is essential for future economic growth because it 1.2 D A accelerates the economic growth rate B increases the competitiveness of industries C leads to further inventions, innovations and scientific discoveries D all the above-mentioned 1.3 An increase in the following would likely lead to a decrease in national income: A consumption expenditure B plant and equipment investment C imports 1.3 C D residential construction 1.4 Which ONE of the following is not a wage system? 1.4 C A incentive B piece C olace 34 D Time 1.5 Which of the following would be considered a transfer payment? A payment for a train journey B monthly instalments on a car C social security payments 1.5 C D payment for a room in a hotel 1.6 GDP is the market value of all final goods and services produced in a … A given period of time 1.6 A B given period of time after deduction of indirect business taxes C given period of time after deduction of depreciation D given period of time excluding exports 1 .7 The most general scale used to measure inflation is the … index. A consumer’s B consumer’s price 1.7 B C production price D selling price

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

1.8 Stagflation occurs where prices 1.8 C A drop in an economic recession B rise in an economic revival C rise in an economic recession D drop in an economic revival 1.9 Macro-economics … 1.9 D A studies the functioning of the economy in its entirety B offers explanations for variations in economic processes over time 35 C measures economic processes over time D involves all of these 1.10 The national income is a measure of :: 1.10 A A income earned in producing the GOP B earned and unearned incomes received in a given period of time C income earned in producing the GOP less transfer payments D income earned in producing the GOP minus indirect business taxes 1.11 Consumers will tend to buy more of the product when: A its price is reduced 1.11 D B their income rise C the prices of competing products rise D all the above-mentioned 1.12 The following factors influence the supply of labour: (i) labour force 1.12 C (i) , (ii) and (iii) (ii) pension age (iii) risk factor involved in various occupations (iv) MIP of labour A (i), (ii) and (iv) B (i) and (ii) C (i) , (ii) and (iii) 0 (iii and (iv) 1.13 Which of the following is not a method to combat unemployment? 1.13 D A economic growth B unemployment insurance 36 C inward industrialization D legal tender 1.14 An increase in supply means that … 1.14 B A there has been an increase in demand B the supply curve has shifted to the right C there has been a decrease in demand D none of the above-mentioned

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

1 .15 Which of the following is NOT a production factor? 1.15. A A profits B labour C machinery D knowledge 1.16 The position of those workers who find themselves temporarily between jobs,is referred to as. … Unemployment 1.16. A A frictional B Structural C seasonal D cyclical 1.17 The most important restriction(s) on trade unions is/are…. 1.17. D A prohibition on party political activities B prohibition on strikes C that certain occupations are excluded D all the above-mentioned 1.18 The components of money are : 1.18. (i), (ii), (iii) (i) notes and coins (ii) saving deposits (iii) call money (iv) deposits at call at acceptance banks A (i) ,(ii),(iii) 8 (i) , (ii) C (iii),(iv) D ((i), (iii) 1.19 Which of the following categories of taxes provide the largest percentage of tax revenues? A individual income tax 1.19. A B excise taxes C property taxes D employment taxes 1.20 Which instrument is used to determine economic growth? 1.20. C A CPIX B LFS C GOP D PPI (20 X1 =20) (20)

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

QUESTION 2 Use the information in the table below and answer the questions that follow: Q 2. A. R 100 200 100 Wages Workers demanded Workers supplied A. R 100 200 100 B. R200 150 150 C. R300 100 200 D. R400 50 250 QUESTION3 3.1 Use the following information and do the necessary calculations: GOP@ market prices Net factor payments to foreign countries Indirect taxes Provision for depreciation Subsidies R296 667 R 8 182 R 35 120 R 47 007 R 5 830 3.1 .1 GNP @ market price GDP + NFP = GNP 296,667 + 8,182 = 304,849 3.1.2 NNP@ market price GNP – Depreciation = NNP 304,849 – 47,007 = 257,842 3.1.3 NNI NNP – Indirect Taxes 257,842 – 35,120 = 222,722 (1) (1) (1) 3.2 Answer QUESTON 3.2.1 and QUESTION 3.2.2 with reference to the following information: Consumer spending 80 000 Investment spending 120 000 Government spending 35 000 Net foreign spending ( X-M) -25 000 Provision for depreciation 8 000 Net factor payments to foreign countries 12 000

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

Indirect taxes 13 000 Subsidies 8 000 3.2.1 The GDE at market price GDP @ MP = C + G + I + NX 80,000 + 35,000 + 120,000 + (-25,000) = 210,000 3.2.2 GOP at factor cost GDP @ FC = GDP @ MP – Indirect Taxes + Subsidies 210,000 – 13,000 + 8,000 = 205,000 (1) (1) (5) QUESTION 4 Name the FIVE macro economic objectives as well as the instruments used to measure it. (10) Answer

1. Sustainability: The sustainability of economic growth is an objective of macroeconomics. This is measured by real GDP growth rate

2. Employment: Maximizing employment levels in an economy is another key objective of macroeconomic policies. It is measure by unemployment as a fraction of the labour force.

