Macroeconomics Answers

Suppose the Fiji Rugby Sevens team is in the grand final of HK Sevens championship. Experts
have assigned a probability of 60% that Fiji will win the championship. Past records indicate
that when teams win the championship, they win the first game of the series 70% of the time.
When they lost championship, they win the first game 25% of the time. The first game is over
against NZ and Fiji has lost.
Present the above information in a tree diagram and calculate the probability of Fiji winning
the championship given that they have lost their first game. (

Read the following passage to answer question 60:
60. Based on the passage, which one of the following statements regarding supply factors and
demand factors that affect economic growth, is true?
[1] Creation of job opportunities for local communities will be positively influenced by demand
factors.
[2] The fact that companies operating in SEZs do not have to pay rent, is a demand factor that
will affect economic growth.
[3] Exports by firm’s operating in SEZs form part of supply factors.
[4] Tax relief, capital investment and training are not supply factors, nor demand factors.

Various countries, including South Africa, China and India, have established Special
Economic Zones (SEZs) within their domestic economies. Firms that operate within these
SEZs receive several incentives including tax relief, rent-free land, capital investment and
training. This is done with the expectation to increase exports and to create job opportunities
for local communities.

Which one of the following is NOT a demand factor that influences economic growth?
[1] an increase in exports
[2] an increase in factors of production
[3] an increase in investment spending
[4] domestic manufacturing of previously imported goods

Which one of the following best describes economic growth?
[1] an increase in real GDP per capita over time, where GDP per capita is real output divided
by population
[2] an increase in the value of final goods and services produced within the borders of the
country in a one-year period
[3] a sustained increase in nominal GDP occurring over time
[4] an absolute change of GDP or GDP per capita over time

Which one of the following statements about the shortcomings of real GDP is correct?
[1] It accounts for the distribution of national income
[2] It accounts for the negative effect resulting from production
[3] It is used to estimate the growth of the underground economy
[4] It does not account for labour of farmers in rural areas who produce for their own use

Suppose South Africa is experiencing cyclical unemployment. What will be the appropriate policy
to tackle South Africa’s unemployment problem?
a) improve the quality of education and training to increase the number of skilled labour
b) increase in government spending on basic infrastructure development in rural areas
c) reducing interest rate and taxes to stimulate aggregate demand in the economy
[1] a
[2] b
[3] c
[4] b c
[5] a b c

Due to coronavirus pandemic, many education institutions adopted an online teaching method.
This meant that all educators must now be able to do teaching online. Mary, a contract educator,
was laid off by her employer because she does not know how to use online teaching tools. Until
she finds a new job, Mary is…
[1] structurally unemployed.
[2] cyclically unemployed.
[3] seasonally unemployed.
[4] frictionally unemployed.

Questions 52 and 53 are based on the following table showing the key labour market indicators in
South Africa:
Number of persons (‘000)
Population 15-64 yrs 38 134
Labour force 22 668
Employed 16 529
Unemployed 6 139
Discouraged work-
seekers
2 841
52. The unemployment rate (using the strict definition) in South Africa is… (rounded to two decimals
after the comma).
[1] 54,33%
[2] 35,20%
[3] 37,14%
[4] 27,08%
53. The unemployment rate (using expanded definition) in South Africa is… (rounded to two
decimals after the comma).
[1] 54,33%
[2] 35,20%
[3] 37,14%
[4] 27,08%

Assume the local currency weakens against the major currencies. This will result in…
a) a decrease in the employment level.
b) an increase in the net export.
c) a fall in the purchasing power of local currency.
d) an increase in the purchasing power of local currency.
[1] a and b
[2] b and c
[3] c
[4] a and d
[5] a, b, c and d

To enter the pool of unemployment, a person must be…
[1] any age and looking for a job.
[2] a discouraged work-seeker.
[3] economically active.
[4] working while searching for better a job.