1. An increase in the budget deficit is the result of:
(a) Expansionary
(b) Contractionary monetary policy;
(c) Expansionary fiscal policy;
(d) Contractionary fiscal policy.
2. Company tax is a: (a) Progressive, direct tax;
(b) Progressive, indirect tax;
(c) Proportional direct tax;
(d) Regressive indirect tax.
3. In the base year, a country produced 50 units of output at a price of R6,00 each for a nominal
(a) 5%;
(b) 10%;
(c) 20%;
(d) 15%.
4. Which of the following statements about Fiscal Policy is INCORRECT?
(a) In order to combat inflation, the South African Reserve Bank must apply a contractionary fiscal policy;
(b) A contractionary fiscal policy can result in higher levels of
(c) Expansionary fiscal policy will increase the budget deficit;
(d) The application of fiscal policy will have no effect on
5. If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan’s:
(a) Real and nominal income both remain unchanged;
(b) Real and nominal income both rise;
(c) Real income rises but nominal income remains unchanged;
(d) Nominal income rises but real income remains unchanged.
6. Given the import function, Z = 300 + 2/3Y, which of the following statements is correct?
(a) The marginal propensity to save is 1/3;
(b) The induced component is 300;
(c) 2/3 is the proportion of any income spent on imports;
(d) None of the statements is correct.
7. An increase of R5 billion in income in a macroeconomy leads to an increase in R3 billion in consumption spending. From this information, we can determine that the marginal propensity to save in this economy is:
(a) 0.6;
(b) 0.5;
(c) 0.3;
(d) 0.4.
8. Mr Brown has recently been retrenched. The firm he worked for had to retrench a number of staff due to the downturn in the economy. Mr Brown has not managed to find alternative employment. We can say he is _________________ unemployed.
(a) Structurally;
(b) Cyclically;
(c) Seasonally;
(d) Frictionally.
9. If the
(a) 106%;
(b) 116%;
(c) 9.4%;
(d) 16%
10. Strikes across a wide range of industries in South Africa in the first half of 2020 can be illustrated in the AD‐AS model as a:
(a) Leftward shift of the AD curve;
(b) Rightward shift of the AD curve;
(c) Leftward shift of the
(d) Rightward shift of the AS curve.
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