ECS1601 Oct/Nov 2011 exam paper — questions

🔒 Scan locked

  1. Question 1(i) · National income accounting and GDP · 4 marks

    Provide a definition of the Gross Domestic Product (GDP).Show the full question

  2. Question 1(ii) · National income accounting and GDP · 3 marks

    Provide a definition of inflation.Show the full question

  3. Question 2(i) · Money, banking and the money market · 3 marks

    Using the blank money-market diagram provided (with the vertical and horizontal axes already drawn from the origin O), demonstrate how the equilibrium in the money market would change if the level of income in the economy rises. Make sure that all curves and axes on your diagram are properly labelled.Show the full question

  4. Question 2(ii) · Exchange rates, balance of payments and trade · 3 marks

    Using the blank diagram of the South African foreign exchange market supplied (with axes drawn from the origin O), illustrate what would happen to the exchange rate between the rand and the US dollar if South Africa were to implement import substitution measures. Ensure that your diagram is fully labelled.Show the full question

  5. Question 2(iii) · Fiscal policy, taxation and public finance · 9 marks

    Imagine you are the chief economic advisor to the government of the (fictional) country Mahala, which is currently experiencing demand-pull inflation even though the government's stated goal is to achieve price stability. Using the blank aggregate demand/aggregate supply diagram supplied (axes drawn from the origin O), explain what steps the Mahala government should take to reach its price-stability objective. On the diagram, clearly show any shifts in aggregate demand or aggregate supply and the resulting changes in prices and production caused by the government's actions; this diagram component is worth three (3) of the nine marks. In your written explanation, discuss the instruments of fiscal policy, how each would be applied in this situation, and what effects they would have; this written explanation is worth the remaining six (6) marks.Show the full question

The full Spot Map and the marks by year — and this paper’s scan.