Macroeconomics Answers

If a household’s income falls from R12 000 to R10 000, and its consumption falls
from R9 500 to R8 000, then:
(2)
(1) The marginal propensity to consume is ‐0.8.
(2) The marginal propensity to consume is 0.75.
(3) The marginal propensity to consume is 0.2.
(4) The marginal propensity to save is 0.15.

In the national income accounts: (2)
(1) Total spending is always equal to total production and income.
(2) Total spending is always greater than total production and income.
(3) Total spending is always less than total production and income.
(4) Total spending may be greater than, equal to or less than total production
and income.

If the marginal propensity to consume increases: (2)
(1) The slope of the consumption function will be steeper.
(2) There will be a movement from left to right along the consumption function.
(3) The consumption function will shift parallel upwards.
(4) The consumption function will shift parallel downwards.

Out of 20 million people in the population, 9 million people are in the labour force
and 3 million are unemployed, therefore the unemployment rate is:
(2)
(1) 3 percent.
(2) 15 percent.
(3) 30 percent.
(4) 33,3 percent.

Which of the following will NOT cause a depreciation of the rand against the
dollar?
(2)
(1) A decrease in imports from the United States.
(2) A decrease in exports to the United States.
(3) A decrease in the number of tourists visiting South Africa from the United
States.
(4) An increase in the number of American investors selling their shares in South
African companies and converting the proceeds to dollars.

An appreciation of the rand against the dollar: (2)
(1) Will worsen the current account balance but improve domestic prices.
(2) Improve the current account balance but worsen domestic prices.
(3) Improve the current account balance as well as reduce domestic prices.
(4) Worsen both the balance on the current account as well as domestic prices.

The table below shows total output for an economy over 3 years.
Year
Money​ GDP*
Deflator
Real​ GDP**
2013
​$ ________
105
​$760 000
2014
​$820 000
106
​$________
2015
​$855 000
​________
​$800 000
​* millions of dollars
​** real GDP measured in millions of 2007 dollars
TABLE 207
Refer to Table 207. The implicit GDP deflator for 2015 is approximately

Identify any three non‐income determinants of consumption.

A decrease in the marginal propensity to imports results in?

1. A decrease in the multiplier
2. Less domestic consumption
3. A decrease in aggregate spending
4. Less foreign exchange flowing out of the country