⋆ ⋆ ⋆
]]
ECS1601: ECONOMICS 1B
(MACROECONOMICS I)
May/June Examination 2026 — Revision Guide
Based on May/June 2025 & May/June 2024 Past Papers
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
Economics / Macroeconomics — UNISA
Exam Revision Guide
ECS1601
Module Code:
Economics 1B (Macroeconomics I)
Module Name:
May/June 2025 & May/June 2024
Exam Papers:
May/June Examination 2026
Prepared For:
100 marks (two papers, 50 marks each)
Total Marks:
25 MCQ per paper × 2 marks each
Format:
Study this guide carefully. Focus on understanding core concepts, not just memoris-
ing. Work through every question and diagram.
Exam Revision Notes | ECS1601 | 2026
,ECS1601 | Exam Revision May/June Examination 2026
About This Revision Guide
This document covers the full ECS1601 syllabus as tested in the May/June 2025 and
May/June 2024 examination papers. Each question is drawn from confirmed past-paper
topics and is answered in thorough study-note style. The exam consists of two papers
of 25 multiple-choice questions (2 marks each), totalling 100 marks. Key learning
units tested are:
• LU1 – The Macroeconomic Environment and Circular Flow
• LU2 – Money, the Monetary Sector and Monetary Policy
• LU3 – Government, Fiscal Policy and the Public Sector
• LU4 – South Africa’s Economic Performance (GDP, Inflation, Unemployment)
• LU5 – The Keynesian Model (Expenditure Approach)
• LU6 – The Foreign Sector and Balance of Payments
• LU7 – Keynesian Model Including Government and Foreign Sector
Page 2 of 20 ⋆
,ECS1601 | Exam Revision May/June Examination 2026
PAPER 1: MAY/JUNE 2025
ECS1601 – Economics 1B | 50 Marks | 25 Questions
Instructions: Each question carries 2 marks. Only one option is correct per question.
Read carefully – distractors are designed to test understanding, not just recall.
Question 1 [2 marks]
Question: Which of the following best describes the circular flow of income in a four-
sector economy?
(1) Households, firms, the monetary sector, and savings only.
(2) Households, firms, government, and the foreign sector interacting through product and
factor markets.
(3) Firms and government interacting through the goods market alone.
(4) Households and firms only, with no external flows.
Answer: Correct Answer: (2)
The circular flow model in a four-sector economy includes:
• Households – supply factors of production (labour, capital, land) and receive factor
income (wages, rent, interest, profit).
• Firms – produce goods and services; pay factor incomes; receive spending from all
sectors.
• Government – collects taxes (leakage/withdrawal) and injects government spend-
ing (G).
• Foreign sector – generates exports (X, an injection) and imports (Z, a leakage).
Key Concept
Injections into the circular flow: Investment (I), Government spending (G),
Exports (X).
Leakages/Withdrawals: Savings (S), Taxes (T), Imports (Z).
Equilibrium: S + T + Z = I + G + X
Option (1) is incomplete; (3) ignores households and other sectors; (4) is only a two-
sector model.
Page 3 of 20 ⋆
, ECS1601 | Exam Revision May/June Examination 2026
Question 2 [2 marks]
Question: In the circular flow model, which of the following is an example of a leak-
age?
(1) Government spending on infrastructure.
(2) Exports to neighbouring countries.
(3) Savings deposited in banks.
(4) New business investment.
Answer: Correct Answer: (3)
A leakage (withdrawal) is any income earned but not spent on domestically produced
goods or services. The three leakages are:
• Savings (S) – income withheld from the spending stream.
• Taxes (T) – income paid to government and not directly spent on goods.
• Imports (Z) – spending directed toward foreign-produced goods.
Options (1), (2), and (4) are all injections (G, X, and I respectively).
Exam Tip
A quick test: does money leave the domestic spending stream? If yes, it is a leak-
age. If money enters the stream from outside, it is an injection.
Question 3 [2 marks]
Question: Gross Domestic Product (GDP) is best defined as:
(1) The total income earned by South African citizens, wherever they live.
(2) The total value of all goods and services, including intermediate goods, produced
within a country in a given year.
(3) The total value of all final goods and services produced within the borders of a country
in a specific period.
(4) The total value of exports minus imports over a given year.
