Question

1. The rise in the value of one currency in relation to another is :

1. Depreciation of the currency.
2. An appreciation of the currency.
3. A debasement of the currency.
4. A weakening of the currency.

2. Cyclical unemployment refers to unemployment which occurs

1. Because of the seasonal nature of some industries.
2. As a result of the long term decline of the industry.
3. At particular times of the year.
4. As a result of a temporary drop in aggregate demand resulting in a recession.

3. Which one of the following does NOT represent a key macroeconomic variable?

1. The unemployment rate.
2. Gross Domestic Product (GDP).
3. Income distribution.
4. The population growth rate.

4. A consumer’s real purchasing power refers to:

1. The nominal income level of the consumer.
2. Wage income earned through employment.
3. The maximum volume of goods and services that the consumer can buy.
4. Nominal GDP per capita.

5. A decrease in the rate of interest:

1. Lowers the opportunity cost of money and leads to an increase in the quantity of money demanded.
2. Raises the opportunity cost of money and leads to an increase in the quantity of money demanded.
3. Lowers the opportunity cost of money and leads to a decrease in the quantity of money demanded.
4. Raises the opportunity cost of money and leads to a decrease in the quantity of money demanded.

6. Which of the following is not a legitimate area of intervention by government in a mixed economy?

1. Regulation of the pricing behaviour of monopoly industries.
2. Regulation of price increases that result from changes in patterns of demand and supply in competitive markets.
3. Stabilisation of the economy during periods of cyclical instability.
4. Redistribution of purchasing power via progressive taxation and transfers.

7. Which one of the following is not part of fiscal policy?

1. The budget.
2. The level of taxation.
3. The composition of government expenditure.
4. The stock of money in the economy.

8. South Africa has a comparative (relative) advantage over France in the production of maize if it:

1. Produces maize with fewer material inputs than France.
2. Can match France’s output of maize and have resources left over.
3. Has an absolute advantage over France.
4. Produces maize at a lower opportunity cost than France.

9. . A tariff is:

1. A tax on exported goods.
2. A source of revenue to the exporting nation.
3. A tax on imported goods.
4. A tax on foreign property.

10. People leave the labour force when they:

1. Find employment.
2. Become unemployed.
3. Retire.
4. Work in the informal sector.

Answer 1

1. The rise in the value of a currency with respect to another currency is called appreciation of the currency.

the correct option is (B)

2. Cyclical unemployment refers to a form of unemployment occurs at particular times of the year or business cycle.

the correct option is (C)

3. The key macroeconomic variables are unemployment, inflation and output or GDP. The variable which does not constitute a part of the macroeconomic variable is income distribution because population growth still comes under per capita output.

the correct option is (C)

4. A consumer's purchasing power is the maximum value of goods and services that the consumer can buy.

the correct option is (C)