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The following transactions of JDE Corp took place during the financial period ending 31 March 2022: 1. The owner of the business, Mr J Dough, took inventory for his personal use, R1 000. 2. The business received dividends in cash from their investments, R6 800. 3. JDE Corp returned inventory that was damaged to the supplier, R700. 4. The business paid cash for electricity for the month of March, R500. 5. Sold goods on credit to several customers, R15 800. 6. Bought goods on credit worth R25 000. 7. A R3 500 loan was received from the bank, payable after five years, at 7% interest per annum. 8. Company applied for an overdraft of R10 500 and it was approved at the end of March 2022.
There is an old adage that says "There is no such thing as a free lunch". This adage relates most closely with which of the following basic economic concepts?
define the term production possibility frontier
Q5. A work shop contains four persons available for work on the four
jobs. Only one person can work on any one job. The following table
shows the cost of assigning each person to each job. The objective is to
assign person to jobs such that the total assignment cost is a minimum.
Jobs
1 2 3 4
A 20 25 22 28
Persons B 15 18 23 17
C 19 17 21 24
D 25 23 24 24
Defi ne carefully the difference between movements along the AD curve and shifts of the AD curve. Explain why an increase in potential output would shift out the AS curve and lead to a movement along the AD curve. Explain why a tax cut would shift the AD curve outward (increase aggregate demand).
To counteract the fact that an economy is performing above its potential, then to cool down the economy the central bank could:
a. buy government securities/bonds on the open market and reduce the reserve requirement
b. sell government securities/bonds on the open market and increase the reserve requirement
c. buy government securities/bonds on the open market and raise the discount rate
d. sell government securities on the open market and lower the discount rate
Which of the following would not be included in aggregate demand/GDP spending?
a. an increase in firms’ inventories.
b. purchases of goods by households.
c. depositing money at a bank.
d. firm's’ purchases of newly produced machinery
Total spending in the economy is most likely to increase by the largest amount if which of the following occur to government spending and taxes, all things equal?
Government Spending Taxes
a. Decrease Increase
b. Decrease No change
c. Increase Increase
d Increase Decrease
For a bank,
a. loans granted are liabilities and deposits by individuals are assets
c. both loans granted and deposits by individuals are assets
c. both loans granted and deposits by individuals are liabilities
d. loans granted are assets and deposits by individuals are liabilities
An expansionary monetary policy aimed at increasing economic activity will
a. decrease the money supply and increase the interest rate
b. increase the money supply and decrease aggregate demand
c. increase the money supply and decrease the interest rate
d. increase both the money supply and the interest rate
In a period of high unemployment and in order to stimulate the economy a central bank would probably:
a raise the discount rate
b raise the required reserve ratio
c buy bonds through open market operations
d increase government spending and cut taxes
If the central bank decreases reserve requirements to stimulate the economy, which of the following is most likely to happen to interest rates and gross domestic product all things equal?
Interest Rates GDP
a. Increase Decrease
b. Increase Increase
c. Decrease Decrease
d. Decrease Increase
If the required reserve ratio is 5% and the central bank buys $200 worth of securities, the maximum increase in the money supply will be
a. $ 2,000 b. $ 4,000 c. $ 600 c. $ 1,000
