Question

ЕСТION A [40 MARKS Answer ALL questions in this section. QUESTION (20 Marks) Choose the most appropriate answer. Write down numbers 1.1 to 1.10 in your answer book and next to each number write the letter that represents the correct answer. E.g. 1.11 a 1.1 Which one of the following statements is false? The determinants of a country's economic growth are an example ofa macroeconomic issue. b) The total production of sugar in South Africa is a macroeconomic issue. c) The determination of the price of maize is a microeconomic issue. Inflation is a macroeconomic issue. d) a) 1.2 Which of the following best describes the M1 measure of the money stock? a) It is the M3 money measure minus the M2 money measure. b) M1 includes cash and medium term deposits. c) M1 is cash plus demand deposits d) M1 is cash minus demand depo0sits 13 A tax such as VAT would generally be viewed as: a) Progressive, because the consumption expenditure of the rich is greater than that of the poor. b) Regressive, because low-income households spend a greater proportion of their income on goods that atract VAT Proportional, because the VAT rate is constant across goods that attract VAT c) Progressive, because most goods consumed by poor househokds are zero rated. d) 1.4 Which one of the following is not a criterion for a good tax? a) Administrative simplicity b) Neutrality c) Equity d) Distortability 1.5 Which one of the following statements is correct? a) In a monetary economy there always has to be a double coincidence of wants. b) Money can never lose its usefulness as a unit of account c) The stock of money consists largely of notes and coins d) Money is not the only possible store of value.

Answer 1

1.1)

Answer: (B)

Study of total production of sugar comes under the category of Micro economics.

Hence. this is correct statement.

1.2)

Answer: ( C)

It includes only Cash and demand deposits.

this is the most liquid form of money.

1.3)

Answer: (B)

it is considered as regressive. since poor people spend their larger portion of income on these items.

1.4)

Answer: (D)

distorability is not criteria for imposing taxes.

1.5)

Answer: ( C)

Money stock consists of notes and coins.

1.6)

Answer: (B)

GDP at current price is greater than GDP measured at constant price because inflation is positive

1.7)

Answer: ( D)

The growth rate is not measured on a per capita basis. welfare can be measured on a per capita basis.

1.8)

Answer: ( D)

Zola is frictionally unemployed. she has voluntarily left her and job and looking for new ones.

1.9)

Answer: ( A)

Here Euro has depreciated against the dollar. one less dollar will be exchanged for one Euro.

1.10)

Answer: (D)

Depreciation makes import costly, hence shortage of goods might rise at home.