Macroeconomics Answers

How would each of the policies listed in parts (a) through (b) change the Tanzi–Olivera effect?

Requiring monthly instead of yearly income tax payments by households.

Assessing greater penalties for under-withholding of taxes from monthly paychecks.

Decreasing the income tax and increasing the sales tax.

First, explain what seigniorage is. Second, write out and explain the expression that represents seigniorage. And finally, what policies can a central bank implement to increase seignorage

Discuss the various stages of economic development                                                            (5 marks)

1. Analyze how an unfavorable movement in the terms of trade is likely to affect a country,

a.     Balance of payments on current account    (4 marks)

b. Living standards.                                    (4 marks)

how does the government use concepts of elasticity while deciding which goods to tax and how those decisions impact the government revenue

Discuss South Africa as: 

 i. An upper middle income economy. ii. A commodity-based economy. iii. Small 

open economy. iv. Dualistic economy. vs. safe-haven economy. 

a. Clearly explain any 3 characteristics of a developing economy. 

b. Mention any five challenges to the South African economic growth.

c. Which challenge is at the top list of South Africa’s priorities and why?

d. Mention the three main rating agencies. 

a. Mention any 5 concepts used interchangeably with: 

i. Lending rate.

ii. Strict monetary policy

iii. Accommodative monetary policy 

Decide whether the following statements are True or False. 

a. Absolute poverty line, is simply determined from a cut-off point in the welfare 

distribution, like the income or consumption level below which, a certain per 

cent of the population is located. 

b. The second economy consisted of all production and exchange undertaken 

directly for private gain, knowingly illegal in some substantial way.

c. Economies that have both a fiscal deficit and a current account deficit are often 

referred to as having "twin deficits.

d. The Fourth Industrial Revolution represents a fundamental change in the way 

we live, work and relate to one another.

e. The ‘’green economy” is closely related to ecological economics but has a more 

politically applied focus. 

The estimated regression of Y on X1, X2, and X3 using a sample of 30 observations, 

gave the following results:

Yt = 2.4 + 3.9X1 + 0.65X2 – 1.46X3

(1.0)

(1.50 (0.40) (0.61)

Adjusted R2 = 0.67

Figures in parenthesis are standard errors of estimates.

a) Asses the statistical quality of the model.

b) Interpret the estimates and explain which variables are significant and which 

variables are not?