UNIVERSITY OF THE FREE STATE/ UNIVERSITEIT VAN DIE VRYSTAAT

MAIN CAMPUS / HOOFKAMPUS

EECF62306
DEPARTMENT: ECONOMICS
DEPARTEMENT: EKONOMIE
CONTACT NUMBER: KONTAKNOMMER: 401 3406/ 9196
MAIN YEAR-END EXAMINATION: NOVEMBER 2013
HOOFJAAREINDEKSAMEN: NOVEMBER 2013
ASSESSOR(E): Mrs/Mev. C. Campher; Mrs/ Mev. C. Duvenhage
ASSESSOR(S): Mr/ Mnr. S. Guvuriro; Mr./ Mnr. C. Mudzingiri
MODERATOR: Mr/ Mnr N. Keyser
TIME / TYD: 2 hours/ ure

MARKS / PUNTE: 100

INSTRUCTIONS:
This paper consists of 5 questions on 6 pages.
Answer all the questions.
Read each question carefully and please write legibly.
For questions 2 to 5, show all necessary calculations and label all graphs clearly.
QUESTION 1
(2 x 22 = 44)
Answer Question 1 on the answer sheet attached to the back of the question paper.
1.1 The transactions demand for money is the demand for money by households for
A. rainy day spending.
B. predictable spending purposes.
C. liquidity purposes.
D. investing purposes.
1.2 GDP includes
A. the negative attributes in our quest for more goods and services, such as soil erosion
and deforested landscape.
B. all quality improvements resulting from higher-quality goods replacing inferior goods.
C. the cleanup expenses associated with pollution.
D. the value of leisure.
1.3 Suppose a German bank purchases a South African Treasury bond. This transaction
would be recorded in the and is considered a in South Africa.
A. current account ; factor payment
B. current account ; factor receipt
C. financial account ; capital inflow
D. financial account ; capital outflow
1

1.4 Suppose the net export function is given as NX = 40 0.08Y and exports increase by R40
billion. Ceteris paribus, what will be the income level that gives a balanced trade?
A. R500 billion
B. R750 billion
C. R1000 billion
D. Its undefined
1.5 When the required reserve ratio ., the money multiplier .such that the money
supply and it is a(an) monetary policy.
A. increases; increases; increases; contractionary
B. increases; decreases; decreases; expansionary
C. increases; increases; increases; expansionary
D. increases; decreases; decreases; contractionary
1.6 People react to an excess demand for 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.
1.7 If a countrys population grows at the same rate as its real GDP, then real per capita GDP
A. grows at an increasing rate.
B. grows at a constant rate.
C. doesnt change.
D. decreases at a decreasing rate.
1.8 The graph below illustrates the foreign exchange market for US$ and South African Rand
Rands per
dollar
8.34

S1
E1
S2

7.80
7.46

E2

D1
D2

100 300

500

Quantity of US$ (millions per day)

Which of the following could cause the dollar rand exchange rate to change as shown
above?
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.
2

1.9 Based on the circular flow model, money flows from households to businesses in
A. the factor market.
B. both the factor and product market.
C. the product market.
D. neither the factor nor product market.
1.10
A.
B.
C.
D.

If the underground economy is sizable, GDP will

understate the economys performance.
overstate the economys performance.
fluctuate unpredictably.
accurately reflect this subterranean activity.

1.11
A.
B.
C.
D.

The Lorenz curve

shows the ideal mix between direct and indirect taxes for a country.
shows how income is distributed among citizens of a country.
matches the level of tax collections of a government to tax levels of a country.
matches government spending to government income.

1.12
A.
B.
C.
D.

Which of the following can create demand-pull inflation?

Excessive aggregate spending
Sharply rising oil prices
Higher labour costs
Recessions and depressions

1.13 In year 1, the prices of goods X, Y, and Z are R2, R4, and R6 per unit, respectively. In
year 2, the prices of goods X, Y, and Z are R3, R4, and R7, respectively. In year 2, twice
as many units of each good are produced as in year 1. In year 1, 20 units of X, 40 units of
Y, and 60 units of Z are produced. If year 1 is the base year, what does real GDP equal in
year 2?
A. 640
B. 1120
C. 1180
D. 1280
1.14 Danielle, a BCom Economics student at UFS spends all his pocket money on beer and
cigarettes. In 2011, he bought 60 beers and 20 packets of cigarettes. Using the
information in the table below, what is the approximate inflation rate faced by Danielle?
Year
Beer
Cigarettes
2011

R2.50

R7.00

2012

R3.00

R8.00

A.
B.
C.
D.

16.24%
17.24%
18.24%
19.24%

1.15 If the savings function is S = -200 + 0.25Y in a closed economy with no government
and there is an increase in autonomous expenditure of 100, then the final increase in GDP
will be
A. 75
B. 100
C. 400
D. 200
1.16 Suppose the economy is initially operating in a recession. In order to tackle the
recession, the South African Reserve Bank can the repo rate, which will result
in other short term interest rates . and the AD curve shifting.
A. lower; falling, rightwards
B. raise; rising; leftwards
C. raise, rising; rightwards
D. lower; rising; rightwards
1.17
A.
B.
C.
D.

Unemployment insurance payments

rise during a recession and thus reduce the impact of the recession.
rise during a recession and thus increase the impact of the recession.
rise during inflationary episodes and thus reduce the impact of the inflation.
fall during a recession and thus increase the impact of the recession.

1.18
A.
B.
C.
D.

Unemployment that is of short duration to allow a person time to find a new job is
structural unemployment.
cyclical unemployment.
frictional unemployment.
under-employment.

1.19 Assume a simplified banking system subject to a 20 percent required reserve ratio. If
there is an initial increase in deposits of R100 000, the money supply
A. increases by R100 000.
B. increases by R500 000.
C. increases by R600 000.
D. decreases by R500 000.
1.20 The ease with which an asset can be converted into a medium of exchange is known
as
A. volatility.
B. liquidity.
C. currency.
D. speculative exchange.

1.21 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
1.22 Which of the following is a problem when comparing GDP per capita between
nations?
A. GDP per capita fails to measure income distribution.
B. Fluctuations in exchange rates affect differences in GDP per capita.
C. GDP per capita is subject to different measurement errors in different nations.
D. All of the above answers are correct.
QUESTION 2

[12]

2.1 Assume that price level is flexible and that the economy is currently operating at its full
employment output. Holding other things constant and on separate graphs, show how
each of the following events affect the equilibrium price level and equilibrium level of
output in the short run.
2.1.1 An increase in labour costs
[4]
2.1.2 An increase in aggregate demand
[4]
2.1.3 A significant increase in net exports
[4]
QUESTION 3

[15]

3.1 Suppose your market basket for a college education consisted of only the four items listed
in the following table:
Item
2012
2013
Tuition and fees for two semesters
R45 000
R50 000
Room and board for nine months
R60 000
R62 000
Payment for 10 textbooks
R10 000
R12 000
Soft drinks: 20 bottles of coca-colas
R1 500
R2 000
5

Using 2012 as the base year:

