ECS1601
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 necessitate households to make choices - (correct Answer) - 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. - (correct Answer) - 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 - (correct Answer) - [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 - (correct Answer) - [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 - (correct Answer) - [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 - (correct Answer) - [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.
- (correct Answer) - [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. - (correct Answer) - [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 - (correct Answer) - [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. - (correct Answer) - [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. - (correct Answer) - [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. - (correct Answer) - [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. - (correct Answer) - [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 - (correct Answer) - [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 specialisation 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. - (correct
Answer) - [2] Paper money was developed since specialisation between countries led to increases in
trade, causing the use of coins to be inconvenient as they were difficult to handle.
Which of the following statements are correct?
a. The use of money eliminates the need for a double coincidence of wants associated with a barter
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 necessitate households to make choices - (correct Answer) - 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. - (correct Answer) - 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 - (correct Answer) - [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 - (correct Answer) - [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 - (correct Answer) - [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 - (correct Answer) - [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.
- (correct Answer) - [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. - (correct Answer) - [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 - (correct Answer) - [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. - (correct Answer) - [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. - (correct Answer) - [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. - (correct Answer) - [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. - (correct Answer) - [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 - (correct Answer) - [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 specialisation 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. - (correct
Answer) - [2] Paper money was developed since specialisation between countries led to increases in
trade, causing the use of coins to be inconvenient as they were difficult to handle.
Which of the following statements are correct?
a. The use of money eliminates the need for a double coincidence of wants associated with a barter
