Exam 2014 with memo (1).pdf

8/17/2019 Exam 2014 with memo (1).pdf

1/46

1

INSTRUCTIONS:• This paper consists of 4 questions on 8 pages.• Answer all the questions. • Read each question carefully and please write legibly. • For questions 2 to 4, show all necessary calculations and label all graphs clearly.

QUESTION 1 (20 x 2 = 40 marks)Answer Question 1 in your answer book. Write the letter of your choice next to thequestion number (e.g. 1.1 A or 1.1 B).

1.1 Answer the next question on the basis of the following information about a hypotheticaleconomy:

Full-time employed = 80Part-time employed = 25Unemployed = 15Discouraged workers = 5Members of underground economy = 6Consumer Price Index = 110

UNIVERSITY OF THE FREE STATEUNIVERSITEIT VAN DIE VRYSTAAT

BLOEMFONTEIN CAMPUS/KAMPUS

EECF 62406/EFEC 62406

DEPARTMENT: ECONOMICSDEPARTEMENT: EKONOMIE

CONTACT NUMBER/KONTAKNOMMER: 401 3406

EXAMINATION/EKSAMEN: Main end-of-year 2014PAPER/VRAESTEL 1

ASSESSOR(S)/ 1. Mrs C. Campher/ Mrs L. Janse van Rensburg/ Mr. C. Mudzingiri

MODERATOR: 1. Dr N. Keyser

TIME/TYD: 2 hours MARKS/PUNTE: 100


2/46

2

The official unemployment rate in the above economy is:A. 18.8%B. 12.5%C. 16.7%D. 25%

1.2 Coins held in commercial banks are:A. included in M1, but not in M2. B. included in both M1 and M2. C. included in M2, but not in M1. D. Not part of the nation’s money supply

1.3 Answer the next question on the basis of the following information for a private closedeconomy, where I is Investment, S is saving and Y is gross domestic product (GDP).

I = 80S = -80 + 0.4Y

Refer to the above information. At equilibrium, savings will be:A. R40B. R120C. R60D. R80

Answer questions 1.4 and 1.5 on the basis of the following information for a private openeconomy:C = 40 + 0.8Y

I = 40 X = 20 M = 30

1.4 Refer to the above information. In this economy, international trade:A. will cause GDP to increase.B. will cause GDP to decline.C. has no effect on GDP.D. will cause inflation in this economy.

1.5 The value of autonomous total expenditure is:A. 40B. 70C. 130D. 0.8


3/46

3

1.6 Refer to the above diagram. Other things equal, a shift of the aggregate supply curve fromAS0 to AS 1 might be caused by a(n):

A. increase in government regulation.B. increase in aggregate demand.C. increase in productivity.D. decline in nominal wages.

1.7 Refer to the data in the table below.Disposable income SavingsR 0 R 10

50 0100 10150 20200 30

The marginal propensity to save (MPS) for this economy is:A. 0.8B. 0.75C. 0.2D. 0.25

1.8 Answer the next question on the basis of the following consumption and investment datafor a private closed economy.

C = 60 + 0.6Y I = 30

The equilibrium level of income (Y) is:A. 360B. 225C. 200D. 135


4/46

4

1.9 The total demand for money will shift to the left as a result of:A. a decline in nominal GDP.B. an increase in the price level.C. a change in the interest rate.D. an increase in nominal GDP.

1.10 Assume that a bank initially has no excess reserves. If it receives R5 000 in cash from adepositor and the bank finds that it can safely lend out R4 500, then the reserverequirement must be:

A. 0%B. 10%C. 20%D. 25%

1.11 Suppose nominal GDP in 1999 was R100 billion and in 2001 it was R260 billion. Theconsumer price index in 1999 was 100 and in 2001 it was 180. Between 1999 and 2001 thereal GDP rose by:

A. 160%B. 44%C. 37%D. 12%

1.12 If the exchange rate changes from R1 = 2 euros to R1 = 3 euros:A. the Rand has appreciated in value.B. the Rand has depreciated in value .C. the Rand has neither appreciated nor depreciated, but the euro has appreciated in value.D. S.A. exports to Europe will increase.

1.13 Answer the next question on the basis of the following table:

Interest rate Transaction demandfor money

Speculative andprecautionary demand formoney (Asset demand)

Money Supply

2% R220 R300 R4604% R220 R280 R4606% R220 R260 R4608% R220 R240 R46010% R220 R220 R460

An increase in the money supply of R20 billion will cause the equilibrium interest rate to:A. fall by 4 percentage points.B. fall by 2 percentage points.C. rise by 4 percentage points.D. rise by 2 percentage points.


5/46

5

1.14 If the reserve ratio is 15% and commercial bankers decide to hold additional excessreserves equal to 5% of any newly acquired checkable deposits, then the relevant monetarymultiplier for the banking system will be:

A. 31/2.B. 4.C. 5.D. 10.

1.15 A rightward shift in the aggregate demand curve:A. can increase output, employment and the price levelB. will increase output but not the price levelC. should lead to an increase in potential income of the society . D. is the result of a contractionary fiscal policy .

1.16 In which of the following sets of circumstances can we confidently expect inflation?A. aggregate supply and aggregate demand both increase . B. aggregate supply and aggregate demand both decrease . C. aggregate supply decreases and aggregate demand increases . D. aggregate supply increases and aggregate demand decreases .

1.17 Other things equal, a decrease in the real interest rate will:A. expand investment and shift the AD curve to the left.B. expand investment and shift the AD curve to the right.C. reduce investment and shift the AD curve to the left.D. reduce investment and shift the AD curve to the right.

1.18 Eckstein has lost her job in a Massachusetts textile plant because of import competition.She intends to take a short course in electronics and move to California where sheanticipates that a new job opportunity will be available. We can say that Eckstein is facedwith:

A. secular unemployment.B. cyclical unemployment.C. structural unemployment.D. frictional unemployment.

1.19 Complete the following statement: At above full-employment equilibrium, ________ realGDP exceeds ________ real GDP and there is __________ gap. This can be caused by a_________ shock to either aggregate demand or short-run aggregate supply.

A. actual, potential, an inflationary, positiveB. actual, potential, an inflationary, negativeC. potential, actual, a recessionary, positiveD. potential, actual, a recessionary, negative


6/46

6

1.20 The graph below illustrates the foreign exchange market for US$ and South African Rand

Which of the following could cause the dollar – rand exchange rate to change as shownabove?A. American goods become more popular in South Africa.B. South African income rise, while U.S. incomes remain unchanged.C. The U.S. price level rises, while the South African price level remains unchanged.D. The U.S. real interest rate rises, while the South African real interest rate remains

unchanged.

Quantity of US$ (millions per day)300 100

7.46

7.80

8.34

D2

S1

S2

D1

Rands perdollar

500

E2

E1


7/46

7

QUESTION 2 (38 marks)

2.1 Use the following information and answer the questions that follow:

S = -1560 + 0,07YI = 1200G = 1550X = 890M = 670t = 0,18

2.1.1 Write down the Consumption function after tax has been taken into account and interpreteach of the values in the function. (3)

2.1.2 What will happen to the current account of the Balance of Payments if X decreases to 540? (2)

2.1.3 Calculate the equilibrium level of income and illustrate this graphically. (5) 2.1.4 By making use of the multiplier, calculate the effect of an increase in Investment of 100 on

the equilibrium income. (4)

2.2 Refer to the information in the table below for the country Tapei. The residents of Tapeionly buy 3 types of products, namely, clothes, meat and beer. Calculate the inflation ratefor Tapei for the 2000-2001. Show all calculations (10)

Products Number bought Prices 2000 Prices 2001Clothes 10 R10 R13Meat 12 R15 R17Beer 15 R4 R5

2.3 The South African government aims to slow spending growth over the next 3 years in anattempt to reduce the budget deficit.

