Summary ECS2602 New-exam-Notes.

1. Which one of the following statements is not a macroeconomic issue? 1. The unemployment rate in South Africa, according to the strict definition, was 26,6% in 2016. 2. The drought experienced in 2015/16 reduced many crop harvests and caused food price inflation in South Africa. 3. The annual inflation rate in South Africa rose from 2015 to 2016. 4. Because of high inflation, it is expected that the interest rate will increase. 5. The drought experienced in 2015/16 reduced the total maize crop harvested and caused the price of maize in South Africa to rise. 2. Which of the following would be included in the calculation of gross domestic product (GDP) of South Africa? a. A citizen from Zimbabwe (foreign country) earns a wage at a gold mine in South Africa. b. A farmer from Gauteng (South Africa) buys his neighbour's tractor. c. Ford Motor Company of America builds an assembly plant in the Eastern Cape (South Africa). d. Exports of agricultural products to Britain. e. Imports of motorcars from Japan to South Africa. 1. a, b, c, d and e 2. Only a, c and d 3. Only b, c and e 4. Only a and c 5. Only b and e 3. Which of the following are endogenous variables in the goods market model? 1. The level of output and income and investment spending. 2. Marginal propensity to consume and the level of output and income. 3. The level of output and income. 4. Investment spending. 4. The difference between expenditure on the gross domestic product (GDP) and gross domestic expenditure (GDE) is that … 1. expenditure on the GDP includes both imports and exports, while GDE includes exports and excludes imports. 2. expenditure on the GDP includes exports and excludes imports, while GDE includes both imports and exports. 3. expenditure on the GDP includes exports and excludes imports, while GDE includes imports and excludes exports. 4. expenditure on the GDP includes imports and excludes exports, while GDE includes exports and excludes imports. 5. Expenditure on the gross domestic product is … a. spending on goods and services produced inside the borders of a country, including imports and excluding exports. b. spending on goods and services produced inside the borders of a country, excluding imports and including exports. c. the same as the demand for domestic goods. d. the same as the domestic demand for goods. 1. a and c 2. a and d 3. b and c 4. b and d 6. In our goods market model an increase in the demand for goods implies … a. an increase in output b. an increase in income c. an increase in the level of employment d. a decrease in unemployment e. a decrease in savings 1. a, b, c and d 2. a, b, c and e 3. a, b, d and e 4. a, c, d and e 5. Not option 1, 2, 3 or 4 7. Which of the following are correct in terms of the goods market model? a. G↑ → Z↑ → Y↑ → YD↑ → C↑ b. I↑ → Z↑ → Y↑ → YD↑ → C↑ c. T↓ → Z↑ → Y↑ → YD↑ → C↑ d. c0↑ → Z↑ → Y↑ → YD↑ → C↑ 1. Only a, b and c 2. Only a, b and d 3. Only b, c and d 4. Only a, c and d 5. a, b, c and d 8. Which of the following statements is/are correct in terms of the following consumption function C = c0 +cYD? a. Men and woman will consume more if their income increases. b. Y↓ → C↓. c. There is a positive relationship between income and consumption. d. A change in the marginal propensity to consume will cause a change in consumption spending. 1. a, b, c and d 2. Only a, b and c 3. Only b and c 4. Only b, c and d 5. Not option 1, 2, 3 or 4 Question 9 is based on the following diagram