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ECS1601-25-EX10A

ECS1601-25-EX10A

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Inflation can be caused by a/an ...... Within the AD-AS model, this will be illustrated by a ......

decrease in exports earnings; leftward shift of the AD curve

fall in crude oil price; rightward shift of the AS curve

rise in consumption spending; leftward shift of the AD curve

high wage demands by trade unions; leftward shift of the AS curve

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Within the mixed economy, _____________.

households and firms depend on each other to generate their income

firms generate income from the factor market

households produce factors of production

both households and firms are directly involved in production

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Suppose that Tom, a South African trader, imports goods from the US and sells them in South Africa. Now suppose that the rand appreciates against the dollar. How would this affect Tom’s business?

The prices of goods that Tom’s business imports will decrease in terms of rand.

The demand for US goods by Tom’s business will decrease because imports from US become more expensive when the rand appreciates.

The demand for US goods by Tom’s business will decrease because imports from US become more expensive when the dollar depreciates.

The prices of goods that Tom’s business imports will decrease in terms of dollar.

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According to the Keynesian model, the factors that influence a household’s induced consumption are the marginal propensity to consume and …

its total wealth.

its disposable income.

its net wealth.

the number of persons in the household.

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Which one of the following statements describe a leakage from the circular flow of income and spending in South Africa?

Investment by a Lesotho beer company in a new brewery in South Africa.

The sale of fruit exports to the European Union.

A decision by a major supermarket chain to sell chicken from Brazil.

Defence expenditure by South African government, via contracts with local companies.

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In the circular flow of goods and services______

households are the suppliers of factors of production in the goods market.

production inputs offered for sale on the factor market are traded by households.

firms buy factors of production from households in the good market.

households combine various production inputs to produce outputs or goods and services.

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Which of the following statements regarding the foreign sector is/are correct?

a. Absolute advantage is a prerequisite for international trade.

b. Differences in resource endowments necessitate international trade.

c. Countries can only benefit from trade if the opportunity costs among the trading countries are the same.

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In the circular flow of production, income and spending_______

government is the buyer of factors of production supplied by the households.

purchases by government constitute leakage from the circular flow.

government generate income from both the goods market and factor market.

firms and households purchase public goods and services from the government.

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We can expect that the amount of money that a bank create will decrease when…

the bank borrows from the South African Reserve Bank.

the South African Reserve Bank increases the repo rate.

the bank's clients choose to hold a smaller part of their money in the form of cash.

more bank clients choose to deposit their funds at the bank.

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In the AD-AS model, the aggregate demand curve shows…

the relationship between the quantity demanded and the quantity supplied.

the relationship between the general price level and the level of total expenditure.

the relationship between the quantity demanded and price of a good or service.

the positive relationship between the price level and real GDP.

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