Question

QUESTION 2 (20 Marks) Match the economic concepts given in COLUMN A with its description in COLUMN B. Write down the question number and the correct letter next to it. E.g. 2.11 A COLUMNA 2.1 Firms 2.2 Goods market 2.3 Households 2.4 Factor markets 2.5 Government 2.6 Capital transfer account COLUMNB The difference between receipts and payments on goods and services Passes on factors of production from one market to another This is determined in free markets by the law of supply and demand. The cumulative balance and the long-term capital movements. International transactions involving financial assets are recorded here Financial flows that are not matched by any form of economic return. Spends on factors of production. Receives income through taxes and spends on public goods and services Earns income through wages Errors and omissions in compiling the balance of payments account Receives consumer spending on goods and services The international market in which one currency can be exchanged for other currencies. illustrated by an upward or leftward shift of the AS curve. 2.7 2.8 Cost-push inflation The financial account 2.9 2.10 Unrecorded transactions Floating exchange rate

Answer 1

2.1) Firms g. 2.2) Goods market k 2.3) Housefrolds - i Factor markets b 2,5) Government in 2.6) Capital transfer account d 2.7) Cost-Sush inflation m 2.8) the financial account e (2.9) Unrecorded transactions 210) Floating exchange rate j e