2.3.1 What is a budget deficit? (1)2.3.2 Indicate whether this action by the SA government is expansionary/contractionary and

discretionary/ automatic. (2)2.3.3 Illustrate graphically, the impact of the above action on the SA goods market. (4)

2.4 Assume the inflation rate in South Africa is currently above the 6% upper end of theSouth African Reserve Bank’s (SARB) target range.

2.4.1 Name any one of the three actions the SARB can implement to reduce the currentinflation rate. (1)

2.4.2 Illustrate graphically, the impact of your action in 2.4.1 on (i) the money market and (ii)the goods market in South Africa. (6)


8/46

8


3.1 Mr. Mboweni makes a deposit of R100 000 in his savings account. The cash reserverequirement is 0.04 and the banks keep a voluntary 5% additional reserves. By making useof the credit multiplier, determine how much additional money will be created in theeconomy. (3)

3.2 The rand remains weak and under-valued against major currencies especially the USdollar.

3.2.1 What will be the impact of the above statement on SA exports and Total Expenditure (TE)?(2)

3.2.2 Make use of a graph to illustrate your answer in 3.2.1 on the market for rands. (3)

3.3 The Gini coefficient is one of the tools used for measuring income inequality. South Africahas a Gini coefficient of 0.77 while Italy has a Gini coefficient of 0.35. Make use of onegraph to illustrate the Gini coefficients of South Africa and Italy. Clearly indicate whichline represents the data for South Africa and Italy respectively. (4)


4.1 Household consumption in South Africa is under strain from higher inflation and risinginterest rates.

4.1.1 Make use of the Keynesian Transmission Mechanism and AD/AS analysis to explain theimpact of the above statement on the real and monetary sectors of the economy. Include allthe necessary graphs in your answer. (10)

TOTAL = 100


9/46

9

INSTRUKSIES:• Hierdie vraestel bestaan uit 4 vrae op 8 bladsye.• Beantwoord al die vrae. • Lees elke vraag sorgvuldig deur en skryf asseblief leesbaar. • Vir vrae 2 tot 4, toon al die nodige berekeninge en benoem alle grafieke duidelik.

VRAAG 1 (20 x 2 = 40 punte)Beantwoord vraag 1 in u antwoordboek. Skryf die letter van u keuse langs dievraagnommer neer. (bv. 1.1 A of 1.1 B).

1.1 Beantwoord die volgende vraag op grond van die volgende inligting oor ŉ hipotetieseekonomie.

Voltyds in diens = 80Deeltyds in diens = 25Werkloos = 15Ontmoedigde werkers = 5Lede van die ondergrondse ekonomie = 6Verbruikersprysindeks = 110



EECF 62406/ EFEC 62406



EXAMINATION/EKSAMEN: Hoof Jaareind 2014PAPER/VRAESTEL 1



TIME/TYD: 2 ure MARKS/PUNTE: 100


10/46

10

Die amptelike werkloosheidskoers in die bostaande ekonomie is:E. 18.8%F. 12.5%G. 16.7%H. 25%

1.3 Munte wat in kommersiële banke gehou word, is:E. ingesluit in M1, maar nie in M2 nie. F. ingesluit in beide M1 en M2. G. ingesluit in M2, maar nie in M1 nie. H. Nie deel van die nasie se geldaanbod nie.

1.3 Beantwoord die volgende vraag op grond van die volgende inligting van ŉ private gesloteekonomie, waar I Investering is, S spare is en Y bruto binnelandse produk (BBP) is.

I = 80S = -80 + 0.4Y

Verwys na die bostaande inligting. By ewewig, sal spare __________ wees:E. R40F. R120G. R60H. R80

Beantwoord vrae 1.4 en 1.5 op grond van die inligting vir ‘n private oop ekonomie:C = 40 + 0.8Y

I = 40 X = 20 M = 30

1.6 Verwys na die bostaande inligting. In hierdie ekonomie sal internasionale handel:E. BBP laat styg.F. BBP laat daal.G. geen effek op BBP hê nie.H. Inflasie in hierdie ekonomie veroorsaak.

1.7 Die waarde van outonome totale besteding is:

E. 40F. 70G. 130H. 0.8


11/46

11

1.6 Verwys na die bostaande diagram. Alles anders gelyk, ŉ skuif van die totale aanbodkurwevan AS 0 tot AS 1 kan veroorsaak word deur ŉ :

A. styging in owerheidsreguleringE. styging in totale vraag.F. styging in produktiwiteit.G. daling in nominale lone.

1.13 Verwys na die data in die tabel hier onder.

Besteebare inkomste SpareR 0 R 10

50 0100 10150 20200 30

Die marginale spaargeneigdheid (MPS) vir hierdie ekonomie is:E. 0.8F. 0.75G. 0.2H. 0.25

1.14 Beantwoord die volgende vraag op grond van die volgende verbruiks- en investeringsdatavir ŉ private geslote ekonomie.

C = 60 + 0.6Y I = 30Die ewewigsvlak van inkomste (Y) is:E. 360F. 225G. 200H. 135

Reele Binnelandse uitset

P r

s v

l a k

AS = T tale Aan! dA" = T tale #raa$


12/46

12

1.15 Die totale vraag na geld sal na links skuif as gevolg van:E. ŉ daling in nominale BBP.F. ŉ styging in die prysvlak.G. ŉ verandering in die rentekoers.H. ŉ styging in nominale BBP.

1.16 Veronderstel dat ŉ bank aanvanklik geen ekstra reserwes hou nie. Indien hy R5 000kontant van ŉ deposent ontvang en die bank bevind dat hy R4 500 veilig kan uitleen, danmoet die reserwevereiste __________wees.

E. 0%F. 10%G. 20%H. 25%

1.17 Veronderstel nominale BBP in 1999 was R100 miljard en in 2001 was dit R260 miljard.Die verbruikersprysindeks in 1999 was 100 en in 2001 was dit 180. Gedurende 1999 en2001 het die reële BBP gestyg met:

E. 160%F. 44%G. 37%H. 12%

1.18 Indien die wisselkoers verander van R1 = 2 euros na R1 = 3 euros, het:E. die Rand ge-appresieer in waarde..F. die Rand gedepresieer in waarde. G. die Rand nie ge-appresieer of gedepressieer nie, maar die euro het ge-appresieer in

waarde.H. S.A. uitvoere na Europa sal styg.

1.13 Beantwoord die volgende vraag op grond van die volgende tabel:

Rentekoers Transaksievraag nageld

Spekulasie-en voorsorgvraag na geld (Batevraag)

Geldaanbod

2% R220 R300 R4604% R220 R280 R4606% R220 R260 R4608% R220 R240 R46010% R220 R220 R460

ŉ Styging in die geldaanbod van R20 miljard sal veroorsaak dat die ewewigsrentekoers:E. daal met 4 persentasiepunte.F. daal met 2 persentasiepunte.G. styg met 4 persentasiepunte.H. styg met 2 persentasiepunte.


13/46

13

1.14 Indien die reserweverhouding 15% is en kommersiele bankiere besluit om addisionele(ekstra) reserwes te hou gelyk aan 5% van enige nuwe deposito’s dan sal die relevantewaarde van die monetêre vermenigvuldiger vir die bankstelsel, ________ wees.

