Answer to Question #131516 in Macroeconomics for Zinzan

Question #131516

Q.1.3 Which of the following represents stock variables? (2)
(a) Wealth, saving and unemployment;
(b) Gold reserves held by the South African Reserve Bank, and investment;
(c) Income, profit and investment;
(d) Wealth, assets and liabilities.
Q.1.4 Which of the following statements is INCORRECT? (2)
(a) M1 consists of coins, notes and demand deposits only;
(b) M3 includes short term deposits;
(c) M3 includes long term deposits;
(d) M3 = M1 + M2 + long term deposits.

Q.1.5
Which one of the following statements regarding fiscal policy and the budget is (2) correct?
(a) When the government plans to stimulate economic activity, it can increase
spending or reduce taxes;
(b) Revenue from tax is always greater than government spending in South
Africa;
(c) Demand management only refers to fiscal policy;
(d) A contractionary fiscal policy should be implemented to combat
unemployment.

Expert's answer

Q 1.3

(d) Wealth, assets and liabilities

Q 1.4

(b) M3 includes short term deposits

Q. 1.5

(a) When the government plans to stimulate economic activity, it can increase

spending or reduce taxes;