3. Price Stability: Prices of goods and services need to increase in a controlled fashion. This is measured by CPI or WPI Inflation.

4. Maintaining a healthy BoP: The capital flows and net exports are an important objective of the macroeconomic policy for a stable currency. This is measured by trade deficit and capital flows.

5. Increasing Productivity: This is measured by labour force participation and increased technological advancement

QUESTION 5 5.1 Discuss the FOUR types of unemployment. (5X4= 20) Answer The four types of employment are:

1. Full time: This involves working on regular weekly basis full time. 2. Part time: This involves working on a regular basis but only for part of the working hours 3. Casual Employment: Casual employees work on an irregular basis as and when needed 4. Apprenticeship: These are generally trainees working on probation while learning on the job

5.2 Complete the following: The demand for labour is always a ( a) derived demand. The demand for labour is determined by the (b) price of the final product and the (c) wage rate of labour. (3) (23) •

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

• QUESTION 6 Choose the concepts in COLUMN A to match the description from COLUMN B.Write only the letter (a-j) next to the question number in the answer book, for example 6.1 (a) COLUMN A 6.1 postponed payments – credit 6.2 transactional motive – influenced by government transactions 6.3 demand for money – call deposits 6.4 precautionary motive – to cool down economy 6.5 speculative motive – need to hold money 6.6 supply of money – policy to stimulate the economy 6.7 component of money – savings deposit 6.8 SARB – banker of the state 6.9 deflation – influenced by income and price level 6.10 expansionary policy – policy to stimulate the economy QUESTION 7 7.1 Complete the following: COLUMN B A) call deposits B) influenced by government transactions • C) credit D) banker of the state E) to cool down economy F) need to hold money G) influenced by income and price level H) savings deposit I) related to the store function of money J) policy to stimulate the economy {10x 1 = 10) (10) 7.1.1 Visible exports – Visible Imports … = trade balance 7.1.2 Visible balance+ invisible balance =?Total Balance of Trade. {2 x1 = 2) 41 • • 7.2 The following figures are those of a countries balance of payments: Net gold exports R 185 000 Goods exports R 315 000 Visible imports R 170 000

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

Services receipts R 30 000 Net transfers R 20 000 Capital transfer account -R 120 000 Balance on financial account R 80 000 Unrecorded transactions R 5 000 Use the given information to determine the following 7.2.1 Balance of trade 80,000 + 185,000 + 315,000 + 30,000 + 5,000 + 20,000 -170,000 -120,000 = 345,000 7. 2.2 Balance on current account 315,000 + 30,000 + 20,000 -170,000 = 195,000 7.2.3 Change in net gold and foreign reserves 185,000 QUESTION 8 8.1 Who is the Minister of Finance? The Minister of Finance is a Government official elected to form Government budget, control and stimulate the economy and aid macroeconomic policies. 8.2 Differentiate between the fiscal and monetary policy Answer Fiscal policy is a macroeconomic tool used to control economic objectives via trade and fiscal deficits. On the other hand, monetary policies involve use of interest rates and Government intervention to guide the economy. (1) (1) (3 X 1 =3) (5) (1) (2) 8.3 Differentiate between economic growth and economic development in table form (8) Answer Economic growth is a narrow concept as compared to economic development. Growth can be measured by National Output. Economic development encompasses the total development of a nation, including the quality of life, income distribution etc. It is a much broader term than economic growth. 8.4 Differentiate between comparative and absolute advantage (4) (15)

Answer

Absolute advantage is the economy’s ability to produce more of a certain kind of good or service. Comparative advantage is the economy’s ability to produce a good or service in a more efficient manner, at a lower marginal cost.

 

 

Assignment 2 Macro Economics B. Student 8069 FD Roodt email: Frans.Roodt@nwu.ac.za Cell: 0825596746

 

ANSWER SHEET: Q 1 – Q 2

QUESTION 1

1.1. D

1.2. D

1.3 C

1.4 C

1.5 C

1.6 A

1.17. D

1.18. (i), (ii), (iii)

1.19. A

1.20. C

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