A. 31/2.B. 4.C. 5.D. 10.

1.18 ŉ Regswaartse skuif van die totale vraagkurwe:E. kan uitsette, indiensnames en prysvlakke verhoog.F. kan uitset verhoog maar nie die prysvlak nie.G. kan tot in styging in potensiele inkomste van die gemeenskap lei.H. is die gevolg van ŉ beperkende fiskale beleid.

1.19 In watter van die volgende stelle omstandighede kan ons met vertroue inflasie verwag?E. beide totale aanbod en totale vraag styg.F. beide totale aanbod en totale vraag daal.G. totale aanbod daal en totale vraag styg . H. totale aanbod styg en totale vraag daal. .

1.20 Alles anders gelyk, ŉ daling in die reële rentekoers sal:E.investering uitbrei en die AD (totale vraagkurwe) na links skuif.F. investering uitbrei en die AD (totale vraagkurwe) na regs skuif.G. investering verminder en die AD (totale vraagkurwe) na links skuif.H. investering verminder en die AD (totale vraagkurwe) na regs skuif.

1.18 Eckstein het haar werk in ŉ Massachusetts tekstielaanleg verloor weensinvoermededinging. Sy beoog om ŉ kort kursus in elektornika te doen en dan na Californiate trek waar sy antisipeer dat ŉ nuwe werksgeleentheid beskikbaar sal wees. Ons kan sê datEckstein _____________ in die gesig staar.

A. sekulêre werkloosheid.B. sikliese werkloosheid.C. strukturele werkloosheid.D. wrywingswerkloosheid.

1.19 Voltooi die volgende stelling: Teen hoër as volle indiensname ewewig is, ________ reëleBBP meer as ________ reële BBP en daar is __________ gaping. Dit kan veroorsaak word deurŉ _________ skok aan óf totale vraag óf korttermyn totale aanbod.

E. werklike, potensiële, ŉ inflasionêre, positieweF. werklike, potensiële, ŉ inflasionêre, negatieweG. potensiële, werklike, ŉ reversionêre, positieweH. potensiële, werklike, ŉ reversionêre, negatiewe


14/46

14

1.20 Die onderstaande grafiek illustreer die buitelandse valutamarkte vir VSA $ en Suid-Afrikaanse Rand.

Watter van die volgende sal die dollar-rand wisselkoers so verander soos hierbo aangedui?E. Amerikaanse goedere word meer gewild in Suid-Afrika.F. Suid-Afrikaanse inkomste styg terwyl VSA-inkomste dieselfde bly.G. Die VSA prysvlak styg terwyl die Suid-Afrikaanse prysvlak onveranderd bly.H. Die VSA rentekoers styg, terwyl die Suid-Afrikaanse reële rentekoers onveranderd bly.

Hoeveelheid VSA $ (miljoen per dag)300 100

7.46

7.80

8.34

D2

S1

S2

D1

Rand perdoller

500

E2

E1

" = #raa$S = Aan! d% = %&e&i$


15/46

15

VRAAG 2 (38 punte)

2.1 Gebruik die volgende inligting en beantwoord die vrae wat volg.

S = -1560 + 0,07YI = 1200G = 1550X = 890M = 670t = 0,18

2.1.1 Skryf die verbruiksfunksie nadat belasting in ag geneem is neer en interpreteer elkeen vandie waardes van die funksie. (3)

2.1.2 Wat sal met die lopende rekening van die Betalingsbalans gebeur indien X daal tot 540? (2)

2.1.3 Bereken die ewewigsvlak van inkomste en illustreer dit grafies. (4) 2.1.4 Deur gebruik te maak van die vermenigvuldiger, bereken die effek wat ŉ styging van 100

in Investering op die ewewigsinkomste sal hê. (4) 2.1.5 Illustreer op u grafiek soos getrek in 2.1.3, hoe die styging in Investering (2.1.4) die grootte

van die ekonomie sal affekteer. (1)

2.5 Verwys na die inligting van ŉ land, Tapei, in die tabel hieronder. Die inwoners van Tapeikoop slegs 3 tipes produkte aan, naamlik klere, vleis en bier. Bereken die inflasiekoers virTapei vir 2000-2001. Toon alle berekeninge. (10)

Produkte Aantal gekoop Pryse 2000 Pryse 2001Klere 10 R10 R13Vleis 12 R15 R17Bier 15 R4 R5

2.6 Die Suid-Afrikaanse regering poog om groei in besteding te beperk oor die volgende 3 jaar in ŉ poging om die begrotingstekort te verminder.

2.3.1 Wat is ŉ begrotingstekort? (1)2.3.2 Dui aan of hierdie aksie deur die SA regering ekspansionisties/beperkend en

diskresionêr/outomaties is. (2)2.3.3 Illustreer grafies die impak van die bogenoemde aksie op die SA goederemark. (4)

2.7 Veronderstel die inflasiekoers in Suid-Afrika is tans bokant die 6% boonste perk van dieSuid-Afrikaanse Reserwebank (SARB) se teikenreeks.

2.4.1 Noem enige van die drie aksies wat die SARB kan implementeer om die huidigeinflasiekoers te verminder. (1)

2.4.2 Illustreer grafies die impak van u aksie in 2.4.1 op (i) die geldmark, en (ii) diegoederemark in Suid-Afrika (6)


16/46

16

VRAAG 3 (12 punte)

3.1 Mnr. Mboweni deponeer R100 000 in sy spaarrekening. Die kontant-reserwevereiste is0.04 en banke hou vrywillig ŉ addisionele 5% reserwes. Deur gebruik te maak van diekredietvermenigvuldiger, bepaal hoeveel addisionele geld in die ekonomie geskep salword. (3)

3.2 Die rand bly swak en onderwaardeer teen die grootste geldeenhede en veral die VSAdoller.

3.2.1 Wat sal die impak van die bostaande stelling op Suid-Afrikaanse uitvoere en totalebesteding (TE) wees? (2)

3.2.2 Maak gebruik van ŉ grafiek om u antwoord in 3.2.1 op die mark vir rand te illustreer.(3)

3.4 Die Gini-koeffisiënt is een van die instrumente wat gebruik word om inkomsteongelykheid te meet. Suid-Afrika het ŉ Gini-koeffisiënt van 0.77 terwyl Italië ŉ Gini-koeffisiënt van 0.35 het. Maak gebruik van een grafiek om die Gini-koeffisiënt van Suid-Afrika en Italië te illustreer. Toon duidelik aan watter lyn onderskeidelik die data van Suid-Afrika en Italië aandui. (4)

VRAAG 4 (10 punte)

4.1 Huishoudelike verbruik in Suid-Afrika is onder spanning wees hoër inflasie en stygenderentekoerse.

4.1.1 Maak gebruik van die Keynesiaanse Oordragmeganisme en die AD/AS (totale vraag entotale aanbod) analise om die impak van die bostaande stelling op die reële - en monetêresektore van die ekonomie te verduidelik. Sluit al die nodige grafieke by u antwoord in.

