EECF62306

UNIVERSITY OF THE FREE STATE

DEPARTMENT OF ECONOMICS
TEST 2
DATE: 10 SEPTEMBER 2013
LECTURERS: MS. C. CAMPHER/ MR. S. GUVURIRO/
MR. C. MUDZINGIRI
MODERATOR: MR. N. KEYSER
DURATION: 1 HOUR

MARKS: 50

Instructions:
This paper consists of 4 questions on 4 pages.
Answer all the questions.
Read the questions carefully and please write legibly.
Show all calculations and where necessary round off to four decimal places.
QUESTION 1
Answer Question 1 on the answer sheet provided.

[11 x 2 = 22 MARKS]

1.1 A closed and private economy has its expenditure information presented in the figure
below:
450
Consumption,
Consumption
Investment

1 000

Investment
5 000

Income(Y)

At equilibrium, income equals . and savings equal.

A. R5 000; R0
B. R6 000; R200
C. R10 000; R1 000
D. R10 000; R2 000

1.2 An EECF62306 student bought a cup of coffee with a R20 note. This represent the use of
money as a
A. store of value.
B. medium of exchange.
C. unit of account.
D. checkable deposit.
1.3 In the .. range of the Aggregate Supply curve, expansionary fiscal policy causes
Aggregate .. to increase, which results in a higher price level and a higher
equilibrium level of real GDP.
A. classical; Supply
B. classical; Demand
C. intermediate; Supply
D. intermediate; Demand
1.4 A budget deficit is
A. a budget in which there are no automatic stabilizers.
B. a budget which occurs when there is no nondiscretionary fiscal policy.
C. a budget in which government expenditures exceed government revenues in a given
period.
D. a budget in which government revenues exceed government expenditures in a given
time period.
1.5 Comparing how many rands it takes to attend university each year to annual earnings on a
job represents the use of money as a
A. store of value.
B. medium of exchange.
C. unit of account.
D. statistic.
1.6 In the Keynesian Model, if aggregate expenditures (AE) are less than GDP, then
A. inventory or stock is depleted.
B. inventory or stock is unchanged.
C. employment decreases.
D. employment increases.
1.7 The expenditure multiplier, when the marginal propensity to save (MPS) is 0.10, marginal
propensity to import is 0.10 and tax rate (t) is 15%, will be
A. 2.985
B. 2.857
C. 5
D. 10

1.8 Which of the following policy actions by the South African Reserve Bank would cause
the money supply to decrease?
A. An open market purchase of government securities
B. A decrease in the required reserve ratio
C. A decrease in the repo rate
D. An increase in the repo rate
1.9 Which of the following is an example of expansionary fiscal policy?
A. An increase in taxes
B. A decrease in government spending
C. An increase in government spending
D. An increase in taxes and a decrease in government spending equally
1.10 If the required reserve ratio is a uniform 25% on all deposits, the money multiplier
will be
A. 4.00
B. 2.50
C. 0.40
D. 0.25
1.11 Assume a two-asset economy with money and government bonds. People react to an
excess supply of money by
A. selling bonds, thus driving up the interest rate.
B. selling bonds, thus driving down the interest rate.
C. buying bonds, thus driving up the interest rate.
D. buying bonds, thus driving down the interest rate.

QUESTION 2

[9Marks]

2.1 Suppose you are an economic adviser to the president and the economy needs a real GDP
increase of R500 billion to reach full employment equilibrium. If the marginal propensity
to consume is 0.75 and you are a Keynesian,
2.1.1

By how much must the government increase its expenditure to get the economy to full
employment?
[2]

2.1.2

How do you classify the policy action you stated in 2.1.1 in terms of discretionary or
non-discretionary; expansionary or contractionary, and fiscal or monetary?
[3]

2.1.3

Using the AD/AS framework, clearly show the impact of the policy you stated in
2.1.1 on the price level and real GDP.
[4]

QUESTION 3

[10Marks]

3.1 Tuckerland economy comprises of 15 million people. Figures presented by the statistics
office of Tuckerland show that investment expenditure (I) amounted to R300 million,
spending by its government (G) amounted to R150 million, the economys exports (X) were
R200 million. Autonomous consumption (C0) was R200 million. The marginal propensities
to consume (c) and to import (m) out of the disposable income (Yd) were 0.9 and 0.1
respectively and the tax rate (t) was 20%. Assuming income is represented as Y:
3.1.1

At what level of income (Y) is Tuckerland exporting exactly the same amount that she
is importing?
[2]

3.1.2

Write down the aggregate expenditure function of Tuckerland.

