UNISA Exam Memo May/June 2011 ECS1601
SECTION A (50 MARKS) QUESTION 1 (9MARKS) (i) (ii) (iii)
(3 marks) the Lorenz curve the Gini coefficient the quantile ratio (3 marks) Spending taxes Transfer payments. (3 marks) Domestic demand (which includes consumption, investment and government spending) Export demand Import substitution
1
QUESTION 2 (9 MARKS) (i)
(3 marks)
(ii)
(3 marks)
2
(iii)
(3 marks)
QUESTION 3 (11 MARKS) (i)
(3 marks)
∆Y =500 (2500 -2000) ∆S = 150 (450 -300) ∆C = ∆Y - ∆S = 500-150 = 350 MPC =
=
=0, 7
3
(ii)
(3 marks)
Ā=Č+Ī 30 =10 + 20 Ā = 30 At equilibrium, I = 20 , C =70 A=C+I =20 + 70 =90 Ye = 90 (iii) (5 marks) The size of the multiplier (2 marks)
α=
(
)
=
(
)
=
( )
the equilibrium level of income (3 marks)
Ā = Č + Ī + Ḡ + Ẋ –Ẑ = 400 + 500 + 1280 + 900 – 600 =2480 Equilibrium income Yo = α x Ā =2 x 2480= 4960 4
=
=
=2
QUESTION 4 (21 MARKS) (i)
(4 marks)
X due to stronger rand;
D for fruit;
D for fruit-pickers;
structural unemployment
(ii)
(3 marks)
Need constant prices (real GDP) to measure real growth in economy;
current prices (nominal GDP) includes inflation and provides a distorted picture of economic growth.
(iii)
(3 marks)
Will increase the size of the multiplier (α) due to less money being spent abroad and more locally;
(iv)
also increase Y
(4 marks)
decrease in Yd (disposable income);
decrease in multiplier;
A-curve becomes flatter;
decrease in Ye
(v)
(5 marks)
AD shifts to the left;
Decrease spending by consumers
Ye decreases ;
P (prices) decreases;
Increase effect in the cost of credit
Decrease borrowing by consumers
(vi)
(2 marks)
Structural unemployment;
Skills development programmes to address mismatch between skills and job requirements.
5
SECTION B (50 MARKS) 1. 4
21. 3
2. 4
22. 1
3. 4
23. 4
4. 2
24. 1
5. 1
25. 4
6. 1
26. 4
7. 1
27. 2
8. 2
28. 3
9. 4
29. 3
10. 2
30. 4
11. 1
31. 1
12. 1
32. 2
13. 2
33. 3
14. 4
34. 4
15. 2
35. 2
16. 1
36. 2
17. 2
37. 3
18. 3
38. 3
19. 3
39. 1
20. 4
40. 4
6