3.1.1 Calculate the college education Price Index for 2013.
[2]
3.1.2 Calculate the college education inflation rate in the period given.
[2]
3.1.3 Suppose the answer in 3.1.2 was equal to an inflation rate of 6.9% in South Africa and
SARB has repo rate as an instrument to use. State the action to take and show its
impact on the money market using a graph.
[4]
3.1.4 Suppose the inflation rate was 1.2% and the SARB has the repo rate as its only
instrument, classify the action it can take in terms of discretionary or nondiscretionary; expansionary or contractionary, and fiscal or monetary?
[3]
3.2 In point form, describe the four relevant criteria used to determine whether a person is
officially unemployed.
[4]
QUESTION 4

[14]

4.1 A summary of the expenditures for a hypothetical economy are given as:
C = 850 + 0.6Y
I = 750
NX = 750 0.1Y
G = 1000
T = 0.25Y
4.1.1
4.1.2
4.1.3

What level of income gives neither a budget surplus nor budget deficit?
[2]
Plot the net export function showing clearly its values when there is trade balance.
[3]
Calculate the spending multiplier for this economy.
[3]

4.2 Suppose the marginal propensity to consume is given as 0.75 and the size of the
autonomous spending is 3380. Using the Keynesian model, graphically show the impact
of an increase in investment by 50.
[6]
QUESTION 5
[15]
5.1 Suppose the South African Reserve Bank purchases government bonds. Use a complete
Keynesian Transmission Mechanism chain reaction, as well as all necessary graphs, to
explain and illustrate the impact of this action on monetary and real sectors of the
economy.
[10]
5.2 What is the term that refers to the price of one currency expressed in terms of the other?
[1]
5.3 Assume Japan is the only trading partner of South Africa, show how a rise of income in
South Africa will impact the market for South African rand and state whether that results
in the appreciation or depreciation of the rand
[4]

End

UNIVERSITY OF THE FREE STATE/ UNIVERSITEIT VAN DIE VRYSTAAT

MAIN CAMPUS / HOOFKAMPUS
EECF62306
DEPARTMENT: ECONOMICS
DEPARTEMENT: EKONOMIE
CONTACT NUMBER: KONTAKNOMMER: 401 3406/ 9196
MAIN YEAR-END EXAMINATION: NOVEMBER 2013
HOOFJAAREINDEKSAMEN: NOVEMBER 2013
ASSESSOR(E): Mrs/Mev. C. Campher; Mrs/ Mev. C. Duvenhage
ASSESSOR(S): Mr/ Mnr. S. Guvuriro; Mr./ Mnr. C. Mudzingiri
MODERATOR: Mr/ Mnr N. Keyser
TIME / TYD: 2 hours/ ure
MARKS / PUNTE: 100
INSTRUKSIES
Hierdie vraestel bestaan uit 5 vrae op 6 bladsye.
Beantwoord al die vrae
Lees elke vraag sorgvuldig deur en skryf asseblief leesbaar.
Vir vrae 2 tot 5, toon alle nodige berekeninge en etiketteer alle grafieke duidelik.
VRAAG 1
Beantwoord Vraag 1 op die antwoordblad wat aan die vraestel geheg is.

(2 x 22 = 44)

1.1 Die transaksievraag na geld is die vraag na geld van huishoudings vir
A. spandering op renerige dag.
B. spandering op voorspelbare doeleindes.
C. likiditeitsdoeleindes.
D. investeringsdoeleindes.
1.2 BBP sluit in
A. die negatiewe kenmerke van ons soeke na meer goedere en dienste, soos gronderosie
en ontbosde landskappe.
B. alle kwaliteit verbeterings as gevolg van hor kwaliteit goedere wat minderwaardige
goedere vervang.
C. die skoonmaakkostes verbonde aan besoedeling.
D. die waarde van vryetyd.
1.3 Veronderstel Duitse bank koop Suid-Afrikaanse Skatkiswissel. Die transaksie sal
aangeteken word in die . en word geag in Suid-Afrika.
A. lopende rekening ; faktorbetaling
B. lopende rekening ; faktorontvangste
C. finansile rekening ; kapitale invloei.
7

D. finansile rekening ; kapitale uitvloei.

1.4 Veronderstel die netto uivoerfunksie word gegee as NX = 40 0.08Y en uitvoere verhoog
met R40 miljard. Ceteris paribus, wat sal die inkomstevlak wees waar handel
gebalanseerd is?
A. R500 miljard
B. R750 miljard
C. R1000 miljard
D. Dit is ongedefinieerd.
1.5 Wanneer die vereistereserwe verhouding ., sal die kredietvermenigvuldiger ..
sodat die geldaanbod en dit is n .. monetre beleid.
A. styg; styg; styg; beperkende.
B. styg; daal; daal; ekspansionistiese.
C. styg; styg; styg; ekspasnionistiese.
D. styg; daal; daal; beperkende.
1.6 Mense reageer op n oorskotvraag na geld deur
A. effekte te verkoop en dryf dus die rentekoers op.
B. effekte te verkoop en dryf dus die rentekoers af.
C. effekte te koop en dryf dus die rentekoers op.
D. effekte te koop en dryf dus die rentekoers af.
1.7 As n land se bevolking teen dieselfde koers as die rele BBP-groei, dan sal die rele per
capita BBP
A. teen n stygende koers groei.
B. teen n konstante koers groei.
C. nie verander nie.
D. daal teen n dalende koers.
1.8 Die grafiek hieronder illustreer die buitelandse valutamarkte vir VSA $ en die SuidAfrikaanse Rand.
Rand per
dollar
8.34

S1
E1
S2

7.80
7.46

E2

D1
D2

Hoeveelheid VSA$ (miljoene per dag)

100 300 500
Watter van die volgende kan veroorsaak dat die dollar-rand wisselkoers verander soos hierbo
aangetoon?
A. Amerikaanse goedere word meer gewild in Suid-Afrika.
B. Suid-Afrikaanse inkomste styg, terwyl VSA inkomste onveranderd bly.
C. Die VSA prysvlak styg, terwyl die Suid-Afrikaanse prysvlak onveranderd bly.
8

D. Die VSA se rele rentekoerse styg, terwyl die Suid-Afrikaanse rentekoerse

onveranderd bly.
1.9 Gebaseer op die sirkulrevloeimodel, vloei geld van huishoudings na besighede in
A. die faktormark.
B. beide die faktormark en die produktemark.
C. die produktemark.
D. nie die faktormark of die produktemark nie.
1.10
A.
B.
C.
D.

Indien die onwettige ekonomie groot is, sal BBP die

ekonomie se prestasie onderskat.
ekonomie se prestasie oorskat.
onvoorspelbaar fluktueer.
die ondergrondse aktiwiteite akkuraat reflekteer.

1.11
A.
B.
C.

Die Lorenz kurwe

toon die ideale mengsel tussen direkte en indirekte belastings vir n land aan.
toon hoe inkomste verdeel is onder die burgers van n land.
pas die vlak van belastinginvorderings van die regering by die belastingvlakke van n
land.
D. pas regeringsbesteding by regeringsinkomste.

1.12
A.
B.
C.
D.

Watter van die volgende kan vraagtrek-inflasie skep?

Oordadige totale besteding.
Skerp stygende oliepryse.
Ho arbeidskostes.
Resessies en depressies.

