Other Economics Answers

What are the basic questions that we seek to answer in this chapter? In what way is the model presented in this chapter an abstraction or a simplification of the real world? Can the model be generalized? 

Chose the best answer to each question?

23. If Total Poverty Gap is $5,000, the number of persons whose income fall below the poverty line is 200, and the size of population is 1,000, then what is the Average Poverty Gap? 

 (a) $5       (b) $250      (c) $1 million     (d) $10 

24. Which of the following is included into the computation of both Gender Development Index(GDI) and Gender Inequality Index(GII)? 

(a) women’s educational attainment   (b) women’s life expectancy at birth

 (c) women’s participation in the workforce (d) women’s income per person  

25. Which of the following can have a value bigger than 1? 

(a) Gender Inequality Index         (b) MPI

(c) Gini coefficient             (d) Normalized Poverty Gap

(e) Gender Development Index

•         define fiscal policy

•         mention the instruments of fiscal policy

•         explain the difference between M1, M2 and M3

•         differentiate between money, income and wealth

•         explain why credit cards are not seen as money

•         explain the basic function of a financial intermediary

•         explain a demand determined money supply

•         define the demand for money

•         mention the motives for holding money and the main determinant of each

•         define monetary policy

•         list the market-oriented monetary policy instruments

•         list the non-market-oriented monetary policy instruments

•         define the repo rate

•         list the functions of money

•         define money

•         list the properties of money

•         list the functions of the SARB

Name the three possible leakages out of the circular flow of income and spending in an economy.

Define the following concepts: 5.1. Flow variable 5.2. Stock variable 5.3. Household 5.4. Firm 5.5. Transfer payments 5.6. Balance of payments

An increase of exports from South Africa to other countries will … . [1] increase the income of South African producers and increase aggregate spending on South African goods [2] increase the income of South African producers and decrease aggregate spending on South African goods [3] decrease the income of South African producers and decrease the aggregate spending on South African goods [4] decrease the income of South African producers and increase the aggregate spending on South African goods

The act of purchasing capital goods is called … . [1] consuming [2] making a profit [3] capital formation [4] producing