Economics Answers

With the aid of a diagram, discuss the welfare effect of this new legislation if the new minimum wage is (1) below the equilibrium wage and (2) above the equilibrium wage rate with labour hours as your quantity variable

Government spending = R550 Exports = R330 Autonomous consumption = R280 Autonomous imports = R170 Investment expenditure = R120 Marginal propensity to consume = 0,75 Full employment level of income = R5700
What is the value of the multiplier?

[1] 2 [2] 2.50 [3] 4 [4] 3

1. The Utility Function is given for a consumer as U = 3C2/3Cf1/3. The current income = 1000 and future income is 1500. Current r = 10%, find the savings – now assume r = 15% find new savings – find interest rate elasticity of savings.

On 30 September 2019, office desk purchased on 30 April 2017 at a cost price of R5 200 was sold for R4 800 cash. A replacement equipment was purchased at a cost of R43 000 on 1 November 2019. The total depreciation (correctly calculated) for the year on office equipment amounted to R15 200. 2. Land and buildings were acquired on 1 April 2019. 3. On 28 February 2019, the business purchased a new tipper truck at a cost of R101 000. 4. It is the accounting policy of Tera Trader to provide depreciation as follows: Vehicles: According to the straight-line method, at 20% per annum, Office equipment: According to the diminishing-balance method, at 18% per annum, Buildings: According to the straight-line method, at 2% per annum. QUESTION 1 Which one of the following alternatives represents the correct amount that must be discloses as property, plant and equipment in the statement of financial position of Mageza Transport as at 31 December 2019?
1. R2 576 000
2. R2 413 722
3. R2 344 000
4. R2 370 200

Supposed the government decides to pursue the expansionary fiscal policy. Within the AD-AS framework, what will be the impact on the economy? 1. Aggregate supply in the economy will decrease at various price levels. 2. Aggregate demand in the economy will decrease at various price levels. 3. Total production and employment will increase, while inflation decrease. 4. Real GDP, the general level of prices and employment will increase.

Aggregate Spending will increase if...
1.real wealth falls, 2. Interest rate falls, 3. Consumption falls, 4. Investment falls

The citizens of Exland, whose currency is the bun, conduct the transactions
outlined in the table.
Item Billions of buns
Imports of goods and services 600
Exports of goods and services 700
Foreign investment in Exland 350
Exland's investment abroad 430
Increase in the official holdings of foreign currency 20
(a) What is Exland's current account balance?
(b) What is Exland's capital account balance?
(c) What is Exland's official settlement balance?
(d) What is Exland's net foreign borrowing?

Can’t a subsidy also serve to reduce inefficiency resulting in less deadweight loss?

1. The following equations describe an economy. (Think of C , I , G , etc., as being measured in
billions and i as a percentage; a 5 percent interest rate implies i = 5.)
C  0.8(1  t ) Y (P1)
t  0.25 (P2)
I  900  50 i (P3)
−−
G  800 (P4)
L  0.25 Y  62.5 i (P5)
−−
M  −
P  500 (P6)
a. What is the equation that describes the IS curve?
b. What is the general definition of the IS curve?
c. What is the equation that describes the LM curve?
d. What is the general definition of the LM curve?
e. What are the equilibrium levels of income and the interest rate?

With aid of a well labelled production possibility curve explain each of the following concepts: Efficiency
Opportunity Cost
Scarcity Choice