(10)

TOTAAL = 100


17/46

17

QUESTION 1 (20 x 2 = 40 marks)

1.1 B, 1.2 A; 1.3 D; 1.4 B; 1.5 B; 1.6 A; 1.7 C; 1.8 B; 1.9 A; 1.10 B; 1.11 B; 1.12 A; 1.13 B;1.14 C; 1.15 A; 1.16 C; 1.17 B; 1.18 D; 1.19 A; 1.20 C


2.1.1 C = 1560 + 0.93 (1-.018)Y= 1560 + 0.93(0.82)Y

= 1560 + 0.7626Y 1560 = Autonomous spending – level of consumption spending when Y= 0 0.7626 = MPC- if Y increases with R1, Consumption will increase by 72c (72% ofR1) [3]

2.1.2 Current account will go into a deficit of 130; imports will exceed exports. [2]



EECF 62406




MEMORANDUM





18/46

18

2.1.3 TE = 4530 + 0.7626YY = 4530 + 0.7626Y0.2374Y = 4530Y = R19081,71861 OR R19 081,72

[5]

2.1.4 Multiplier = 1/1 –mpc = 1/ 1- 0.7626 = 1/0.2374 = 4.212299915

Change in Ye = Change in TE x multiplier= 100 x 4.212299915= 421. 2299915

Equilibrium will increase by R421.229915 OR will increase to R19 502, 9486 [4]

2.2The total spending for 2000 (base year)/ Totaal spandeer per jaar (basis jaar) . (2)

Clothes / Klere 10 x 10 = R100Meat/ Kos 12 x 15 = R180Beer/ Bier 15 x 4 = R60Total R100 + R180 + R60 = R340

T%

T% = '

T% = 4530(0)7626'

*P"+'

4530

19081,72


19/46

19

The weight of spending on each item/ Gewig per item. (2)

Clothing/ Klere = 100/340 = 0.294117647Meat/ Vleis = 180/340 = 0.529411764 Beer/ Bier = 60/ 340 = 0.176470588

Specific price index for 2000 to 2001/ Spesifieke prysindeks vir 2000 tot 2001 (2)

Clothing/ Klere = 13/10 x 100 = 130Meat/ Vleis = 17/15 x 100 = 113.3333333Beer / Bier = 5/4 x 100 = 125

The composite price index and inflation rate for 2001/ Saamgestelde prysindex eninflasiekoers vir 2001. (4)

Composite price index = 130 x 0.294117647 = 38.23529411113.3333 x 0.529411764 = 59.99998227125 x 0.176470588 = 22.0588235

CPI = 38.23529411 + 59.99998227 + 22.0588235 = 120.2940998

Inflation rate = [(120.2940998 – 100)/100] x 100 = 20.2941% or 20.29%

2.3.1 When government spending exceeds revenue (taxes). [1] 2.3.2 Contractionary and discretionary [2]

2.3.3

½ mark each for correctly labelled axes! [4]

AS

A"0A"1

Pri-elevel

*"P+ ut.ut+ '


20/46

20

2.4.1 increase the repo rate ORincrease the reserve requirement ORsell government bonds [1]

2.4.2

Money market Goods market

½ mark each for correctly labelled axes! [6]


3.1 multiplier = 1/ res req + additional reserves = 1/ 0.09 = 11.11

Money created = Deposit x multiplier = 100 000 x 11.11 = R1 111 111.11 [3]

3.2.1 SA exports will increase and TE will increase [2]

A"0A"1

*"P+ ut.ut+ '

/S0/S1

/"

ASnterestrate

ney

Pri-elevel


21/46

21

3.2.2

½ mark each for correctly labelled axes!

3.3

"1 r Rands

"2 r Rands

S Rands

uantity R

.erR


22/46

22


4.1.1 ↓ in C → • Real sector: decrease in TE → ↓ in AD → ↑ in stock → surplus in the goods

market → ↓ in prices → ↓ in production → ↓ in Y → • Monetary sector: ↓ in Md → surplus in money market → downward pressure on

interest rates → interest rates ↓

4.1.1 Or ↑ in Md • Monetary Sector: ↑ in Md → ↑ in i • Real sector: ↓ I → ↓ TE →↓ in AD → ↑ in stock → surplus in the goods market

→ ↓ in prices → ↓ in production → ↓ in Y

AS

A"0A"1

Pri-elevel

*"P+ ut.ut+ '

T%T%0

T%1

/"0

/S

/"1

*"P

+'

/ ney


23/46

23

INSTRUCTIONS• This paper consists of 4 questions.• Answer all the questions.• Read the questions carefully and please write legibly.• Graphs should be clearly drawn and labelled• Show all calculations where necessary and all calculations should be rounded off to 2

decimal places.

QUESTION 1 (20x2 =40marks )Answer Question 1 in your answer book. Write the letter of your choice next to thequestion number (e.g. 1.1 A or 1.1 B).

UNIVERSITY OF THE FREE STATEUNIVERSITEIT VAN DIE VRYSTAATBLOEMFONTEIN CAMPUS/KAMPUS

EECF 62406/ EFEC 62406DEPARTMENT: ECONOMICSDEPARTEMENT: EKONOMIE


EXAMINATION/EKSAMEN: Additional Year end 2014PAPER/VRAESTEL 1







24/46

24

1.1 Given the scenario shown in the graph below, what would you recommend the Governorof the South African Reserve Bank do so that she meets her mandate of maintaining price

stability?

A. Lower the bank rate and buy securities.

B.

Raise the bank rate and buy securities.C. Lower the bank rate and sell securities.D. Raise the bank rate and sell securities .

1.2 Based on the circular flow model, money flows from households to businesses inA. the factor market.B. both the factor and product market.C. the product market.D. neither the factor nor product market.

1.3 Suppose hypothetically, the consumer price index (CPI) was 150 in Year 1 and was 180 inYear 2. What would be the inflation rate for this period?

A. 12%B. 16.7%C. 20%D. 30%

ASsrASlr

AD

CPI

GDP/Output


25/46

25

1.4 Real income for a given year would be less than nominal income in that year if:A. the consumer price index was less than 100 in that year.B. nominal income in that year was greater than nominal income in the previous year.C. nominal income in that year was less than nominal income in the previous year.D. the consumer price index was greater than 100 in that year.

1.5 Suppose workers become pessimistic about their future employment, which causes themto save more and spend less. If the economy is on the intermediate range of the aggregatesupply curve, then:

A. both real GDP and the price level will fall.B. real GDP will fall and the price level will rise.C. real GDP will rise and the price level will fall.

D.

both real GDP and the price level will rise.1.6 The Department of Commerce sums the payments made to resources to arrive at GDP in

the form of wages, rents, interest, profits, indirect taxes, and depreciation. This method ofderiving GDP is called the:

A. opportunity cost approach.B. income approachC. expenditure approach.D. monetarist approach.

1.7 Which of the following is true?A. Frictional unemployment implies a lack of available jobs.B. During a recession, cyclical unemployment will be low.C. When an economy is at full employment, actual unemployment will be less than the

natural rate of unemployment.D. When actual GDP equals potential GDP, the actual unemployment rate will equal the

economy's natural rate of unemployment.

Use the following information to answer question belowAssume that Steve received R 1 500.00 from his grandmother in Musina and decided todeposit the money into his bank account at Kovsies Bank. The following table illustrates themoney creation process due to Steve’s deposit.

CommercialBank

AcquiredReserves andDeposits (R)

RequiredReserves (R)

ExcessReserves (R)

Amount BanksCan Loan Out(R)

Kovsies Bank 1 500.00 225.00 1 275.00 1 275.00NedBank 1 275.00 191.25 1 083.75 1 083.75StanBank 1 083.75 162.56 921.19 921.19FNB 921.19 138.18 783.01 783.01Capitec 783.01 117.45 665.56 665.56Remainingtransactions

4 437.05 665.56 771.50 3 771.50


26/46

26

1.8 If the banks are fully loaned out, the monetary multiplier is ____ and the maximum value ofadditional deposits that can be created from the initial R1 500 deposit is ____.

