STUDENTS SUCCESS
Revision Examination Tests
“Come all for this greatness”
...100% Correct Ans...
ECS1601 ASSIGNMENTS QUESTIONS AND ANSWER PACKAGES
PRINCIPALS OF ECONOMICS 2025 - DISTINCTION GUARANTEED
100%
Which of the following is/are correct?
a) Households are confronted with unlimited wants, but with limited
resources with which to satisfy those wants
b) The scarcity of resources necessitates households to make choices
ans :>both a and b are correct
Which of the following is/are correct regarding the distinction between
macroeconomics and microeconomics?
a) The price of apples at the supermarket is an example of a
macroeconomic variable.
b) An increase in the general price level (inflation) in the economy is an
example of a macroeconomic variable.
ans:>only b is correct
A flow variable is defined as a variable that is measured over a period.
Which one of the following variables is not an example of a flow
variable?
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production
ans:>[2] The balance on Sibahle's savings account
,Which of the following is not an acceptable intervention by the public
sector in a mixed economy?
[1] the provision of funds for public goods such as parks and streetlights
[2] regulation of the pricing behaviour of monopoly industries
[3] stabilisation of the economy during periods of economic instability
[4] regulation of the price increases that result from changes in patterns
of demand and supply in the competitive market
ans:>[4] regulation of the price increases that result from changes in
patterns of demand and supply in the competitive market
The factors of production in an economy are ...
[1] households, capital, land, entrepreneurship
[2] government, household, firms, natural resources
[3] natural resources (land), labour, capital, and entrepreneurship
[4] human capital, land, natural resources, technology
ans:>[3] natural resources (land), labour, capital, and entrepreneurship
Which of the following are the remuneration of the factors of production?
[1] natural resources, rent, interest, labour
[2] rent, salaries and wages, interest, profit
[3] households, land, profit, capital
[4] entrepreneur, firms, capital, labour
ans:>[2] rent, salaries and wages, interest, profit
In the circular flow of income and spending ...
[1] savings, imports, taxes are leakages, while investment, government
spending, exports are injections.
[2] imports, taxes, investments are leakages, while exports, investments,
government spending are injections.
[3] savings, exports, taxes area leakages, while imports, investments,
government spending are injections.
[4] savings, government spending, imports are leakages, while
investments, exports, taxes are injections.
ans:>[1] savings, imports, taxes are leakages, while investment,
government spending, exports are injections.
In the circular flow of goods and services ...
[1] firms sell factors of production on the goods market.
,[2] goods and services offered for sale on the goods market are
purchased by firms.
[3] households combine factors of production and produce consumer
goods and services.
[4] households offer factors of production in the factor market.
ans:> [4] households offer factors of production in the factor market.
What does the letters A, B, C and D in the figure represent?
a) A represents factors of production
b) B represents goods and services
c) C represents foreign sector
d) D represents spending by firm
[1] only a is correct
[2] only b and c are correct
[3] only b and d are correct
[4] a and b are correct, while c and d are incorrect
ans:> [3] only b and d are correct
Which of the following is not an injection into the economy of South
Africa?
[1] A domestic company in South Africa sells leather to a client that is in
Italy.
[2] A decision by Ruth to save a larger portion of her salary. [3] Spending
by the department of health on new hospital facilities.
[4] The local bakery bought a new machinery and equipment that will
improve the capacity to produce more bread.
ans:> [2] A decision by Ruth to save a larger portion of her salary.
The circular flow model reveals that an increase in South African exports
will ...
[1] increase output and income in the rest of the world.
[2] increase revenue to South African firms.
[3] increase revenue to foreign firms.
[4] decrease South African imports.
ans:> [2] increase revenue to South African firms
Which of the following is not considered a macroeconomic issue?
, [1] A surplus in the trade balance due to increasing output. [2] The
increase in inequality in the country of Botswana.
[3] The rise in general price level in Zimbabwe.
[4] The unemployment rate of a town in Limpopo province.
ans:> [4] The unemployment rate of a town in Limpopo province.
Which one of the following statements is true about correlation and
causality?
[1] Correlation between variables occurs when two variables have a
relationship.
[2] Correlation between two variables proves causation.
[3] The example of a correlation is when an increase in value of exports
cause a fall in economic growth.
[4] Causality between two variables always implies correlation.
ans:> [1] Correlation between variables occurs when two variables have
a relationship.
Which one of the following statements is incorrect?
[1] Money is different from income and wealth
[2] Income refers to reward earned in exchange for offering factors of
production in the production process
[3] It is good to hold wealth in the form of money during periods of high
inflation because the value is protected
[4] Money functions as a medium of exchange because it is generally
accepted in payment for goods and services
ans:> [3] It is good to hold wealth in the form of money during periods of
high inflation because the value is protected
Which of the following statements concerning money is correct?
[1] The value of money is not based on the confidence that financial
intermediaries will be able to control the supply to achieve stability and
that the purchasing power does not fall.
[2] Paper money was developed since specialization between countries
led to increases in trade, causing the use of coins to be inconvenient as
they were difficult to handle. [3] Credit cards are money because they
function as a medium of exchange.
[4] Electronic money is another form of money as it can be used as
means of payments.