1.13 In jaar 1 is die pryse van goedere X, Y en Z, R2, R4 en R6 per eenheid,

onderskeidelik. In jaar 2 is die pryse van goedere X, Y en Z, R3, R4 en R7,
onderskeidelik. In jaar 2 word dubbel soveel eenhede van elke produk geproduseer as in
jaar 1. In jaar 1 is 20 eenhede van X, 40 eenhede van Y, en 60 eenhede van Z
geproduseer. As jaar 1 die basisjaar is, waaraan is die rele BBP gelyk in jaar 2?
A. 640
B. 1120
C. 1180
D. 1280

1.14 Danielle, n B.Com. Ekonomiestudent aan die UVS spandeer al sy sakgeld op bier en
sigarette. In 2011 het hy 60 biere en 20 pakkies sigarette gekoop. Deur gebruik te maak
van die inligting in die onderstaande tabel, wat is die beraamde inflasiekoers wat Danelle
in die gesig staar.
Jaar
Bier
Sigarette
2011

R2.50

R7.00

2012

R3.00

R8.00

A.
B.
C.
D.

16.24%
17.24%
18.24%
19.24%

1.15 As die spaarfunksie S = -200 + 0.25Y is in n geslote ekonomie met geen owerheid
nie en daar is n styging in die outonome besteding van 100, dan sal die finale styging in
BBP.. wees.
A. 75
B. 100
C. 400
D. 200
1.16 Veronderstel die ekonomie opereer aanvanklik in n resessie. Om die resessie aan te
spreek, kan die Suid-Afrikaanse Reserwebank die repokoers..wat sal
veroorsaak dat rentekoerse oor die korttermyn en die AD kurwe
na. skuif.
A. verlaag; daal; regs
B. verhoog; styg; links
C. verhoog; styg; regs
D. verlaag; styg; regs
1.17
A.
B.
C.
D.

Werkloosheidsversekeringbetalings
styg gedurende n resessie en dus verminder dit dus die impak van die resessie.
styg gedurende n resessie en verhoog dit dus die impak van die resessie.
styg gedurende inflasionre episodes en dus verminder die impak van die resessie.
daal gedurende n resessie en dus verhoog die impak van die resessie.

1.18
A.
B.
C.
D.

Werkloosheid wat van korte duur is om n persoon tyd te gee om nuwe werk te kry, is
strukturele werkloosheid.
sikliese werkloosheid.
wrywingswerkloosheid
onder-indiensname.

10

1.19 Neem n vereenvoudigde bankstelsel aan, wat onderhewig is aan n 20 persent

reserwevereiste. Indien daar oorspronklik n styging van R100 000 in depositos is, sal
die geldaanbod
A. styg met R100 000.
B. styg met R500 000.
C. styg met R600 000.
D. daal met R500 000.
1.20 Die gemak waarmee n bate omgesit kan word in n medium van verruiling, staan
bekend as
A. volatiliteit
B. likiditeit
C. geldeenheid.
D. spekulatiewe verruiling.
1.21 n Geslote en privaat ekonomie se bestedingsinligting word uitgebeeld in die figuur
hieronder.
Verbruik,
Investering

1 000

450

Verbruik

Investering

5 000
Inkomste(Y)
By ewewig, is inkomste gelyk aan.. en spaar gelyk aan..
A. R5 000; R0
B. R6 000; R200
C. R10 000; R1 000
D. R10 000; R2 000
1.22 Watter van die volgende is n probleem wanneer die BBP per capita tussen nasies
vergelyk word?
A. BBP per capita misluk om inkomsteverdeling te meet.
B. Fluktuasies in wisselkoerse affekteer verskille in BBP per capita.
C. BBP per capita is onderhewig aan verskillende metingsfoute in verskillende nasies.
D. Al die bogenoemde antwoorde is korrek.

11

VRAAG 2

[12]

2.1 Neem aan dat die prysvlak buigsaam is en dat die ekonomie tans by sy volle
indiensnamevlak opereer. Hou alle ander dinge konstant en toon op aparte grafieke aan
hoe elk van die volgende gebeure die ewewigsprysvlak en ewewigsuitsetvlak oor die
korttermyn affekteer.
2.1.1 n styging in arbeidskostes
[4]
2.1.2 n styging in totale vraag
[4]
2.1.3 n aansienlike styging in netto uitvoere.
[4]
VRAAG 3

[15]

3.1 Veronderstel jou markmandjie vir kollege opleiding bestaan uit slegs vier items wat in die
volgende tabel gelys word.
Item
2012
2013
Inskrywing en fooie vir twee semesters
R45 000
R50 000
Kamer en losies vir nege maande
R60 000
R62 000
Betaling vir 10 handboeke
R10 000
R12 000
Koeldranke: 20 bottels Coca-Cola
R1 500
R2 000

Gebruik 2012 as die basisjaar:

3.1.1 Bereken die kollege opleiding Prysindeks vir 2013
[2]
3.1.2 Bereken die kollege opleiding inflasiekoers gedurende die periode wat gegee is.
[2]
3.1.3 Veronderstel die antwoord in 3.1.2 was gelyk aan die inflasiekoers van 6.9% in SuidAfrika en die SARB het die repokoers as n instrument om te gebruik. Stel die aksie
wat geneem moet word voor en toon die impak op die geldmark aan deur van n grafiek
gebruik te maak.
[4]
3.1.4 Veronderstel die inflasiekoers was 1.2% en die SARB het slegs die repokoers as n
instrument, klassifiseer die aksie wat die SARB kan neem in terme van diskresionre en
nie- diskresionre; ekspansionisties of beperkend en fiskaal of monetre?
[3]
3.2 Puntsgewys, beskryf die vier relevante kriteria wat gebruik word om te bepaal of n
persoon amptelik werkloos is.
[4]
VRAAG 4

[14]

4.1 n Opsomming van die besteding vir n hipotetiese ekonomie word gegee as:
C = 850 + 0.6Y
I = 750
NX = 750 0.1Y
G = 1000
T = 0.25Y
4.1.1 Watter vlak van inkomste sal nie begrotingsurplus of -tekort gee nie?

[2]
12

4.1.2 Teken die netto uitvoer funksie en toon duidelik die waardes indien daar
handelsbalans/ewewig is.
[3]
4.1.3 Bereken die bestedingsvermenigvuldiger vir hierdie ekonomie.
[3]
4.2 Veronderstel die marginale verbruiksgeneigdheid word gegee as 0.75 en die grootte van
die outonome besteding is 3380. Deur gebruik te maak van die Keynesiaanse model,
toon grafies die impak van styging in investering van 50 aan.
[6]
VRAAG 5

[15]

5.1 Veronderstel die Suid-Afrikaanse Reserwebank koop staatseffekte. Gebruik volledige

Keynesiaanse Transmissiemeganisme kettingreaksie, asook die nodige grafieke, om die
impak van hierdie aksie op die monetre en rele sektore van die ekonomie te verduidelik
en te illustreer.
[10]
5.2 Wat is die term wat verwys na die prys van een geldeenheid wat uitgedruk word in terme
van ander.
[1]
5.3 Veronderstel Japan is die enigste handelsvennoot van Suid-Afrika, toon aan wat die
impak van styging in inkomste in Suid-Afrika op die mark vir Suid-Afrikaanse rand sal
wees en noem of dit appresiasie of depresiasie van die rand sal veroorsaak.
[4]
Einde