A. 0.15; R 8 500.00B. 0.15; R 10 000.00C. 0.15; R 1 673.43D. 6.67; R 8 500.00

Use the information to answer the question below . A bank balance sheet appears as follows:Assets Liabilities

Reserves R130 Owner’s equity R100

Other non-currentassets R20 Deposits R50

1.9 The required reserve ratio is 20%. How much can this bank lend out at present, and howmuch money can the banking system create as a result assuming that the banking systemwill lend as much as it is able to lend? I.e. assume that 100% of the value of any loangranted is withdrawn and is used for payments which form new deposits and then newloans etc.

A. Lend: R110 ; Create: R550B. Lend: R120 ; Create: R650C. Lend: R80 ; Create: R160

D. Lend: R120 ; Create: R600

1.10 The combination of fiscal policies that would reinforce each other and be mostcontractionary would be a(n):

A. increase in government spending and taxes.B. decrease in government spending and taxes.C. decrease in government spending and an increase in taxes.D. increase in government spending and a decrease in taxes.

1.11 Suppose that an economy experiences a recession and government increases its spendingby R100 billion and increases lump sum taxes by R100 billion:

A. This has no impact on growth in the economy.B. This will result in economic growth in the economyC. The impact on growth is ambiguousD. An increase in growth can only be guaranteed if government expenditure is more than

taxes.


27/46

27

The table shows the GINI coefficient by population groupPopulation group GINI CoefficientBlacks 0.54Colored 0.52Indian/Asian 0.49White 0.39Republic of South Africa 0.64

1.12 A GINI coefficient of 0.54 for the Black African racial group compared to all other racesin the table above shows that

A. All Black African people are very rich

B.

Black African people are manyC. There are higher income differences amongst Black AfricansD. There are lower income differences amongst Black Africans

1.13 The US dollar exchange rate decreased from 7.24 South African Rand in 2009 to 7.05South African Rand in 2010, and it increased from 108.15 Japanese yen in 2009 to 110.11Japanese yen in 2010. From this information:

A. the US dollar depreciated against South African RandB. the US dollar appreciated against South African RandC. the US dollar deprecated against Japanese yenD. the Japanese yen appreciated against the South African Rand

The table below shows a summary of the transactions that took place between the individuals,firms and government units of country ABC and those of all other nations during the year 2013.

Item Rand (billion)Merchandise exportsMerchandise importsService receiptsNet direct investmentNet portfolio investment

Other investmentsPayments for servicesUnrecorded transactions

33030010032.468

35913421

1.14 What are the respective current account balance and the (change in gold and other foreignreserves) in the table above?

A. -4.4 billion; 459.4 BillionB. -4 billion; 459.4 billionC. -4 billion; 476.4 billionD. -4billion; 21.4 billion


28/46

28

1.15 Which of the following would cause the South African Rand to depreciate against the Japanese yen?A. Greater popularity of South African exports in Japan.B. A higher price level in Japan.

C.

Higher real interest rates in the South Africa.D. Higher incomes in the South Africa.

Unemployment categories Category Workers Frictional unemployment 250Structural unemployment 350Cyclical unemployment 600Discouraged workers 400Underemployment 450

1.16 According to the data in the Figure above and assuming the total number of workers is8,400, the strict unemployment rate is approximately:

A. 14%B. 15%C. 16%D. 19%

1.17 Suppose there are 10 million part-time workers and 90 million full-time workers in aneconomy. Five million of the part-time workers switch to full-time work. As a result:

A. the official unemployment rate will fall.B. the official unemployment rate will rise.C. the official unemployment rate will remain unchanged.D. the size of the labour force will increase.

1.18 In a closed economy, for every one rand that the households receive, 80 cents areconsumed and 20 cents are saved. Suppose the government introduces an income tax rate of10% , by how much will GDP increase if autonomous expenditure increases by R10million?

A. R50millionB. R25.74millionC. R35.71millionD. R55.56million


29/46

29

1.19 The graph below illustrates the Aggregate expenditure in the Keynesian Model

If government increases its spending such that autonomous expenditure increases from 7800 to 8 000 and the income increases to 9 000, then the size of the multiplier is equal to

A. 10B. 5C. 0.2D. 0.25

1.20 A closed and private economy has its expenditure information presented in the figurebelow:

At equilibrium, income equals ……. and savings equal…….A. R5 000; R0B. R6 000; R200C. R10 000; R4 000D. R10 000; R2 000

Income(Y)

AE1

45 0

8 000

Aggregateexpenditure

7 800e

AE2

9 000

8 000

Consumption,

Investment

Income(Y)

Consumption

Investment

450

2 000

5 000


30/46

30

QUESTION 2 (21 marks)The table below shows some data for the country called Land of Milk and Bread. Use theinformation in the table to answer questions 2.1, 2.2 and 2.3

Year Price of milk inrands

Quantity of milk(litres)

Price of Bread inrands

Quantity ofbread loaves

2012 10 1000 7 5002013 15 2000 9 9002014 20 1500 11 900

2.1 Assume the consumer basket of the inhabitants of the Land of Milk and Bread is made up ofmilk and bread only; calculate the inflation rate for 2013–2014, using 2013 as your base year.

(10)

Furthermore, assume that Land of Milk and Bread produces only milk and bread2.2 Calculate the nominal gross domestic product for the country for 2014. (2)2.3 By using 2012 as your base year, calculate the GDP deflator for 2014. (3)

2.4 In September 2013 there were 30 413 000 persons aged 15 – 65 years comprising the labourmarket, of which:

• 13 234 000 persons were employed• 3 944 000 persons were unemployed (official definition)• 13 235 000 persons were not economically active• 17 178 000 persons were in the labour force• 3 425 000 persons were discouraged work-seekers.

2.4.1 Calculate the official labour force participation rate using the information above. (2)2.4.2 By making use of the information above calculate the unemployment rate according to

the expanded definition. (2)2.4.3 Name the type of unemployment that is absent when an economy is at full employment.

(1)

2.5 In Bloemfontein ten families receive incomes of R1000 each and the other ten familiesreceive incomes of R200. In Bethlehem ten families receive incomes of R2000 each and theother ten families receive incomes of R220. In which community is the distribution ofincome more unequal? (1)


3.1 Use the following information and answer the questions that follow.C = 1800 + 0,91Y dI = 1200G = 1500X = 800M = 600+ 0.1Y T = 100 + 0,2Y


31/46

31

3.1.1 Write down the consumption function after tax has been taken into account. (3)3.1.2 Write down the net export function. (2)3.1.3 Use the information in 3.1 above to calculate the equilibrium level of income. (3)3.1.4 What is level of income at which the government budget will be balanced? (2)3.1.5 Using the information above, calculate the expenditure multiplier (3)


4.1 In an attempt to bring stability/confidence back to the banking sector, the South AfricanReserve Bank (SARB) is most likely going to increase the required reserve ratio. Using welllabelled graphs, illustrate and briefly explain the impact of the action in the followingmarkets:

4.1.1 The money market (4)4.1.2 The goods market (4)

4.2 Consider the South African rand/ USA dollar exchange rate, and focus on the market fordollars. Using the demand and supply curves, explain whether the dollar would appreciate ordepreciate against the rand, and whether that rand would appreciate or depreciate against thedollar in the following scenarios. Hint : Assume USA is the only trading partner of SouthAfrica

4.2.1 South Africans tastes and preferences for US goods increase. (4)4.2.2 The “Buy American (USA)” policy implemented by President Obama takes shape.

(4)

4.3 Make use of the Keynesian transmission mechanism and AD/AS analysis to illustrate andexplain the effect of a decision by the Reserve Bank to buy government bonds from SouthAfrican citizens, on the monetary and real sectors of the economy. Make use of all the necessarygraphs in your answer. (10)

TOTAL = 100


32/46

32

INSTRUKSIES• Hierdie vraestel bestaan uit 4 vrae.• Beantwoord al die vrae.• Lees die vrae aandagtig deur en skryf leesbaar.• Grafieke moet duidelik geteken en benoem word.• Toon al die berekeninge waar nodig en alle berekeninge moet afgerond word tot 2

desimale plekke.

