Ecs1601 assignmen

Ecs 1601 Assignment



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1 second semester 2

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-2020
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DUE 21 AUGUST 2020
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| (GREAT MINDS TUTORIALS :RANDBURG)
FOR ANY COMMENTS AND QUESTIONS CONCERNING THIS ASSIGNMENT AND SUBJECT MATTER.




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, Unique number : 862838

Closing Date : 21 August 2020

1.1 The three major flows in any economy are …

[1] income, spending and saving.

[2] income, government spending and consumption.

[3] spending, production and investment.

[4] production, income and spending.

These are the flows that are discussed in the circular flow model.

1.2 The two major markets in the circular flow of income and expenditure are the …

[1] foreign exchange market and factor market.




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[2] goods market and factor market.




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[3] goods market and services market.




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[4] factor market and production market.




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These are the two markets the goods market is where households purchase goods and services,
whilst the Factor market is owned by households who sell factors of productions to firms.
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1.3 Which one of the following statements on the remuneration of the factors of production is true?
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[1] The remuneration for capital is profit, as the business aims to earn a profit on its
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financial investments.
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[2] The remuneration for labour is rent, as workers are able to pay their rent with the

money they earn.
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[3] The remuneration for entrepreneurship is a salary, as entrepreneurs are also
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rewarded for their efforts.

[4] The remuneration for natural resources is rent, as natural resources consist of all gifts of
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nature.
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The following are different Factors of production and their rewards

Natural resources (Land) rent
Capital Interest
Labour Wages /Salary
Entrepreneurship Profit


1.4 In the circular flow of income and spending in South Africa, _____________ firms in the factor
market becomes __________ households, while ____________ households in the goods market
becomes ______________ firms. Expenditure by foreigners on South African products constitutes
_______________ the circular flow.


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