3.1.3

Use the data to calculate the equilibrium level of income and show it graphically. [4]

3.1.4

Given that an increase in investment expenditure by R90 million results in real GDP
increase of approximately R250 million. What is the approximate size of the
expenditure multiplier?
[2]

QUESTION 4

[2]

[9Marks]

4.1 The mission of the Reserve Bank is to protect the value of the rand internally and
externally. Briefly explain what that means.
[2]
4.2 Simon made a check deposit of R1 000.00 with First National Bank (FNB). If the bank
observes an excess reserve of 4% when the Reserve bank has a 6% required reserve ratio:
4.2.1

What is the size of the money multiplier in this situation?

[1]

4.2.2

Graphically illustrate the possible impact of FNBs move to suspend its excess reserve
of 4% internal policy on:

4.2.2.1 Money market

[3]

4.2.2.2 Goods market using AD/AS framework

[3]

End

EECF 62306
UNIVERSITEIT VAN DIE VRYSTAAT
DEPARTEMENT EKONOMIE
SEPTEMBER 2013
TOETS 2
DATUM: 10 SEPTEMBER 2013
DOSENTE: MEV. C. CAMPHER/ MNR. S. GUVURIRO/ MNR. C.
MUDZINGIRI
MODERATOR: MNR. N. KEYSER
TYD: 1 UUR

PUNTE: 50

Instruksies:
Hierdie vraestel bestaan uit 4 vrae op 5 bladsye.
Lees die vrae noukeurig en skryf asseblief netjies.
Toon alle berekeninge waar nodig en merk grafieke duidelik.
Rond af tot vier desimale punte.

Vraag 1
Beantwoord Vraag 1 op die antwoordblad verskaf.

[11 x 2 = 22 PUNTE]

1.1 'n Geslote en privaat ekonomie se bestedegingsinligting word geillustreer in die figuur
hieronder:
450
Verbruikersbesteding
Verbruikersbes
teding,
Investering
Investment

Investering

1 000
5 000

Inkomste (Y)

By ewewig is inkomste gelyk aan . en spare is gelyk aan .............

E. R5 000; R0
5

F. R6 000; R200
G. R10 000; R1 000
H. R10 000; R2 000

1.2 n EECF62306 student koop n koppie koffie met n R20 noot. Dit verteenwoordig die
gebruik van geld as n:
A. waardedraer
B. ruilmiddel
C. rekeneenheid
D. deposito

1.3 In die ........... fase van die Totale Aanbodskurwe, sal n ekspansionistiese fiskale beleid
veroorsaak dat Totale ........... verhoog, wat sal lei tot 'n hor prysvlak en 'n hor
ewewigsvlak van rele BBP.
A.
B.
C.
D.

klassieke; Aanbod
klassieke; Vraag
intermedire; Aanbod
intermedire; Vraag

1.4 n Begrotingstekort is
A. n begroting sonder enige outomatiese stabiliseerders.
B. n begroting wat plaasvind wanneer daar geen nie-diskresionre fiskale beleid is nie.
C. n begroting waarin regeringsbesteding, regeringsinkomste oorsky gedurende n
gegewe tydperk.
D. n begroting waarin regeringsinkomste, regeringsbesteding oorsky gedurende n
gegewe tydperk.

1.5 Deur te vergelyk hoeveel rande dit neem om elke jaar die Universiteit te kan bywoon
teenoor 'n jaarlikse inkomste van 'n werk verteenwoordig die gebruik van geld as 'n:
A. waardedraer.
B. ruilmiddel.
C. rekeneenheid.
D. statistiek.

1.6 Indien Totale Besteding (TE) minder is as BBP in die Keynesiaanse model, dan is
A. voorraad uitgeput.
B. voorraad onveranderd.
C. werkloosheid minder.
D. werkloosheid hoer.

1.7 Wanneer die MPS 0.1 is, die marginale geneigdheid om in te voer 0.1 is en die
belastingkoers (t) 15% is, sal die bestedegingsvermenigvuldiger gelyk wees aan
A.
B.
C.
D.