UNIVERSITY OF THE FREE STATEUNIVERSITEIT VAN DIE VRYSTAATBLOEMFONTEIN CAMPUS/KAMPUS

EECF 62406/ EFEC 62406DEPARTMENT: ECONOMICSDEPARTEMENT: EKONOMIE


EXAMINATION/EKSAMEN: Bykomende Jaareind 2014PAPER/VRAESTEL 1



TIME/TYD: 2 ure MARKS/PUNTE: 100




33/46

33

VRAAG 1 (20x2 = 40 punte)

Beantwoord Vraag 1 in jou antwoord boek. Skryf net die letter van jou keuse teenoor dievraag nommer (e.g. 1.1 A of 1.1 B).

1.1 Gegewe ŉ scenario soos deur die onderstaande grafiek gewys, wat sou jy aan dieGoewerneur van die Suid Afrikaanse Reserwe Bank aanbeveel om te doen sodat sy haarmandaat van handhawing van prysstabiliteit bereik?

A.

Verlaag die bankkoers en koop sekuriteite.B. Verhoog die bankkoers en koop sekuriteite.C. Verlaag die bankkoers en verkoop sekuriteite.D. Verhoog die bankkoers en verkoop sekuriteite.

1.2 Op grond van die sirkulêre vloei model, geld vloei van die huishouding na besighede inA. die faktor mark.B. beide die faktor- en die produkte markte.C. die produkte mark.D. nie die faktor of die produkte mark nie.

1.3 Veronderstel hipoteties, dat die verbruikersprys indeks (VPI) in Jaar 1: 150 was, en in Jaar2: 180 was. Wat sal die inflasiekoers vir die periode wees?

A. 12%B. 16.7%C. 20%D. 30%

#P AS(korttermyn)

AS(langtermyn)

AD

BBP/Uitsette

VPI


34/46

34

1.4 Reële inkomste vir ŉ jaar sal minder as die nominale inkomste in daardie jaar wees as:A. die verbruikersprysindeks minder as 100 in daardie jaar was.B. nominale inkomste in die jaar groter as die nominale inkomste in die vorige jaar was.C. nominale inkomste in die jaar minder as die nominale inkomste in die vorige jaar was.D. die verbruikersprysindeks meer as 100 in daardie jaar was.

1.5 Veronderstel werkers raak pessimisties oor hul toekomstige indiensname, wat veroorsaakdat hulle meer spaar en minder spandeer. As die ekonomie op die intermediêre reeks vandie totale aanbod kurwe is, dan sal:

A. beide reële BBP en die prysvlak afneem.B. reële BBP sal afneem en die prysvlak sal toeneem.C. reële BBP sal toeneem en die prysvlak sal afneem.D. beide reële BBP en die prysvlak toeneem.

1.6 Die Departement van Handel tel die betalings wat gemaak word aan hulpbronne wat inBBP kom in die vorm van lone, rente, winste, indirekte belasting, en waardeverminderingop. Hierdie metode van afleiding van BBP word genoem die:

A. geleentheidskoste benadering.B. inkomste benadering.C. bestedings benadering.D. Monetaristiese benadering.

1.7 Watter van die volgende is waar?A. Wrywingswerkloosheid impliseer ŉ tekort aan beskikbare werk.B. Gedurende ŉ resessie, sal sikliese werkloosheid laag wees.C. Indien die ekonomie by volle indiensname is, sal die werklike werkloosheid minder as

die natuurlike koers van werkloosheid wees.D. Wanneer werklike BBP gelyk is aan potensiële BBP, sal die werklike werkloosheidskoers

gelyk wees aan die ekonomie se natuurlike koers van werkloosheid.

Gebruik die volgende inligting om die onderstaande vraag te beantwoordVeronderstel dat Steve R 1 500.00 van sy ouma in Musina ontvang het en besluit het om sy geldin sy bankrekening by Kovsie Bank te deponeer. Die volgende tabel illustreer diegeldskeppingsproses weens Steve se deposito.

KommersiëleBank

VerkrygdeReserwes enDeposito’s (R)

VereisteReserwes (R)

OortolligeReserwes (R)

Bedrag watBanke kanuitleen (R)

Kovsies Bank 1 500.00 225.00 1 275.00 1 275.00Nedbank 1 275.00 191.25 1 083.75 1 083.75Standard Bank 1 083.75 162.56 921.19 921.19FNB 921.19 138.18 783.01 783.01Capitec 783.01 117.45 665.56 665.56Oorblywendetransaksies

4 437.05 665.56 771.50 3 771.50


35/46

35

1.8 Indien die banke ten volle uitgeleen is, sal die monitêre/geld vermenigvuldiger_______wees en die maksimum waarde van die addisionele deposito’s wat deur dieaanvanklike R1500 deposito geskep is ______ wees.

A. 0.15; R 8 500.00B. 0.15; R 10 000.00C. 0.15; R 1 673.43D. 6.67; R 8 500.00

Gebruik die inligting om die onderstaande vraag te beantwoord . ŉ Bankbalansblad verskynas volg:Bates Laste

Reserwes R130 Eienaarsbelang R100Ander nie-bedryfsbates

R20 Deposito’s R50

1.9 Die reserwevereiste-koers is 20%. Hoeveel kan die bank tans uitleen, en hoeveel geld kandie bank stelsel gevolglik skep met die veronderstelling dat die bank stelsel so veel as wathy kan sal uitleen? M.a.w. neem aan dat 100% van die waarde van enige lening wattoegestaan, onttrek en gebruik word vir die betalings wat nuwe deposito en dan nuwelenings ens. vorm.

A. Leen: R110 ; Skep: R550

B.

Leen: R120 ; Skep: R650C. Leen: R80 ; Skep: R160D. Leen: R120 ; Skep: R600

1.10 Die kombinasie van fiskale beleid wat mekaar sal versterk en wat die mees beperkend salwees, is ŉ :

A. toename in staatsbesteding en belasting.B. afname in staatsbesteding en belasting.C. afname in staatsbesteding en toename in belasting.D. toename in staatsbesteding en afname in belasting.

1.11 Veronderstel dat die ekonomie ŉ resessie ervaar en die regering verhoog staatsbestedingmet R100 miljard en verhoog enkelbedrag ( lump sum ) belasting met R100 miljard:

A. Dit het geen inpak op die groei in die ekonomie nie.B. Dit sal ekonomiese groei in die ekonomie tot gevolg hê.C. Die impak op groei is dubbelsinnig.D. ŉ Verhoging in ekonomiese groei kan slegs gewaarborg word indien die staatsbesteding

meer as die belasting is.


36/46

36

Die tabel toon die GINI koëffisiënt per populasie groepPopulasie groep GINI koëffisiënt Swartes 0.54Kleurlinge 0.52Indies/Asiaties 0.49Blankes 0.39Republiek van Suid-Afrika 0.64

1.12 ŉ GINI koëffisiënt van 0.54 vir die Swart Afrikane rasgroep, vergeleke met al die anderrasse in die bostaande tabel, dui daarop dat:

A. Alle Swart Afrika mense baie ryk is.B. Swart Afrikane mense baie is.

C. Daar ŉ hoër inkomste verskil tussen Swart Afrikane is.D. Daar ŉ laer inkomste verskil tussen Swart Afrikane is.

1.13 Die VS dollar wisselkoers het van 7.24 Suid-Afrikaanse Rand in 2009 tot 7.05 Suid-Afrikaanse Rand in 2010 afgeneem, en dit het vanaf 108.15 Japannese yen in 2009 tot110.11 Japannese yen in 2010 verhoog. Vanaf die inligting het:

A. die VS dollar verswak teenoor die Suid-Afrikaanse Rand.B. die VS dollar versterk teenoor die Suid-Afrikaanse Rand.C. die VS dollar verswak teenoor die Japannese yen.D. die Japannese yen versterk teenoor die Suid-Afrikaanse Rand.