13

UNIVERSITY OF THE FREE STATE/ UNIVERSITEIT VAN DIE VRYSTAAT

MAIN CAMPUS / HOOFKAMPUS
EECF62306

MEMO

DEPARTMENT: ECONOMICS
DEPARTEMENT: EKONOMIE
CONTACT NUMBER: KONTAKNOMMER: 401 3406/ 9196
MAIN YEAR-END EXAMINATION: NOVEMBER 2013
HOOFJAAREINDEKSAMEN: NOVEMBER 2013
MEMO
TIME / TYD: 2 hours/ ure

MARKS / PUNTE: 100

INSTRUCTIONS:
This paper consists of 5 questions on 7 pages.
Answer all the questions.
Read each question carefully and please write legibly.
For questions 2 to 5, show all necessary calculations and label all graphs clearly.
QUESTION 1

(2 x 22 = 44)

1.1 B 1.2 C 1.3 C 1.4 C 1.5 D 1.6 A 1.7 C 1.8 C 1.9 C 1.10 A 1.11 B
1.12 A 1.13 B 1.14 B 1.15 C 1.16 A 1.17 A 1.18 C 1.19 B 1.20 B 1.21 C 1.22 D

14

QUESTION 2

[12]

2.2 Assume that price level is flexible and that the economy is currently operating at its full
employment output. Holding other things constant and on separate graphs, show how
each of the following events affect the equilibrium price level and equilibrium level of
output in the short run.
2.2.1

An increase in labour costs

[4]
SAS1

LAS
Price
level

SAS

for labels of all curves

AD0
Output

2.2.2

An increase in aggregate demand

LAS
Price
level

[4]
SAS

for labels of all curves

AD1
AD0
Output

2.2.3

A significant increase in net exports

LAS
Price
level

[4]
SAS

for labels of all curves

AD1
AD0
Output

15

QUESTION 3

[15]

3.3 Suppose your market basket for a college education consisted of only the four items listed
in the following table:
Item
2012
2013
Tuition and fees for two semesters
R45 000
R50 000
Room and board for nine months
R60 000
R62 000
Payment for 10 textbooks
R10 000
R12 000
Soft drinks: 20 bottles of coca-colas
R1 500
R2 000
Using 2012 as the base year:
3.3.1 Calculate the college education Price Index for 2013.
[2]
Price index for 2013 =
[(50 000 + 62 000 + 12 000 + 2 000)/(45 000 + 60 000 + 10 000 + 1 500)] x 100%
= (126 000/116 500) x 100%
= 108.1545%
3.3.2 Calculate the college education inflation rate in the period given.
Inflation rate = [(CPI2013 CPI2012)/CPI2012] x 100%
= [(108.1545 100)/100] x 100%
= 8.1545%
3.3.3

[2]

Suppose the answer in 3.1.2 was equal to an inflation rate of 6.9% in South Africa and
SARB has repo rate as an instrument to use. State the action to take and show its
impact on the money market using a graph.
[4]
Action:
Increase / Raise the repo rate
Interest
rate

MS1

MS0
labels of curves and axes

MD
Money balances
3.3.4

Suppose the inflation rate was 1.2% and the SARB has the repo rate as its only
instrument, classify the action it can take in terms of discretionary or nondiscretionary; expansionary or contractionary, and fiscal or monetary?
[3]
Discrectionary , contractionary , monetary policy

3.4 In point form, describe the relevant criteria used to determine whether a person is
officially unemployed.
[4]
- Within the working age group
e.g. (15 64 years)
- Does not work
- Willing and able to work
- Actively searching / has taken some actions to try to get a job.
16

QUESTION 4

[14]

4.3 A summary of the expenditures for a hypothetical economy are given as:
C = 850 + 0.6Y
I = 750
NX = 750 0.1Y
G = 1000
T = 0.25Y
4.3.1

What level of income gives neither a budget surplus nor budget deficit?
At G = T,

4.3.2

1000 = 0.25Y

[2]

<=> Y = 4000

Plot the net export function showing clearly its value when there is trade balance.
NX

[3]

750

Y
7 500

4.3.3

Calculate the spending multiplier for this economy. NX = 750 0.1Y

Marginal propensity to spent = c(1-t) m = 0.6(1 0.25) 0.1 = 0.35
Spending multiplier = 1 / (1 marginal propensity to spend)
= 1 / (1 0.35)
= 1.54

[3]

4.4 Suppose the marginal propensity to consume is given as 0.75 and the size of the
autonomous spending is 3380. Using the Keynesian model, graphically show the impact
of an increase in investment by 50.
[6]
450

TE

TE2 = 3430 + 0.75Y

TE1 = 3380 + 0.75Y

3430

3380

13 520

13 720

Minus 1 mark if axes are not labelled correctly.

17

QUESTION 5

[11]

5.4 Suppose the South African Reserve Bank purchases government bonds. Use a complete
Keynesian Transmission Mechanism chain reaction, as well as all necessary graphs, to
explain and illustrate the impact of this action on monetary and real sectors of the
economy.
[10]
MS0

Interest
rate

MS1

Interest
rate

MD

Money
balances

Investment

450

TE
CPI
AS

TE2
TE1

Auto TE1
Auto TE0
AD0

AD1
Y or GDP

SARB purchases bonds => MS => i

Prices => production => GDP or Y

Y0

=> I

Y1

=> TE

=> AD => stocks =>

5.5 What is the term that refers to the price of one currency expressed in terms of the other?
[1]
Exchange rate

18

5.6 Assume Japan is the only trading partner of South Africa, show how a rise of income in
South Africa will impact the market for South African rand and state whether that results
in the appreciation or depreciation of the rand
[4]
SS of rand0
Yen
per
rand

SS of rand1

Demand for rand

Quantity of rands

Depreciation of the rand

End

19

UNIVERSITEIT VAN DIE VRYSTAAT

UNIVERSITY OF THE FREE STATE
MAIN CAMPUS/ HOOFKAMPUS
EECF62306
DEPARTEMENT EKONOMIE
DEPARTMENT OF ECONOMICS
CONTACT NUMBER: KONTAKNOMMER: 401 3406/ 9196/ 5069
ADDITIONAL YEAR-END EXAMINATION: NOVEMBER 2013
BYKOMENDE JAAREIND EKSAMEN: NOVEMBER 2013
ASSESSOR(S): Mrs/Mev. C. Campher; Mrs/ Mev. C. Duvenhage
ASSESSOR(E): Mr/ Mnr. S. Guvuriro; Mr./ Mnr. C. Mudzingiri
MODERATOR: Mr/ Mnr. N. Keyser
TYD/TIME: 2 uur/hours
PUNTE/MARKS: 100
INSTRUCTIONS

This paper consists of 5 questions on 8 pages.

