Macroeconomics Answers

In what account in of a country's balance of payments will the export of diamonds be recorded?

1. The current account
2. The financial account
3. Unrecorded transaction
4. A change in gold and foreign reserves

B. The rand price of the US dollars (USD) increase to R12,02 in March 2015 from R11,53 in February 2015. This means that the South African rand.........against the dollar and the dollar.............against the rand.

1. Appreciated, appreciated
2. Appreciated, depreciated
3. Depreciated, appreciated
4. Depreciated, depreciated

If the inflation rate were above the target, it would be appropriate for the South African Reserve Bank to..........

1. Buy government bonds
2. Lower the interest rates level
3. Increase the quantity of money
4. Increase the interest rate level

B. If the South African Reserve Bank wants to decrease the money supply growth to curb inflation, it may.......

1. Increase income tax rates
2. Increase the repo rate
3. Buy treasury bills in the open market
4. Buy government bonds

An open-market policy by the South African Reserve Bank may involves.......

(A) selling of government stock to increase the liquidity deficit of the banks
(B) buying of government stock to increase the liquidity deficit of the banks
(C) selling of government stock to contribute to lower interest rates
(D) buying of government stock to contribute to lower interest rates

1. Only A and C are correct
2. Only A and D are correct
3. Only B and C are correct
4. Only B and D are correct

The repo rate is.........

1. The rate at which the South African Reserve Bank advances loans to government
2. The rate at which banks provide loans to their best clients
3. The rate at which the South African Reserve Bank provide loans to other banks
4. The rate at which the quantity of money demanded is equal to the quantity of money

B. Which of the following variables will not influence the quantity of money that an individual demand?

1. The interest rate level
2. The income level
3. The price level
4. Money supply

Which one of the following statement about the demand for money is incorrect?

1. As the income level increases, the amount of money that individuals hold, decreases
2. The quantity of money that people hold is negatively related to the interest rate level
3. The income level and the interest rate level affect the quantity of money
4. An increase in the interest rate leads to a decrease in the quantity of money created

B. Which one of the following is the essential function of money

1. Medium of exchange
2. Store of value
3. Factor of production
4. Unit of account

Which one of the following statement is incorrect regarding financial institutions in the circular flow of income and spending

1. Financial capital flows into the financial institutions from households and firms
2. Financial institutions include Banks and insurance companies
3. The money, which households and firms provide to financial institutions, is called savings.
4. The role of financial institutions in the economy is to buy factors of production from households

In the circular flow of income and spending, that is, the basic flow of income and spending between households and firms supplemented by the foreign, financial and government sectors...

1. Exports are leakage from the circular flow
2. Savings are injections into the circular flow
3. Imports are injections into the circular flow
4. Taxes are leakages from the circular flow

B. If the South African reserve Bank decides to decrease the repo rate, the quantity of money created will............ (Ceteris paribus).

1. Decrease
2. Remain the same
3. Increase
4. Cannot be determined

In the simple circular flow of economic activity, goods and services flow via.....

1. Factor markets from households to firms
2. Goods markets from households to firms
3. Factor markets from firms to households
4. Goods markets from firms to households

B. Use the following two statement to answer the question.

A. The factors of production are capital, rent ,money and labour
B. Net exports are equal to exports plus imports

1. Only B is correct
2. A is incorrect and B is correct
3. Both A and B are correct
4. Both A and B are incorrect

Suppose 100 million people are in the civilian labor force and 90 7. million people are employed. How many people are unemployed? What is the unemployment rate?

Suppose 60 million people are employed, 10 million unemployed, and 30 million not in the labor force. What does the civilian non- institutional population equal?