ECON122 - STUDY - GC - Eng
ECON122 - STUDY - GC - Eng
ECON122 - STUDY - GC - Eng
Requirements for this paper/Benodigdhede vir hierdie vraestel: Other resources/Ander hulpmiddels:
Answer scripts/ Multi-choice cards (A5)/
Antwoordskrifte: X Multikeusekaarte (A5): x
X
Attendance slips (Fill-in paper)/ Multi-choice cards (A4)/
Presensiestrokies (Invulvraestel): Multikeusekaarte (A4):
Scrap paper/ Graph paper/
Rofwerkpapier: Grafiekpapier:
INSTRUCTIONS
• Round all final answers to two decimal places (no rounding in calculation steps).
• Make use of the multiple-choice cards to answer Section A. Also, ensure that you familiarise
yourself with the instructions on the multiple-choice cards.
• Ensure that you hand in your multiple-choice card with your answer sheet.
Question 1 (1)
Question 2 (1)
Which statement of the following is wrong regarding the Reserve Bank? The function of the South African
Reserve Bank is to:
Question 3 (1)
A. Accommodation Policy
B. Open-market operations
Question 5 (1)
A. Decreases.
B. Increases.
C. Stays unchanged.
Question 6 (1)
Which one of the following statements are correct? The function of money is: A.
C. wealth
D. a unit of account.
Question 7 (1)
A justification for government intervention in the economy arises from the fact that market systems usually
produce ________ outcomes, but they do not necessarily produce ________ outcomes.
A. efficient; equitable
B. equitable; efficient
C. efficient; profitable
D. profitable; equitable
Question 8 (1)
Fiscal policy can be best defined as:
C. Policy with regard to the level and composition of government spending, taxation and borrowing.
Question 9 (1)
When the government uses its overdraft facilities at the central bank, it ___________ the quantity of money
in the economy. This is called ___________________ financing.
A. increases; deflationary
B. decreases; inflationary
C. decreases; deflationary
D. increases; inflationary
Question 10 (1)
Which of the following is least likely to be associated with market failure, and is consequently least likely
to require any form of state regulation or intervention?
Question 11 (1)
Question 12 (1)
Regulation of price increases that result from changes in patterns of demand and supply in B.
competitive markets.
Question 13 (1)
Question 14 (1)
If the consumer price index at the end of 2011 was 100 and at the end of 2012 was 120, then the rate of
inflation for 2012 was
A. 25%.
B. 20%
C. 16.66%
D. 1.5%
Question 15 (1)
Which one of the following statements is correct. Inflation tends to: A.
1.2 Draw the demand for money curve and clearly indicate the components of the demand for (2) money
by transactions and speculation motives.
QUESTION 2 [3]
2.1 Draw a graph that illustrates an increase in the money supply according to the traditional (3) approach
and indicate what effect that will have on the interest rates. (Name your curves and axes clearly
and indicate the movement of the money supply and interest rates clearly).
QUESTION 3 [4]
3.1 Differentiate between progressive and proportional tax and provide an example of each. (2)
(2)
3.2 Give two valid reasons for government intervention in the South African economy.
QUESTION 4 [3]
4.1 Draw a graph indicating demand-pull inflation and describe the concept in full referring to
(3) the graph drawn
QUESTION 1 [6]
Suppose Muhammad’s monthly income is R26 700 during the 2022 tax year. Given the following tax bracket,
answer the questions that follow.
1.3 Suppose Muhammad’s monthly income is increased to R40,723, resulting in him paying (2)
R115,754.56 tax. How would you classify this type of tax? Motivate your answer.
QUESTION 2 [3]
2.1 With the use of the information in the table below, calculate the inflation rate for 2022 (3) with the use of
the BBP deflator.
QUESTION 3 [5]
3.1 Determine the comprehensive M3 money supply of Germany when there is R10 mil. worth of (3)
coins and banknotes in circulation, R25 mil. immediate demand deposits at banks, R125
mil. short and medium-term deposits, as well as R290 mil. long-term deposits. Show the
equations that you used and your calculations.
3.2 Using your answer in 3.1. Imagine a very clever computer hacker who managed to steal R50 mil. (2)
of the country’s M2 money supply. How much will the total M3 money supply
now be?
QUESTION 4 [6]
4.1 The inflation rate for all products in July 2021, compared to July 2020. (2)
4.2 The core inflation rate (without food and fuel) in June 2021, compared to June 2020. (2)
4.3 The inflation rate for services July vs June 2021. (2)
Total: 50 marks