Answer: Correct Answer: (3)
GDP is the total market value of all final goods and services produced within
Page 4 of 20 ⋆
]]
ECS1601: ECONOMICS 1B
(MACROECONOMICS I)
May/June Examination 2026 — Revision Guide
Based on May/June 2025 & May/June 2024 Past Papers
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
Economics / Macroeconomics — UNISA
Exam Revision Guide
ECS1601
Module Code:
Economics 1B (Macroeconomics I)
Module Name:
May/June 2025 & May/June 2024
Exam Papers:
May/June Examination 2026
Prepared For:
100 marks (two papers, 50 marks each)
Total Marks:
25 MCQ per paper × 2 marks each
Format:
Study this guide carefully. Focus on understanding core concepts, not just memoris-
ing. Work through every question and diagram.
Exam Revision Notes | ECS1601 | 2026
,ECS1601 | Exam Revision May/June Examination 2026
About This Revision Guide
This document covers the full ECS1601 syllabus as tested in the May/June 2025 and
May/June 2024 examination papers. Each question is drawn from confirmed past-paper
topics and is answered in thorough study-note style. The exam consists of two papers
of 25 multiple-choice questions (2 marks each), totalling 100 marks. Key learning
units tested are:
• LU1 – The Macroeconomic Environment and Circular Flow
• LU2 – Money, the Monetary Sector and Monetary Policy
• LU3 – Government, Fiscal Policy and the Public Sector
• LU4 – South Africa’s Economic Performance (GDP, Inflation, Unemployment)
• LU5 – The Keynesian Model (Expenditure Approach)
• LU6 – The Foreign Sector and Balance of Payments
• LU7 – Keynesian Model Including Government and Foreign Sector
Page 2 of 20 ⋆
,ECS1601 | Exam Revision May/June Examination 2026
PAPER 1: MAY/JUNE 2025
ECS1601 – Economics 1B | 50 Marks | 25 Questions
Instructions: Each question carries 2 marks. Only one option is correct per question.
Read carefully – distractors are designed to test understanding, not just recall.
Question 1 [2 marks]
Question: Which of the following best describes the circular flow of income in a four-
sector economy?
(1) Households, firms, the monetary sector, and savings only.
(2) Households, firms, government, and the foreign sector interacting through product and
factor markets.
(3) Firms and government interacting through the goods market alone.
(4) Households and firms only, with no external flows.
Answer: Correct Answer: (2)
The circular flow model in a four-sector economy includes:
• Households – supply factors of production (labour, capital, land) and receive factor
income (wages, rent, interest, profit).
• Firms – produce goods and services; pay factor incomes; receive spending from all
sectors.
• Government – collects taxes (leakage/withdrawal) and injects government spend-
ing (G).
• Foreign sector – generates exports (X, an injection) and imports (Z, a leakage).
Key Concept
Injections into the circular flow: Investment (I), Government spending (G),
Exports (X).
Leakages/Withdrawals: Savings (S), Taxes (T), Imports (Z).
Equilibrium: S + T + Z = I + G + X
Option (1) is incomplete; (3) ignores households and other sectors; (4) is only a two-
sector model.
Page 3 of 20 ⋆
, ECS1601 | Exam Revision May/June Examination 2026
Question 2 [2 marks]
Question: In the circular flow model, which of the following is an example of a leak-
age?
(1) Government spending on infrastructure.
(2) Exports to neighbouring countries.
(3) Savings deposited in banks.
(4) New business investment.
Answer: Correct Answer: (3)
A leakage (withdrawal) is any income earned but not spent on domestically produced
goods or services. The three leakages are:
• Savings (S) – income withheld from the spending stream.
• Taxes (T) – income paid to government and not directly spent on goods.
• Imports (Z) – spending directed toward foreign-produced goods.
Options (1), (2), and (4) are all injections (G, X, and I respectively).
Exam Tip
A quick test: does money leave the domestic spending stream? If yes, it is a leak-
age. If money enters the stream from outside, it is an injection.
Question 3 [2 marks]
Question: Gross Domestic Product (GDP) is best defined as:
(1) The total income earned by South African citizens, wherever they live.
(2) The total value of all goods and services, including intermediate goods, produced
within a country in a given year.
(3) The total value of all final goods and services produced within the borders of a country
in a specific period.
(4) The total value of exports minus imports over a given year.
Answer: Correct Answer: (3)
GDP is the total market value of all final goods and services produced within
Page 4 of 20 ⋆
