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ECS1601-25-Y_ASS3

ECS1601-25-Y_ASS3

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Which one of the following will not be appropriate in an attempt to combat demand-pull inflation?

An increase in interest rates

A decrease in government spending

An increase in taxes

Measures to decrease the productivity of labour

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In the AD-AS model, an expansionary fiscal policy may lead to a…

leftward shift of aggregate supply and cost-push inflation.

rightward shift of aggregate demand and demand-pull inflation.

leftward shift of aggregate demand and demand-pull inflation.

rightward shift of aggregate supply and cost-push inflation.

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In response to the COVID-19 pandemic, countries injected trillions of dollars into their economies to provide relief to households and firms. This response is an example of ... policy, which can result in ... inflation, ceteris paribus.

expansionary; demand-pull

contractionary; cost-push

contractionary; demand-pull

expansionary; cost-push

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Which of the following is correct regarding the AD-AS model?

None of the above

The AD curve is upward sloping, showing that there is a positive relationship between price and output and income.

There will be a greater demand for foreign currency and lower demand for the rand when the interest rate increases.

When the price level rises, the central bank may decide to raise the interest rate and this will shift the AS curve to the right.

The AD-As model cannot be used to study the general price level.

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Which of the following events should occur for the AD curve to shift to the right?

The future interest rate is expected to fall.

The increase in general prices due to increases in the price of petrol.

The minister of finance reduces the tax rate.

The future price level is expected to fall.

100%

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The question is based on the following diagrams, which show the aggregate demand and supply curves.

Which of the following best demonstrate a movement that would result from the social relief grants offered to households that were negatively affected by the COVID-19 induced lockdown?

a to c on figure 4

b to c on figure 2

b to c on figure 3

b to c on figure 1

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A decrease in investment spending will cause a/an ....

increase in aggregate demand

decrease in aggregate supply

decrease in aggregate demand

increase in aggregate supply

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Demand management policy measures...