Revision Examination Tests
“Come all for this greatness”
...100% Correct Ans...
ECS1601 ASSIGNMENTS QUESTIONS AND ANSWER PACKAGES
PRINCIPALS OF ECONOMICS 2025 - DISTINCTION GUARANTEED
100%
Which of the following is/are correct?
a) Households are confronted with unlimited wants, but with limited
resources with which to satisfy those wants
b) The scarcity of resources necessitates households to make choices
ans :>both a and b are correct
Which of the following is/are correct regarding the distinction between
macroeconomics and microeconomics?
a) The price of apples at the supermarket is an example of a
macroeconomic variable.
b) An increase in the general price level (inflation) in the economy is an
example of a macroeconomic variable.
ans:>only b is correct
A flow variable is defined as a variable that is measured over a period.
Which one of the following variables is not an example of a flow
variable?
[1] National income
[2] The balance on Sibahle's savings account
[3] Budget deficit
[4] Total production
ans:>[2] The balance on Sibahle's savings account
,Which of the following is not an acceptable intervention by the public
sector in a mixed economy?
[1] the provision of funds for public goods such as parks and streetlights
[2] regulation of the pricing behaviour of monopoly industries
[3] stabilisation of the economy during periods of economic instability
[4] regulation of the price increases that result from changes in patterns
of demand and supply in the competitive market
ans:>[4] regulation of the price increases that result from changes in
patterns of demand and supply in the competitive market
The factors of production in an economy are ...
[1] households, capital, land, entrepreneurship
[2] government, household, firms, natural resources
[3] natural resources (land), labour, capital, and entrepreneurship
[4] human capital, land, natural resources, technology
ans:>[3] natural resources (land), labour, capital, and entrepreneurship
Which of the following are the remuneration of the factors of production?
[1] natural resources, rent, interest, labour
[2] rent, salaries and wages, interest, profit
[3] households, land, profit, capital
[4] entrepreneur, firms, capital, labour
ans:>[2] rent, salaries and wages, interest, profit
In the circular flow of income and spending ...
[1] savings, imports, taxes are leakages, while investment, government
spending, exports are injections.
[2] imports, taxes, investments are leakages, while exports, investments,
government spending are injections.
[3] savings, exports, taxes area leakages, while imports, investments,
government spending are injections.
[4] savings, government spending, imports are leakages, while
investments, exports, taxes are injections.
ans:>[1] savings, imports, taxes are leakages, while investment,
government spending, exports are injections.
In the circular flow of goods and services ...
[1] firms sell factors of production on the goods market.
,[2] goods and services offered for sale on the goods market are
purchased by firms.
[3] households combine factors of production and produce consumer
goods and services.
[4] households offer factors of production in the factor market.
ans:> [4] households offer factors of production in the factor market.
What does the letters A, B, C and D in the figure represent?
a) A represents factors of production
b) B represents goods and services
c) C represents foreign sector
d) D represents spending by firm
[1] only a is correct
[2] only b and c are correct
[3] only b and d are correct
[4] a and b are correct, while c and d are incorrect
ans:> [3] only b and d are correct
Which of the following is not an injection into the economy of South
Africa?
[1] A domestic company in South Africa sells leather to a client that is in
Italy.
[2] A decision by Ruth to save a larger portion of her salary. [3] Spending
by the department of health on new hospital facilities.
[4] The local bakery bought a new machinery and equipment that will
improve the capacity to produce more bread.
ans:> [2] A decision by Ruth to save a larger portion of her salary.
The circular flow model reveals that an increase in South African exports
will ...
[1] increase output and income in the rest of the world.
[2] increase revenue to South African firms.
[3] increase revenue to foreign firms.
[4] decrease South African imports.
ans:> [2] increase revenue to South African firms
Which of the following is not considered a macroeconomic issue?
, [1] A surplus in the trade balance due to increasing output. [2] The
increase in inequality in the country of Botswana.
[3] The rise in general price level in Zimbabwe.
[4] The unemployment rate of a town in Limpopo province.
ans:> [4] The unemployment rate of a town in Limpopo province.
Which one of the following statements is true about correlation and
causality?
[1] Correlation between variables occurs when two variables have a
relationship.
[2] Correlation between two variables proves causation.
[3] The example of a correlation is when an increase in value of exports
cause a fall in economic growth.
[4] Causality between two variables always implies correlation.
ans:> [1] Correlation between variables occurs when two variables have
a relationship.
Which one of the following statements is incorrect?
[1] Money is different from income and wealth
[2] Income refers to reward earned in exchange for offering factors of
production in the production process
[3] It is good to hold wealth in the form of money during periods of high
inflation because the value is protected
[4] Money functions as a medium of exchange because it is generally
accepted in payment for goods and services
ans:> [3] It is good to hold wealth in the form of money during periods of
high inflation because the value is protected
Which of the following statements concerning money is correct?
[1] The value of money is not based on the confidence that financial
intermediaries will be able to control the supply to achieve stability and
that the purchasing power does not fall.
[2] Paper money was developed since specialization between countries
led to increases in trade, causing the use of coins to be inconvenient as
they were difficult to handle. [3] Credit cards are money because they
function as a medium of exchange.
[4] Electronic money is another form of money as it can be used as
means of payments.