Die onderstaande tabel toon ŉ opsomming van die transaksies wat plaasgevind het tussenindividue, besighede en die regerings eenhede in land ABC en daardie met al die ander landegedurende die jaar 2013.

Item Rand (miljard)UitvoergoedereInvoergoedereDienste-ontvangstesNetto direkte investeringNetto portefeulje investeringAnder investeringBetaling vir diensteOnaangetekende transaksies

33030010032.46835913421

1.14 Wat is die onderskeie lopende rekeningbalans en die verandering in goud en anderbuitelandse reserwes in die bostaande tabel?

A. -4.4 miljard; 459.4 miljardB. -4 miljard; 459.4 miljardC. -4 miljard; 476.4 miljardD. -4miljard; 21.4 miljard


37/46

37

1.15 Watter van die volgende sal veroorsaak dat die Suid-Afrikaanse Rand teenoor dieJapannese Yen verswak?

A. Groter gewildheid van Suid-Afrikaanse uitvoere in Japan.B. ŉ Hoër prysvlak in Japan.C. Hoër reële rentekoers in Suid-Afrika.D. Hoër inkomstes in Suid-Afrika.

Werkloosheid kategorieë Kategorie Werkers Wrywingswerkloosheid 250Strukturele werkloosheid 350Sikliese werkloosheid 600Ontmoedigde werkers 400Werkloosheid 450

1.16 Volgens die data in die bostaande figuur en met die veronderstelling dat die totalehoeveelheid werkers 8,400 is, is die streng werkloosheidkoers ongeveer:

A. 14%B. 15%C. 16%D. 19%

1.17 Veronderstel dat daar 100 miljoen deeltydse werkers en 90 miljoen voltydse werkers inŉ ekonomie is. Vyf miljoen van die deeltydse werkers skakel oor na voltydse werk.Gevolglik:

A. sal die amptelike werkloosheidskoers afneem.B. sal die amptelike werkloosheidskoers toeneem.C. sal die amptelike werkloosheidkoers onveranderd bly.D. sal die grootte van die arbeidsmag toeneem.

1.18 In ŉ geslote ekonomie, vir elke een rand wat die huishoudings ontvang, word 80 sentverbruik en 20 sent word gespaar. Gestel die regering stel ŉ inkomstebelastingkoers van10% in, met hoeveel sal BBP toeneem indien outonome besteding met R10 miljoentoeneem?

A. R50 miljoen

B. R25.74 miljoenC. R35.71 miljoenD. R55.56 miljoen


38/46

38

1.19 Die onderstaande grafiek illustreer die Totale besteding in die Keynesiaanse Model.

Indien die regering sy uitgawes verhoog sodat outonome besteding vanaf 7800 tot 8000en die inkomste tot 9000 verhoog, dan is die grootte van die vermenigvuldiger gelyk aan:

A. 10

B.

5C. 0.2D. 0.25

1.20 ŉ Geslote en private ekonomie se bestedingsinligting word in die onderstaande figuurvoorgestel:

By ewewig is, inkomste gelyk aan……. en besparings gelyk aan…….A. R5 000; R0B. R6 000; R200C. R10 000; R4 000D. R10 000; R2 000

Inkomste '

A%1

45 0

8 000

Totalebesteding

7 800

e

A%2

9 000

8 000

450

Verbruiks-besteding,

Investering

Inkomste (Y)

Verbruiksbesteding

Investering 2 000

5 000


39/46

39

VRAAG 2 (21 punte)Die onderstaande tabel toon data vir die land genaamd Land van Melk en Brood. Gebruik dieinligting in die tabel om Vraag 2.1, 2.2 en 2.3 te beantwoord.Jaar Prys van melk in

randHoeveelheidmelk (liter)

Prys van broodin rand

Hoeveelheid vanbrode

2012 10 1000 7 5002013 15 2000 9 9002014 20 1500 11 900

2.1 Veronderstel dat die verbruiksmandjie van die bevolking van die Land van Melk en Brooduit melk en brood alleenlik bestaan; bereken die inflasiekoers vir 2013-2014, deur 2013 asbasisjaar te gebruik. (10)

Daarbenewens, veronderstel dat die Land van Melk en Brood slegs melk en brood produseer2.2 Bereken die nominale bruto binnelandse produk vir die land vir 2014. (2)2.3 Deur 2012 as jou basisjaar te gebruik, bereken die BBP deflator vir 2014. (3)

2.4 In September 2013 was daar 30 413 000 persone tussen die ouderdomme van 15 – 65 jaarwaaruit die arbeidsmark bestaan het, van wie:

• 13 234 000 persone was in diens geneem• 3 944 000 persone was werkloos (amptelike definisie)• 13 235 000 persone was nie ekonomies aktief nie• 17 178 000 persone was in die arbeidsmag• 3 425 000 persone was ontmoedigde werk-soekers.

2.4.1 Bereken die amptelike arbeidsmagdeelnamekoers deur die bostaande inligting tegebruik. (2)

2.4.2 Deur gebruik te maak van die bostaande inligting, bereken die werkloosheidskoersvolgens die uitgebreide definisie. (2)

2.4.3 Noem die tipe werkloosheid wat ontbreek as ŉ ekonomie by volle indiensname is.(1)

2.5 In Bloemfontein ontvang 10 families inkomstes van R1000 elk en die ander tien familiesinkomstes van R200. In Bethlehem ontvang tien families inkomstes van R2000 elk en dieander tien families ontvang inkomstes van R220. In watter gemeenskap is die verspreidingvan inkomste meer ongelyk? (1)


40/46

40

VRAAG 3 (13 punte)

3.1 Gebruik die volgende inligting en beantwoord die vrae wat volg:C = 1800 + 0,91Y dI = 1200G = 1500X = 800M = 600+ 0.1Y T = 100 + 0,2Y

3.1.1 Skryf die bestedingsfunksie neer nadat belasting in berekening gebring is. (3)3.1.2 Skryf die netto uitvoer funksie neer. (2)3.1.3 Gebruik die bostaande inligting om die ewewigsinkomste te bereken. (3)3.1.4 Wat is die inkomstevlak waar die regeringsbegroting gebalanseer sal wees? (2)3.1.5 Deur gebruik te maak van die bostaande inligting, bereken die

bestedingsvermenigvuldiger. (3)

VRAAG 4 (26 punte)

4.1 In ŉ poging om stabiliteit/ vertroue in die banksektor terug te bring, sal die Suid-AfrikaanseReserwe Bank (SARB) waarskynlik die vereiste reserwekoers verhoog. Deur gebruik te maakvan duidelik gemerkte grafieke, illustreer en verduidelik kortliks die impak van die aksies indie volgende markte:

4.1.1 Die geldmark (4)4.1.2 Die goedere mark (4)

4.2 Oorweeg die Suid-Afrikaanse rand/VSA dollar wisselkoers, en fokus op die mark vandollars. Deur gebruik te maak van vraag- en aanbod kurwes, verduidelik of die dollar teenoordie rand gaan versterk of verswak in die volgende scenario’s. Wenk : Neem aan dat die VSAdie enigste handelsvennoot van Suid-Afrika is.

