Macroeconomics Answers

Discuss the economic effects of covid 19 on employment, output and inflation in south africa

Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system. All figures are in billions of rands. The reserve ratio is 9%.

Table 2: Simplified Consolidated Banking System Balance Sheet

Assets 

Reserves    R70.5      

Securities R219.5

Loans R160

Liabilities

Deposits R450            

Based on the information above: The Money multiplier is_______. The value of excess reserves in the commercial banking system is ___ billion. If these excess reserves were loaned out, ceteris paribus, the total value of additional loans created would be___ billion. 

0.09; R30,5; R160

11,11; R30; R1778

11,11; R30; R 333

40.5; R30; R5,6

MR Bank has the following balance sheet:

Table 3: MR Bank balance sheet

Assets

Required Reserves X            

Excess Reserves R50 million

Liabilities

Deposits            Y            

The required reserve ratio is 10%. What is the value of MR bank’s deposits?

R 45 million.

R 10 million.

R 55.6 million.

R 50 million.

The demand curve for money will shift to the left if:

• I. Real GDP increases.
• II. Real GDP decreases.
• III. The interest rate increases.
• IV. The interest rate decreases.

(II) and (III) are correct.

(I) and (IV) are correct.

(II) and (IV) are correct.

Only (II) is correct.

Which of the following is correct in respect of “money as a medium of exchange”:

1. Money facilitates the exchange of goods. 
2. Money reduces or eliminates the need for barter. 
3.  Money is an object that sellers will accept as payment.

only iii is correct

only i is correct.

i, ii and iii are correct.

only i and ii are correct.

Suppose that the public hold no currency.

Total reserves = R10 billion, demand deposits = R50 billion, and the required reserve ratio is 10 percent.

How large are the commercial bank’s excess reserves?

R 55 billion.

R 5 billion.

R 1 billion.

R 40 billion.

MR Bank has the following balance sheet:

Table 3: MR Bank balance sheet

Assets Liabilities

Required 

Reserves X Deposits Y 

Excess 

Reserves R50 million

The required reserve ratio is 10%. What is the value of MR bank’s deposits?

A. R 50 million.

B. R 55.6 million.

C. R 10 million.

D. R 45 million.

The demand curve for money will shift to the left if: 

I. Real GDP increases. 

II. Real GDP decreases. 

III. The interest rate increases. 

IV. The interest rate decreases.

A. Only (II) is correct.

B. (II) and (III) are correct.

C. (I) and (IV) are correct.

D. (II) and (IV) are correct.

Which of the following is correct in respect of “money as a medium of exchange”?

(i) Money facilitates the exchange of goods.

(ii) Money reduces or eliminates the need for barter.

(iii) Money is an object that sellers will accept as payment.

A. only (i) is correct.

B. only (iii) is correct.

C. (i), (ii) and (iii) are correct.

D. only (i) and (ii) are correct.

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