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
[25 x2 =50]
Answer Question 1 on the answer sheet attached to the back of the question paper.
1.1 If nominal GDP increased by 8.5% during 2012 and inflation for 2012 were to equal
4.9%, we can conclude that during 2012
A. Real GDP decreased
B. Prices decreased
C. Real GDP increased
D. Nominal GDP is likely to decrease to 3.6% in future
1.2 If real GDP is greater than potential GDP, we can conclude that in the long run
A. real GDP will equal potential GDP.
B. the quantity supplied will increase.
C. inflation will definitely decrease.
D. unemployment will decrease.
1.3 The production method of measuring GDP is calculated by summing up the
A. income earned at each point of production.
B. value added at each level of production.
20

C. profit made at each level of production.

D. value of all production.
1.4 If South Africa is maintaining a current account surplus then it is likely that it is
A. importing more than it is exporting.
B. overvaluing its currency.
C. exporting more than it is importing.
D. all of the above.
1.5 If the required reserve ratio held by commercial banks is 10%, and there is an additional
deposit of R4 000 into the banking system, then the maximum total new
A. money created is R36 000.
B. money created is R40 000.
C. loans created will be R40 000.
D. deposits into the banking system is R36 000.
1.6 If the demand for money increases we can expect that
(i) Money supply will increase
(ii) Price of bonds will decrease
(iii)Output will increase
(iv) Interest rate will increase
A.
B.
C.
D.

(i), (ii) (iii) and (iv)

(ii) and (iv)
(i), (ii) and (iii)
(ii), (iii) and (iV)

1.7 In a circular flow model including government, which of the following statements is
FALSE?
A. Businesses provide the government with taxes, goods and services.
B. Businesses provide households with income, goods and services.
C. Businesses receives services and payments from the government.
D. Households provide businesses with services and income.
1.8 Gross domestic product estimated on the basis of prevailing prices is known as
A. Net national product at current prices.
B. GDP at constant prices.
C. GDP at basic prices.
D. GDP at market prices.
1.9 Which of the following is an example of a final good or service?
A. Wheat purchased by a bakery to make bread with.
B. Coffee bean purchased to make coffee at home.
C. Bricks purchased by a construction company to be used in construction of
houses.
D. Fertiliser purchased by a farmer to fertilise his crops.

21

1.10 Jonathan receives a 5% wage increase in year 2012. During 2012, his real wage falls
by 1%. The price level in 2012 thus rose by
A. 4%
B. 6%
C. 5%
D. It is impossible to say
1.11 Assume the nominal GDP was R524 000 in 2011 and R 578 000 in 2012. If we treat
2011 as our base year and assume that real GDP growth was 4% in 2012, the GDP
deflator for 2012 is
A. 110.31
B. 106.06
C. 104.00
D. 90.66
1.12 The cost of a representative basket of goods and services in any year divided by the
cost in an earlier base year is
A. the unemployment rate.
B. the inflation rate.
C. the consumer price index.
D. economic growth index.
1.13 The labour force participation rate measures
A. the percentage of people of working age who have jobs.
B. the extent to which people want jobs but cant find them.
C. the percentage of people of working age who are members of the labour force.
D. the percentage of people in the labour force who are unemployed.
1.14 Autonomous consumption is
A. the portion of consumption that is dependent upon the level of income
B. the portion of consumption that is independent of the level of income
C. the steady increase in the consumption of goods and services that
automatically occurs as a nation develops
D. total consumption divided by total national income
1.15 In the short run, a decrease in wage rates, ceteris paribus, shifts the
A. SRAS curve to the right, causing equilibrium price level to fall and
equilibrium real GDP to increase.
B. SRAS curve to the right, causing the equilibrium price level to fall and
equilibrium real GDP to decrease.
C. AD curve to the right, causing equilibrium price level to rise and equilibrium
real GDP to increase.
D. AD curve to the right, causing equilibrium price level to rise and equilibrium
real GDP to decrease.

22

1.16 If the SARB increases the quantity of required reserves, the interest rate ________
and the quantity of money
.
A. falls; increases.
B. falls; decreases.
C. rises; increases.
D. rise; decreases.
1.17 If South Africas GDP is less than its GNP, then the income earned by foreign owners
of companies and foreign workers in South Africa is .. the income earned
by South Africans who have invested abroad, or who are working abroad.
A. greater than
B. added to
C. subtracted from
D. less than
1.18 If South Africans dramatically increase exports to the UK, we would expect the
A. supply of Pound Sterling to increase and the Rand to appreciate.
B. demand for Pound Sterling to increase and the Rand to appreciate.
C. supply of Pound Sterling to increase and the Rand to depreciate.
D. demand for Pound Sterling to increase and the Rand to depreciate.
1.19 The graph below illustrates the consumption expenditure in the Keynesian Model

In the graph above, if income is say 800, then consumption equals...... and saving
equals .........
A. 800; 0
B. 500; 50
C. 770; 30
D. 550; 250
1.20 A Gini coefficient of 0.9 means
A. income is equally distributed.
B. white citizens are richer than Indians.
C. income is unequally distributed.
D. fewer people have income and everyone else has none.
23

1.21 The difference between wealth and income is that

A. wealth does not include money.
B. income is measured in monetary values.
C. rich people have wealth while poor people have income only.
D. wealth is a stock of assets while income is a flow of earnings that results from
stock of wealth.
1.22 The ratio of the change in GDP to an initial autonomous change in aggregate spending
is the:
A. spending multiplier
B. permanent income rate
C. marginal expenditure rate
D. marginal propensity to consume
1.23 In the table below, when the exchange rate is 3 rands per pound,
Quantity
Demanded
200
240
300
360
390

A.
B.
C.
D.

Rand
per Pound
5
4
3
2
1

Quantity
Supplied
600
480
410
360
330

there is an excess supply of 110 pounds.

there is an excess demand of 110 pounds.
there is an excess supply of 110 rands.
there is an excess demand of 110 rands.

1.24 The graph below shows the Money market curves

Starting from an equilibrium at E1, a leftward shift of the money supply curve from MS1 to
MS2 would cause an excess:
A. demand for money, leading people to sell bonds.
B. demand for money, leading people to buy bonds.
C. supply of money, leading people to sell bonds.
D. supply of money, leading people to buy bonds.
24

1.25 Fiat money is money:

A. accepted by law regardless of its intrinsic value.
B. that is not included as part of the M1 money supply.
C. that is backed by gold or silver held on reserve by the government.
D. such as coins that are made from metal.
QUESTION 2

[13]

2.1 You are given the following information about the economy of Zululand in 2012, all
monetary figures are in billions of rands;
Autonomous consumption
Marginal propensity to consume
Investment
Government spending
Tax rate
Exports
Autonomous imports
Marginal propensity to import
Equilibrium income (output)
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5

400
0.69
300
500
0.14
350
320
?
2209.85

Construct a saving function for this economy.

(2)
What is the value of total consumption at the equilibrium level of output?
(3)
What is the value of the marginal propensity to import?
(3)
At what level of output is the government budget balanced?
(2)
Calculate the spending multiplier for Zululand if the economy is (i) a two sector
economy (without government and foreign sector) (ii) a three sector economy (with
government and no foreign sector)
(3)

QUESTION 3

[10]

3.1 If inflation increases above the stipulated target of 3-6% set by the SARB. The SARB
will be forced to increase the repo rate. Use the necessary graphical representation to show
Keynesian Transmission changes that will take place in the monetary and real sectors after
the action by SARB. Explain the changes that will materialize in the monetary and real sector
in full.
(10)

25

QUESTION 4

[13]

The information below relates to the inhabitants of Robben Island between the ages of 15 to
64.
Working age population
10 000

Formally employed
????

Self employed
2600

Unemployed
???
(Available to work
and have taken
active steps)
Not Available
to work
1300

Not economically
active
1900

Discouraged
workers
???

In the labour force/ economically active

???

4.1 If the strict unemployment is 10%, how many people are;

4.1.1 unemployed?
4.1.2 employed?

