2025 – ECS1601 – ASSESSMENT 2 – Q&A
Assessment 2
Started on Tuesday, 1 July 2025,
State Finished
Completed on Tuesday, 1 July 2025,
Time taken
Marks 19.00/20.00
Grade 95.00 out of 100.00
Question 1
Which of the following is NOT part of South Africa's GDP?
Select one:
a.
The cost to wash your BMW in South Africa
b.
The value of a BMW Imported from Germany
c.
The value of an Insurance policy on a new BMW sold by a South African company
d.
The value of a BMW produced in South Africa
e.
The commissions earned by a BMW dealership in South Africa
Question 2
If nominal GDP rises ...
Select one:
a.
we can be certain that the price level has risen.
b.
real GDP may either rise, fall or stay the same.
c.
real GDP must fall.
1
,2025 – ECS1601 – ASSESSMENT 2 – Q&A
d.
real GDP must also rise.
Question 3
Gross domestic product (GDP) may be defined as ...
Select one:
a.
the market value of all final goods and services produced in a country in a specific
year.
b.
the economic value of all economic resources used in the production of a year's
output.
c.
the monetary value of all goods and services (final, intermediate and non-market)
produced in a given year.
d.
total resource income less taxes, savings and spending on exports.
Question 4
In the simple Keynesian model, which of the following is NOT correct?
a.
I stand for total investment spending
b.
Y stand for income
c.
Induced consumption is a fraction of income
d.
Marginal propensity to consume together with the marginal propensity to save equals
one
e.
Equilibrium is where consumption equals income
Feedback
2
, 2025 – ECS1601 – ASSESSMENT 2 – Q&A
The equilibrium level is where income is income (Y) is equal to the level of aggregate
spending (A).
Question 5
Which of the following statements is correct?
a.
Consumption spending is a variable larger than 1 in the simple Keynesian model.
b.
Investment spending is larger and more constant than consumption spending.
c.
Investment spending is smaller but consumption is more predictable than investment
spending.
d.
The investment decision involves only the cost of motor vehicles.
e.
There is a direct relationship between the expected return on investment spending
and wages.
Feedback
Consumption spending is the largest component of total spending; investment is
more variable and less predictable than consumption spending. The investment
spending refers to the production and purchase of capital goods such as machinery,
buildings and equipment and not just motor vehicles. There is an inverse relationship
between the interest rate and the expected return on investment spending.
Question 6
Which of the following is an assumption of the simple Keynesian model?
a.
The model consists of government and the foreign sector.
b.
Prices and wages are determined in the Keynesian model.
c.
Spending is the driving force that determines the level of economic activity.
3
Assessment 2
Started on Tuesday, 1 July 2025,
State Finished
Completed on Tuesday, 1 July 2025,
Time taken
Marks 19.00/20.00
Grade 95.00 out of 100.00
Question 1
Which of the following is NOT part of South Africa's GDP?
Select one:
a.
The cost to wash your BMW in South Africa
b.
The value of a BMW Imported from Germany
c.
The value of an Insurance policy on a new BMW sold by a South African company
d.
The value of a BMW produced in South Africa
e.
The commissions earned by a BMW dealership in South Africa
Question 2
If nominal GDP rises ...
Select one:
a.
we can be certain that the price level has risen.
b.
real GDP may either rise, fall or stay the same.
c.
real GDP must fall.
1
,2025 – ECS1601 – ASSESSMENT 2 – Q&A
d.
real GDP must also rise.
Question 3
Gross domestic product (GDP) may be defined as ...
Select one:
a.
the market value of all final goods and services produced in a country in a specific
year.
b.
the economic value of all economic resources used in the production of a year's
output.
c.
the monetary value of all goods and services (final, intermediate and non-market)
produced in a given year.
d.
total resource income less taxes, savings and spending on exports.
Question 4
In the simple Keynesian model, which of the following is NOT correct?
a.
I stand for total investment spending
b.
Y stand for income
c.
Induced consumption is a fraction of income
d.
Marginal propensity to consume together with the marginal propensity to save equals
one
e.
Equilibrium is where consumption equals income
Feedback
2
, 2025 – ECS1601 – ASSESSMENT 2 – Q&A
The equilibrium level is where income is income (Y) is equal to the level of aggregate
spending (A).
Question 5
Which of the following statements is correct?
a.
Consumption spending is a variable larger than 1 in the simple Keynesian model.
b.
Investment spending is larger and more constant than consumption spending.
c.
Investment spending is smaller but consumption is more predictable than investment
spending.
d.
The investment decision involves only the cost of motor vehicles.
e.
There is a direct relationship between the expected return on investment spending
and wages.
Feedback
Consumption spending is the largest component of total spending; investment is
more variable and less predictable than consumption spending. The investment
spending refers to the production and purchase of capital goods such as machinery,
buildings and equipment and not just motor vehicles. There is an inverse relationship
between the interest rate and the expected return on investment spending.
Question 6
Which of the following is an assumption of the simple Keynesian model?
a.
The model consists of government and the foreign sector.
b.
Prices and wages are determined in the Keynesian model.
c.
Spending is the driving force that determines the level of economic activity.
3
