1. SA Macro-economic Environment

Question 1

A contractionary fiscal policy entails a decrease in the demand for goods in the economy by (1)…. A result of such a policy is that the budget deficit (2)….

Answer 1

(1) decreasing government spending and/or increasing taxes

(2) increases

Question 2

An expansionary fiscal policy entails an increase in the demand for goods in the economy by (1)…. A result of such a policy is that the budget deficit (2)….

Answer 2

(1) increasing government spending and/or decreasing taxes

(2) decreases

Question 3

An … is someone who is willing and able to work but who does not have a job.

Answer 3

unemployed person

Question 4

Contractionary monetary policy entails an (1)…. This therefore increases (2)…

Answer 4

(1) increase in the repo rate

(2) interest rates and cost of credit

Question 5

Economic growth takes place when the (1)… of goods and services in an economy (2)…

Answer 5

(1) total output (production)

(2) increases

Question 6

Expansionary monetary policy entails a (1)… This therefore decreases (2)…

Answer 6

(1) decrease in the repo rate

(2) market interest and cost of credit

Question 7

Expenditure on GDP includes (1)… and excludes (2)…, it is all spending on what we as a country produce.

Answer 7

(1) exports

(2) imports

Question 8

GDP is a … because it includes the total amount of goods and services produced, some of which are simply replacing goods that have depreciated or worn out.

Answer 8

gross measurement

Question 9

GDP measures the goods and services produced inside the borders of a country by …

Answer 9

both the citizens and foreigners

Question 10

Gross Domestic Expenditure total value of spending within the borders of a country, including imports but …, since spending on exports takes place outside the borders of the country.

Answer 10

excluding exports

Question 11

In addition, children between the ages of … are protected from work that is “exploitative, hazardous, inappropriate for their age, detrimental to their schooling, or detrimental to their social, physical, mental, spiritual, or moral development”.

Answer 11

15 and 18

Question 12

Inflation is defined as …

Answer 12

the sustained rise in the general level of prices

Question 13

Intermediary goods is goods used in the production of products meant for …

Answer 13

end users

Question 14

It is a criminal offence to employ a child under the age of … in South Africa

Answer 14

15 years

Question 15

Marginal propensity to consume = the portion of household income that is spent on …

Answer 15

goods and services

Question 16

Monetary policy involves all deliberate actions by the monetary authorities to influence the …

Answer 16

monetary aggregates, the availability of credit, interest rates and exchange rates

Question 17

Nominal GDP is the sum of the quantities of final goods and services produced, multiplied by their …

Answer 17

current price

Question 18

Only … are included in GDP.

Answer 18

final goods and services

Question 19

Real GDP is the sum of the quantities of final goods and services produced, multiplied by the …

Answer 19

base price

Question 20

Structural unemployment occurs when there is a mismatch between workers’ …

Answer 20

qualifications and job requirements

Question 21

The demand for goods which consist of (1)… , (2)… , and (3)… are important factors in creating employment opportunities in South Africa.

Answer 21

(1) consumer spending
(2) investment spending
(3) government spending

Question 22

The fiscal policy is a government’s policy that looks at the nature and composition of (1)… to achieve specific (2)…

Answer 22

(1) government spending, taxation and borrowing

(2) economic goals

Question 23

The GDP is the total value of (1)… produced within the (2)… during a (3)…

Answer 23

(1) all final goods and services
(2) boundaries of a country
(3) particular period (usually one year)

Question 24

The type of unemployment in SA is …

Answer 24

structural unemployment

Question 25

The …. policy plays an important role in influencing the demand for goods.

Answer 25

fiscal

Question 26

To qualify as economic growth the growth needs to be in (1)… , therefore (2)… and figures needs to be adjusted for (3)…

Answer 26

(1) real terms
(2) inflation needs to be excluded
(3) population growth

Question 27

What is the strict definition of unemployment?

Answer 27

Those being 15 years and older:

1. not in paid employment
2. were available for paid employment 7 days preceding interview
3. took steps during 4 weeks preceding interview to find employment

Question 28

You have two stabilization policies namely?

Answer 28

1. Fiscal policy

2. Monetary policy

Question 29

You have two types of fiscal policy namely?

Answer 29

1. Expansionary fiscal policy

2. Contractionary fiscal policy

Question 30

… are responsible for consumer spending and a change in their spending behaviour, even a small one, will result in a change in the demand for goods, output and income

Answer 30

Households

Question 31

… is when the total real production or income grows faster than the population.

Answer 31

Positive economic growth