(3)

4.2 Furthermore, use the information to calculate,

4.2.1 the unemployment rate according to the expanded definition?
4.2.2 the labour force?

(2)
(2)

4.3 A windstorm hit Robben Island damaging industrial buildings and leaving 300 people
unemployed. By making use of the AD/AS (short-run) curves show the effect of the
windstorm on the Robben Island economy.
(4)
4.4 The government of Robben Island would like to adopt the Socialist ideology, where
income will be shared equally amongst citizens. Draw a Lorenz Curve showing income
distribution of Robben Island after implementing the socialistic ideology.
[2]

26

QUESTION 5

[14]

5.1 The table below shows information for Kovsies Commercial Bank.
% cash reserve
Deposit
Total reserves
requirement ratio
20 000
5500
W
8
32 000
X
10
600 000
1000

Excess reserves
0
8000
Z

5.1.1 Make use of the information in the table above to calculate the values of W, X and Z.
(6)
5.2 Consider the South African rand/ US dollar exchange rate, and focus on the market for
dollar. Using the demand and supply curves, explain whether the dollar would appreciate
or depreciate against the rand, and whether that rand would appreciate or depreciate
against the dollar in the following scenarios:
Hint: Assume US is the only trading partner of South Africa
5.2.1 GM motors a US Company opens a car production plant in Mpumalanga in South
Africa
[4]
5.2.2 Due to a poorly thought economic policy in South Africa, US companies in South
Africa disinvest and move to Mozambique.
[4]

The End

27

UNIVERSITEIT VAN DIE VRYSTAAT

UNIVERSITY OF THE FREE STATE
MAIN CAMPUS/ HOOFKAMPUS
EECF62306
DEPARTEMENT EKONOMIE
DEPARTMENT OF ECONOMICS
CONTACT NUMBER: KONTAKNOMMER: 401 3406/ 9196/ 5069
ADDITIONAL YEAR-END EXAMINATION: NOVEMBER 2013
BYKOMENDE JAAREIND EKSAMEN: NOVEMBER 2013
ASSESSOR(S): Mrs/Mev. C. Campher; Mrs/ Mev. C. Duvenhage
ASSESSOR(E): Mr/ Mnr. S. Guvuriro; Mr./ Mnr. C. Mudzingiri
MODERATOR: Mr/ Mnr. N. Keyser
TYD/TIME: 2 uur/hours
PUNTE/MARKS: 100
INSTRUKSIES

Hierdie vraestel bestaan uit 5 vrae op 8 bladsye.

Beantwoord al die vrae.

Lees die vrae deeglik en skryf asseblief leesbaar.

Grafieke moet duidelik geteken en benoem word.

Wys al die berekeninge waar nodig en alle berekeninge moet tot 2 desimale plekke
afgerond word.
VRAAG 1
__
[25 x2 =50]
Beantwoord Vraag 1 op die antwoordblad wat aan die vraestel geheg is.
1.1 Indien nominale BBP met 8.5% gedurende 2012 toegeneem het en inflasie vir 2012
gelykstaande aan 4.9% was, kan ons tot die gevolgtrekking kom dat in 2012
A. rele BBP afgeneem het.
B. pryse afgeneem het
C. rele BBP toegeneem het.
D. nominale BBP heel moontlik in die toekoms met 3.6% kan afneem.
1.2 Indien rele BBP groter is as die potensile BBP, kan ons die gevolgtrekking maak dat
in die lang termyn
A. rele BBP gelyk aan potensile BBP sal wees.
B. die hoeveelheid aangebied sal toeneem.
C. inflasie definitief sal afneem.
D. werkloosheid sal afneem.
1.3 Die produksiemetode van meting van BBP word bereken deur die optelling van die:
A. inkomste verdien by elke punt van produksie.
B. waarde toegevoeg by elke vlak van produksie.
28

C. winste gemaak by elke vlak van produksie.

D. waarde van al die produksie.
1.4 As Suid-Afrika n lopende rekening surplus handhaaf, dan is dit moontlik dat die
A. invoere die uitvoere oorskry.
B. Rand oorwaardeer is.
C. uitvoere die invoere oorskry.
D. Al die bogenoemde is korrek.
1.5 As die vereistereserwekoers wat by kommersile banke gehou word 10% is, en daar is
n addisionele deposito van R4 000 in die banksisteem, dan is die maksimum totale
nuwe
A. geld geskep R36 000.
B. geld geskep R40 000.
C. verbande geskep R40 000.
D. depositos in die bank sisteem R36 000.
1.6 As die vraag na geld toeneem dan kan ons verwag dat die
(i)
aanbod van geld sal toeneem.
(ii)
pryse van lenings sal afneem.
(iii) uitset sal toeneem.
(iv)
rentekoerse sal toeneem.
A.
B.
C.
D.

(i), (ii) (iii) en (iv)

(ii) en (iv)
(i), (ii) en (iii)
(ii), (iii) en (iv)

1.7 In n sirkulrevloeimodel insluitende die regering, watter van die volgende stellings is
VALS?
A. Besighede verskaf aan die regering belasting, goedere en dienste
B. Besighede verskaf aan die huishoudings inkomste, goedere en dienste.
C. Besighede ontvang dienste en betalings van die regering.
D. Huishoudings verskaf aan besighede dienste en inkomstes.
1.8 Bruto binnelandse produk wat geskat word op die basis van heersende pryse word
genoem
A. Netto nasional produk teen huidige pryse.
B. BBP teen konstante pryse.
C. BBP teen basiese pryse.
D. BBP teen markpryse.
1.9 Watter van die volgende is n voorbeeld van finale goedere of dienste?
A. Koring gekoop deur die bakkery om brood te maak.
B. Koffiebone gekoop om koffie by die huis te maak.
C. Stene gekoop deur n konstruksiemaatskappy om te gebruik in die bou van
huise.
D. Kunsmis gekoop deur die boer om oeste te bemes.
29

1.10 Jonathan ontvang a 5% loonverhoging in die jaar 2012. Gedurende 2012, neem sy
rele loon met 1% af. Dus het die prysvlakke in 2012 gestyg met
A. 4%
B. 6%
C. 5%
D. Onmoontlik om te s
1.11 Gestel die nominale BBP was R524 000 in 2011 en R578 000 in 2012. Indien ons
2011 as die basisjaar neem en aanneem dat die rele BBP groei in 2012 4% was, sal die
BBP deflator vir 2012________gewees.
A. 110.31
B. 106.06
C. 104.00
D. 90.66
1.12 Die koste van n verteenwoordigende mandjie goedere en dienste in enige gegewe
jaar gedeel deur die koste in n vorige basis jaar is die:
A. werkloosheidskoers.
B. inflasiekoers.
C. verbruikdersprysindeks.
D. ekonomiese groei-indeks.
1.13 Die arbeidsmagdeelnamekoers meet
A. die persentasie van mense van werkende ouderdom wat werk het.
B. die mate waarin mense werk soek maar nie kan vind nie.
C. die persentasie van mense van werkende ouderdom wat deel uitmaak van die
werksmag.
D. die persentasie van mense in die werkersmag wat werkloos is.
1.14 Outonome verbruik is
A. die deel van verbruik wat afhanklik van die inkomstevlak is.
B. die deel van verbruik wat onafhanklik van die inkomstevlak is.
C. die bestendige toename in verbruik van goedere en dienste wat outomaties
gebeur soos die volk ontwikkel.
D. totale verbruik gedeel deur totale nasionale inkomste.
1.15 In die korttermyn, n afname in die loonkoerse, ceteris paribus, skuif die
A. SRAS kurwe na regs, en veroorsaak dat die ewewigsprys afneem en rele
BBP toeneem.
B. SRAS kurwe na regs, en veroorsaak dat die ewewigsprys afneem en rele
BBP afneem.
C. AD kurwe na regs, en veroorsaak dat die ewewigsprys toeneem en rele
BBP toeneem.
D. AD kurwe na regs, en veroorsaak dat die ewewigsprys toeneem en rele
BBP afneem.