4.2.1 Suid-Afrikaners se smaak en voorkeure vir VSA se produkte verhoog. (4)4.2.2 Die “Koop Amerikaans (VSA)” beleid wat deur President Obama geïmplementeer is

neem vorm aan. . (4)

4.3 Maak gebruik van die Keynesiaanse transmissiemeganisme en die Totale Vraag en TotaleAanbod (AD/AS) analise om die effek van ŉ besluit deur die Reserwebank om staatseffekte van

Suid-Afrikaanse burgers te koop, op die geld-en reële sektore van die ekonomie te illustreer enverduidelik . Maak gebruik van al die nodige grafieke in jou antwoord. (10)

TOTAAL = 100


41/46

41

UNIVERSITEIT VAN DIE VRYSTAATUNIVERSITY OF THE FREE STATE

HOOFKAMPUS/MAIN CAMPUS & QWAQWA CAMPUS

EECF62406

DEPARTEMENT EKONOMIEDEPARTMENT OF ECONOMICS

CONTACT NUMBER: KONTAKNOMMER: 401 3406/ 9196/ 5069

ADDITIONAL YEAR-END EXAMINATION: NOVEMBER 2013 BYKOMENDE JAAREIND EKSAMEN: NOVEMBER 2013

ASSESSOR(E)/ 1. Mrs C.CampherASSESSOR(S): 2. Mr C. Mudzingiri

MODERATOR: Mr. N. Keyser

TYD/TIME: 2 uur/hours PUNTE/MARKS: 100Question 1 20x2 marks

1.1

.D 1.15.D 1.2 .C 1.16.A 1.3 .C 1.17.C 1.4 .D 1.18.C 1.5 .A 1.19.B 1.6 .B 1.20.D 1.7 .D 1.8 .D 1.9 .D 1.10 .C 1.11 .B 1.12 .C 1.13 .A 1.14 .C


42/46

42

Question 2 21 marksThe table below shows some data from land of milk and bread. Use the table to answer question2.1, 2.2 and 2.3year Price of milk in

randsQuantity of milk(litres)

Price of Bread inrands

Quantity ofbread loaves

2012 10 1000 7 5002013 15 2000 9 9002014 20 1500 11 900

2.6 Assuming the consumer basket of inhabitants of land of milk and bread is made up ofmilk and bread; calculate the inflation rate for 2013–2014, use 2013 as your base year.

(10)i) Amount spend in the base year-15 X 2000 + 9 X 900 = 30 000 + 8100 = 38 100

ii) Weights – Milk – 30000/38100= 0.79 , Bread - 8100/38100=0.21 iii) Specific price index - 20/15 X100= 133.33 , 11/9 X100 = 122.22 iv) Composite price index -133.33 X 0.79= 105.33, 122.22 X 0.21= 25.67, 105.33 +

25.67 =131 v) Inflation rate-(131-100)/100 =31%

2.7 Assuming that land of milk and bread only produces milk and breadCalculate the nominal gross domestic product for 2014. (2)

20 X 1500 + 11 X 900= 30000 + 9900 = 39900

2.8 Taking 2012 as your base year, calculate the GDP deflator for 2014 (3)

Nominal GDP = 39900 Real GDP= 1500 X10 + 900 X 7= 15000 +6300 = 21 300

Deflator = NGRP/RGDP = 39900/21300 X100 =187.32

2.9 In September 2013 there were 30 413 000 persons aged 15 – 65 years comprising thelabour market, of which:

• 13 234 000 persons were employed• 3 944 000 persons were unemployed (official definition)• 13 235 000 persons were not economically active• 17 178 000 persons were in the labour force• 3 425 000 persons were discouraged work-seekers.

2.9.1 Calculate the official labour force participation rate using the informationabove.Labour force part. rate = [Labour force/ Adult pop] x 100 (1 mark if

formula is correct)

=17 178 000/30 413 000 X100 =56.48% (2)


43/46

43

2.9.2 Calculate the expanded definition unemployment rate using theinformation above. (2)

Expanded defn. of unemployment=(3 944 000+3 425 000)/ (17 178 000+3 425 000)X100 =35.77

2.9.3 Name the type of unemployment that is absent when an economy is at fullemployment. (1)

Cyclical unemployment

2.10 In Bloemfontein ten families have incomes of R1000 each and the other ten families haveincomes of R200. In Bethlehem ten families have incomes of R2000 each and the otherten families have incomes of R220. In which community is the distribution of incomemore unequal? Bethlehem (1)

Question 3 13 marks

3.2 Use the following information and answer the questions that follow.C = 1800 + 0,91Y dI = 1200G = 1500X = 800M = 600+ 0.1Y T = 100 + 0,2Y

3.2.1 Write down the consumption function after tax imposition (3)

C = 1800 + 0,91Y d, Yd= Y-T, T= 100+ 0.2Y, Y d= Y- (100+ 0.2Y)= 0.8Y-100 C=1800+ 0.91(0.8Y-100) C=1709+0.728Y (3 marks for correct C even without the stages)

3.2.2 Write down the net export function (NX) after tax imposition (2)M = 600+ 0.1Y ,

NX=800-600+ 0.1Y = 200-0.1Y 3.2.3 Use the information 3.1 above to calculate the equilibrium level of income. (3)

TE=C+I+G+X-M TE=1709+0.728Y+1200+1500+200-0.1Y TE=4609+0.628Y (3 marks for correct TE even without the stages)

3.2.4 What is level of income when the government budget balanced? (2)T=G 100+0.2Y=1500


44/46

44

0.2Y=1400Y=7000 (2marks for correct Y even without the stages)

3.2.5 Using the information above, calculate the expenditure multiplier (3)M=I/1-[c(1-t)-m] =1/1-[0.91(1-0.2)-0.1] = 2.68

Question 4 26 marks

4.3 As a way of bringing sanity in the banking sector, the South African Reserve Bank (SARB)is most likely going to increase the require reserve ratio. Using well labelled graphs, illustrateand briefly explain the impact of the action in the following markets:

4.3.1 The money market (4)

MS interest labelling

4.3.2 The goods market (4)

CPI Y AD shift to the left labelling

/S 0/S 1

nterest

/ ney !alan-e

/"

/S 0

A" 0A" 1

*"P '

P


45/46

45

4.4 Consider the South African rand/ US dollar exchange rate, and focus on the market fordollar. Using the demand and supply curves, explain whether the dollar would appreciate ordepreciate against the rand, and whether that rand would appreciate or depreciate against thedollar in the following scenarios. Use the information above to answer 4.2.1 and 4.2. 2: Hint :Assume US is the only trading partner of South

4.4.1 South Africans tastes and preferences for US goods increase. (4)

Demand for US dollar increases. US dollar appreciates/ rand depreciate

4.4.2

The “Buy American (US)” policy implemented by President Obama takes shape. (4)

Supply for US decrease in the foreign market. The US dollar appreciates/ The rand depreciates

S 0

S 1

" 0

" 1

Rands.er

uantity S

uantity S

" 0

S 0Rands .erd llar


46/46

4.5 Make use of the Keynesian transmission mechanism and AD/AS analysis to illustrate andexplain the effect of a decision by the Reserve Bank to buy government bonds from SouthAfrican citizens on the monetary and real sectors of the economy. Make use of all the necessarygraphs in your answer. (10)

/ netary se-t r /S r

Real Se-t r T% P '

" 0

nterest

interest

AS 0

P

" 1

" 0

" 0

T%1

T%0

T%=' T%

Exam 2014 with memo (1).pdf

Documents