Macroeconomics Answers

Spendingoncapitalgoodsiscalledcapitalformationor_______________, and this primarilyundertakenby_________________ in the economy.(2)
(a) Investment; households;
(b) Capital accumulation; households;
(c) Investment; firms;
(d) Capital accumulation; firms and households.

In the event high levels of inflation,the government can:(2)
(a) Implement a restrictive fiscal policy by raising interest rates;
(b) Implementarestrictivefiscalpolicybydecreasinginterestrates;
(c) Implement a restrictive fiscal policy by raising tax rates and decreasing government
expenditure;
(d) Implement a restrictive fiscal policy by decreasing tax rates and increasing interest
rates.

Which of the following represent injections in to the circular flow of income and spending? (2) (a) Investment and exports; (b) Government spending and taxation; (c) Government spending and imports; (d) Investment and imports.

If Total Output(production)remains the same andallprice double,the real Gross Domestic Product (GDP): (2)
(a) Is constant and nominal GDP doubles;
(b) And nominal GDP are both constant;
(c) IsconstantandnominalGDPisreducedbyhalf;
(d) Doubles and nominal GDP is constant.

An Appreciation Of The Rand Against The Dollar:(2)
(a) Will worsen the current account balance but domestic prices will fall ;
(b) Will improve the current account balance but domestic prices will rise;
(c) Will improve the current account balance but domestic prices will fall;
(d) Will worsen the current account balance but domestic prices will rise.

The__________ isaquantitativemeasureofthedegreeofinequalityinthedistributionof income. (2)
(a) Lorenz curve;
(b) Consumer price index;
(c) Gini coefficient;
(d) Business cycle.

From Firm's Perspective,the lower the interest rate:(2)
(a) The higher the expected return on investment;
(b) The higher the expected profits;
(c) The lower the expected profits;
(d) The lower the expected return on investment.

In the Keynesian macroeconomic model, the equation for the savings function is given as: S = -420 + 1/4Y. Based on this information, which of the following statements is
correct? (2)
(a) The marginal propensity to consume is 1⁄4;
(b) The level of autonomous savings is 420;
(c) At an income level of R1 000, the value of savings is 250.
(d) At an income level of R1 000, the level of savings is -170.