30

1.16 As die SARB die vereistereserwes verhoog, sal die rentekoers_______ en die
hoeveelheid geld ________
A. afneem: toeneem.
B. afneem; afneem.
C. toeneem; toeneem.
D. toeneem; afneem.
1.17 Indien Suid-Afrika se BBP minder is as sy BNP, dan is die inkomste wat deur
buitelandse eienaars van besighede en buitelanders in Suid-Afrika verdien
word_________ die inkomste verdien deur Suid-Afrikaners wat oorsee geinvesteer het,
of wat oorsee werk.
A. groter as
B. bygetel tot
C. afgetrek van
D. minder as
1.18 Indien Suid-Afrikaners drasties uitvoer na die Verenigde Koningkryk verhoog, kan ons
verwag dat die
A. aanbod van Pond sterling verhoog en die Rand sal appresieer.
B. vraag na Pond Sterling verhoog en die Rand sal appresieer.
C. aanbod van Pond sterling verhoog en die Rand sal depresieer.
D. vraag na Pond Sterling verhoog en die Rand sal depresieer.

1.19 Die onderstaande grafiek illustreer die verbruiksbesteding in die Keynisiaanse Model.

In die bostaande grafiek, indien inkomste 800 is, sal verbruik gelyk wees aan _____ en
besparing gelykstaande aan__________
A. 800; 0
B. 500; 50
C. 770; 30
D. 550; 250
1.20 n Gini koffisint van 0.9 beteken
A. dat inkomste gelyk verdeel is.
31

B. wit burgers ryker as Indirs is.

C. dat inkomste ongelyk verdeel is.
D. minder mense inkomstes het en al die ander het geen.
1.21 Die verskil tussen rykdom en inkomste is dat
A. rykdom nie geld insluit nie.
B. inkomste gemeet word in monetre waarde.
C. ryk mense rykdom het terwyl arm mense slegs inkomste het.
D. rykdom is n voorraad bates terwyl inkomste n vloei van verdienste is wat uit
rykdom spruit.
1.22 Die koers van die verandering in BBP teenoor die oorspronklike verandering in totale
besteding is die:
A. bestedingsvermenigvuldiger
B. permanente inkomstekoers
C. marginale bestedingskoers
D. marginale verbruiksgeneigdheid
1.23 In die onderstaande tabel, indien die wisselkoers 3 Rand per pond is,
Hoeveelheid
Gevra
200
240
300
360
390

A.
B.
C.
D.

Rand
per Pond
5
4
3
2
1

Hoeveelheid
Aangebied
600
480
410
360
330

is daar n oorskot aanbod van 110 pond.

is daar n oorskot vraag na 110 pond.
is daar n oorskot aanbod van 110 Rand.
is daar n oorskot vraag na 110 Rand.

1.24 Die onderstaande grafiek wys die Geldmarkkurwes

Begin by ewewig van E1. n Skuif na links van die aanbodkurwe van geld vanaf MS1 na MS2
sal lei tot n oorskot:
32

A.
B.
C.
D.

vraag na geld, wat daartoe lei dat mense effekte verkoop.

vraag na geld, wat daartoe lei dat mense effekte koop.
aanbod van geld, wat daartoe lei dat mense effekte verkoop.
aanbod van geld, wat daartoe lei dat mense effekte koop.

1.25 Magtigings (Fiat) geld is geld:

A. wat aanvaar word deur die wet ongeag hulle intrinsieke/egte waarde.
B. wat nie ingesluit word as deel van die M1 aanbod van geld nie.
C. wat deur goud of silver wat deur die regering as reserwes gehou word
gedek word.
D. soos munte wat gemaak word van metal.
VRAAG 2

[13]

2.1 Jy word die volgende inligting gegee rakende die ekonomie van Zululand in 2012, al die
monetre syfers is in miljard rand;
Outonome verbruik
Marginale verbruiksgeneigdheid
Investering
Regeringsbesteding
Belastingskoers
Uitvoere
Outonome Invoere
Marginale invoergeneigdheid
Ewewigsinkomste (-uitset)
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5

400
0.69
300
500
0.14
350
320
?
2209.85

Bepaal die besparingsfunksie vir die ekonomie.

(2)
Wat is die waarde van totale verbruiksbesteding teen die ewewigsvlak van uitset? (3)
Wat is die waarde van die marginale invoergeneigdheid?
(3)
Teen watter vlak van uitset is die regeringsbegroting gebalanseerd?
(2)
Bereken die bestedingsvermenigvuldiger vir Zululand as die ekonomie (i) n twee
sektor ekonomie is (sonder regerings- en buitelandse sektor) (ii) a drie sektor
ekonomie (met die regering en geen buitelandse sektor)
(3)

VRAAG 3

__

[10]

3.1 Indien die inflasie bo die gestipuleerde mikpunte van 3-6% -wat deur die SARB gestel isstyg, sal die SARB verplig wees om die terugkoop/repokoers te verhoog. Gebruik die nodige
grafiese voorstelling om die Keynesiaanse Transmissioemeganisme veranderinge te wys wat
sal plaasvind in die monetre en rele sektore na die aksie van die SARB. Verduidelik die
veranderinge wat in die sektore plaasvind volledig.

33

VRAAG 4

__

[13]

Die onderstaande inligting verwys na die inwoners van Robbeneiland tussen die ouderdom
van 15 en 64 jaar.
Werkende- ouderdom
populasie
10 000
Nie ekonomies aktief
Formele indiensname

????

Selfindiensname
2600

Werkloos
???
Beskikbaar vir werk
en het aktiewe
stappe geneem

In die arbeidsmag/ ekonomies aktief

???

1900

Nie beskikbaar
vir werk
1300

Ontmoedigde
werkers
???

4.1 As die streng werkloosheid 10% is, hoeveel mense is;

4.1.1 werkloos?
4.1.2 werkend?

(3)

4.2 Gebuik die inligting verder om die volgende te bereken;

4.2.1 Die werkloosheidskoers volgens die uitgebreide definisie.
4.2.2 Die arbeidsmag.

(2)
(2)

4.3 n Windstorm het Robbeneiland getref en het skade aan industrile gebou aangerig en 300
mense werkloos gelaat. Deur gebruik te maak van die AD/AS (korttermyn) kurwes wys
die effek wat die windstorm op Robbeneiland se ekonomie gehad het.
(4)
4.4 Die regering van Robbeneiland wil die Sosialistiese ideologie aanneem, waar inkomstes
gelyk tussen al die inwoners verdeel word. Teken die Lorenz Kurwe wat die
inkomsteverdeling van Robbeneidland wys na die implementering van di ideologie. (2)

34

VRAAG 5

[14]

5.1 Die onderstaande table wys inligting vir Kovsies Kommersile Bank.
% kontantreserwe
Depositos
Totale reserwes
Oorskot reserwes
vereiste koers
20 000
5500
0
W
8
32 000
8000
X
10
600 000
1010
Z
5.1.