2.985
2.857
5
10

1.8 Watter van die volgende beleidsoptrede deur die Suid-Afrikaanse Reserwebank sal
veroorsaak dat die geldvoorraad verminder?
A. n Opemark aankoop van staatseffekte.
B. n Daling in die reserwevereiste.
C. n Daling in die repokoers.
D. n Toename in die repokoers.

1.9 Watter van die volgende is n voorbeeld van ekspansionistiese fiskale beleid?
A. n Toename in belasting.
B. n Daling in regeringsbesteding.
C. n Toename in regeringsbesteding.
D. n Gelyke toename in belasting en daling in regeringsbesteding.

1.10

Indien die vereistereserwe 'n eenvormige 25% is op alle deposito's, sal die
kredietvermenigvuldiger gelyk wees aan:
A. 4.00
B. 2.50
C. 0.40
D. 0.25

1.11

Veronderstel 'n twee-bate ekonomie met geld en staatseffekte. Mense sal reageer op 'n

surplus in die aanbod van geld deur:

A. staatseffekte te verkoop en dus rentekoerse laat styg.
B. staatseffekte te verkoop en dus rentekoerse laat daal.
C. staatseffekte te koop en dus rentekoerse laat styg.
D. staatseffekte te koop en dus rentekoerse laat daal.

VRAAG 2

[9 PUNTE]

2.1 Veronderstel jy is 'n ekonomiese advisier van die president en die ekonomie het 'n rele
BBP-toename van R500 miljard nodig om volle indiensname ewewigsvlak te bereik.
Indien die marginale geneigdheid om te verbruik 0,75 is en jy is 'n Keynesiaan:
2.1.1 Met hoeveel moet die regering sy besteding laat styg om die ekonomie by volle
indiensname te kry?
[2]
2.1.2 Hoe sal jy die beleidsaksie in 2.1.1 klassifiseer in terme van diskresionre of niediskresionre; ekspansionisties of beperkend; en fiskale of monetre?
[3]
2.1.3 Deur gebruik te maak van die AD/AS raamwerk toon duidelik die impak van die beleid
wat jy vermeld het in 2.1.1 op die prysvlak en rele BBP.
[4]

VRAAG 3

[10 PUNTE]

3.1 Tuckerland ekonomie bestaan uit 15 miljoen mense. Syfers wat deur die statistieke
kantoor van Tuckerland verskaf is wys dat Investering (I) R300 miljoen beloop,
Regeringsbesteding (G) R150 miljoen beloop, en die ekonomie se uitvoere (X) R200
miljoen was. Outonome verbruikersbesteding (C0) was R200 miljoen. Die marginale
geneigdheid om te verbruik (c) en om in te voer (m) van besteebare inkomste (Yd) was
0,9 en 0,1 onderskeidelik en die belastingkoers (t) was 20%. Veronderstel inkomste word
verteenwoordig deur Y:
3.1.1 By watter vlak van inkomste (Y) is Tuckerland se uitvoere dieselfde bedrag as sy
invoere?
[2]
3.1.2 Skryf die totale bestedegingsfunskie van Tuckerland neer.

[2]

3.1.3 Maak gebruik van die data om die ewewigsvlak van inkomste te bereken en toon dit
grafies.

[4]

3.1.4 Gegewe dat n toename van R90miljoen in Investering n toename van R250 miljoen in
rele BBP veroorsaak. Wat is die waarde van die bestedegingsvermenigvuldiger?

VRAAG 4

[2]

[9 PUNTE]

4.1 Die missie van die Reserwebank is om die interne en eksterne waarde van die Rand te
beskerm. Verduidelik kortliks wat dit beteken.
[2]
4.2 Simon het n tjek van R1000 by Eerste Nasionale Bank gedeponeer. Indien die bank n
ekstra reserwe van 4% behou terwyl die Reserwebank 6% reserwes vereis:
4.2.1 Wat is die waarde van die vermenigvuldiger in hierdie geval?

[1]

4.2.2 Illustreer grafies die moontlike impak van FNB se besluit om sy internebeleid van n
oortollige reserwe van 4% op te skort op die:
4.2.2.1 Geldmark

[3]

4.2.2.2 Goedere mark deur gebruik te maak van die AD/AS raamwerk

[3]

Einde