Maak gebruik van die inligting in die bostaande table om die waardes van W, X en Z
te bereken.
(6)

5.2 Skenk oorweging aan die Suid-Afrikaanse Rand/VSA dollar wisselkoers en fokus op die
mark vir dollar.
Deur gebruik te maak van vraag- en aanbod kurwes, verduidelik of die dollar appresieer
of depresieer teen die Rand, en of die rand sal appresieer of depresieer teen die dollar
gegewe die volgende senarios:
Leidraad: Neem aan dat VSA die enigste handelsvenoot van Suid-Afrika is.
5.2.1 GM motors, n VSA Besigheid, open a motorproduksieaanleg in Mpumalanga in
Suid-Afrika.
[4]
5.2.3 As gevolg van swak deurdagte ekonomiese beleid in Suid-Afrika, het VSA besighede
in Suid-Afrika onttrek en beweeg na Mosambiek.
[4]

Die einde

35

UNIVERSITEIT VAN DIE VRYSTAAT

UNIVERSITY OF THE FREE STATE
HOOFKAMPUS/MAIN CAMPUS & QWAQWA CAMPUS
EECF62306
DEPARTEMENT EKONOMIE
DEPARTMENT 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.Campher
ASSESSOR(S): 2. Mnr. / Mr. S. Guvuriro
3. Mr C. Mudzingiri
MODERATOR: Mr. N. Keyser
TYD/TIME: 2 uur/hours

PUNTE/MARKS: 100

INSTRUCTIONS

This paper consists of 5 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

[25 x2 =50 marks]

1.1 C 1.2 A 1.3 B 1.4 C 1.5 B 1.6 B 1.7 C 1.8 D 1.9 B 1.10 B 1.11 B 1.12 C 1.13 C 1.14 B
1.15 A 1.16 D 1.17 D 1.18 A 1.19 C 1.20 D 1.21 D 1.22 A 1.23 A 1.24 A 1.25 A
Question 2

[13 marks]

3.0 You are given the following information about the economy of Zululand in 2012, all
monetary figures are in billions of rands;
Autonomous consumption
400
Marginal propensity to consume
0.69
Investment
300
Government spending
500
Tax rate
0.14
Exports
350
Autonomous Imports
320
36

Marginal propensity to import

Equilibrium income (output)

?
2209.85

3.1.1 Construct a saving function for this economy.

S= -C+ sYd
S= -400+ (1-0.69)(1-014)Y
S= -400 +0.27Y

(2)

3.1.2

(3)

What is the value of total consumption at the equilibrium level of output?

C=400+(0.69)(1-0.14)Y
C=400 + 0.59Y
C=400+ 0.59(2209.85)= 1703.81
3.1.3 What is the value of the marginal propensity to import?
Y=C+I+G+X-M
2209.85= 1703.81 +300+500+350-320-2209.85m
-323.46 = -2209.85m
m=0.14637
m=0.15

(3)

3.1.4 At what level of output is the government budget balanced?

T=0.14Y; G=500
T=G
0.14Y=500
Y=3571.429
Y=3571.43

(2)

3.1.5 Calculate the spending multiplier for Zululand if the economy is (i) a two sector
economy (without government and foreign sector) (ii) a three sector economy (with
government and no foreign sector)
(3)
(i)
M= 1/mps= 1/0.31=3.225806452=3.23
(ii)
M=1/1-c(1-t)=1/ 0.41= 2.459419577=2.439024=2.44

37

Question 3

[10 Marks]

3.1 If inflation increases above the stipulated target of 3-6% set by the SARB. The SARB
will be forced to increase the repo rate. Use the necessary graphical representation to show
Keynesian Transmission changes that will take place in the monetary and real sectors after
the action by SARB. Explain the changes that will materialize in the monetary and real sector
in full.
(10)
MS2

MS1

interest

Interest rate

rate

Md
Quantity of
money

TE

investment

Price

level

GDP
GDP

Monetary Sector : r

Real sector: r r

Ms
I

TE

38

Question 4

[13Marks]

4.1 The information below relates to the inhabitants of Robben Island between the ages of 15
to 64.
Working age population
10 000

Formally employed
????

Self employed
2600

Unemployed
???
(Available to work
and have taken
active steps)
Not Available
to work
1300

Not economically
active
1900

Discouraged
workers
???

In the labour force/ economically active

???

4.5 If the strict unemployment is 10%, how many people are;

4.5.1 unemployed?
4.5.2 employed?
unemployed = 0.1x (10 000- 1900) =810
employed = 8100-810= 7290

4.6 Furthermore, use the information to calculate,

4.6.1 the unemployment rate according to the expanded definition?
4.6.2 the labour force?
(i)
the expanded definition unemployment rate=(810+600)/8700 x 100=
16.21%
(ii)
labour force= 8100 +600=8700
[3]

(3)
[3]

(2)
(2)

39

4.7 A windstorm hit Robben Island damaging industrial buildings and leaving 300 people
unemployed. By making use of the AD/AS (short-run) curves show the effect of the
windstorm on the Robben Island economy.
(4)

AS1
CPI/AP/
Price
CPI1
level
CPI0

AS0

GDP
Y1

Y0

GDP

1 mark for

correct labelling
4.8 The government of Robben Island would like to adopt the Socialist ideology, where
income will be shared equally amongst citizens. Draw a Lorenz Curve showing income
distribution of Robben Island after implementing the socialistic ideology.
[2]

Income
percentage

Population percentage
for correct labeling

40

Question 5

[14Marks]

5.2 The table below shows information for Kovsies Commercial Bank.
% cash reserve
requirement ratio
W
8
10

Deposit

Total reserves

Excess reserves

20 000
X
600 000

5500
32 000
1020

0
8000
Z

% cash reserve
requirement ratio
W=27.5%
8
10

Deposit

Actual reserves

Excess reserves

20 000
X=300000
600 000

5500
32 000
1000

0
8000
Z= -59000

Note: the Total Reserves on part three are supposed to be 100 000 instead of 1000. Since it is
an error on our part we should award marks for the impractical Z= -59 000.
3.2 What are the values of W, X and Z in the Table above?

(6)

5.2 Consider the South African rand/ US dollar exchange rate, and focus on the market for
dollar. Using the demand and supply curves, explain whether the dollar would appreciate
or depreciate against the rand, and whether that rand would appreciate or depreciate
against the dollar in the following scenarios:
Hint: Assume US is the only trading partner of South Africa
5.2.4 GM motors a US Company opens a car production plant in Mpumalanga in South
Africa
[4]
S1
S2

Rands
per
dollar

D
Quantity of dollars

Rand appreciates/dollar depreciates

41

5.2.5

Due to a poorly thought economic policy in South Africa, US companies in South

Africa disinvest and move to Mozambique.
[4]

S2

Rands
per
dollar

D
Quantity of dollars

Rand depreciates /dollar appreciates

The End

42