Ema3572 2015 11 Nor

ry
T,JI{AM
*r*t'liltNltr fit H*;rilt*
FACULTY Economic and Management Science

DEPARTMENT Economics
SUBJECT Basic Macroeconomics
SUBJECT CODE EMA3572IEMA2572
DATE NOVEMBER 2015
DURATION 3 hours MARKS 100
REGULAR NOVEMBER EXAMINATIONS

Examiner: Mr. Festus Tangeni KANDENGE (UNAM/ Main Campus)
Examiner: Mr. Sakaria Kalumbu (UNAM/ Main Campus)
Examiner: Professor Roman Grynberg (UNAM/ Main Campus)
Examiner: Mr. Elifas lyambula (UNAM/ Main Campus)
Examiner: Mrs. Msiska, Pachalo (UNAM/Rundu Campus)
Examiner: Mr. Denk, Steven (UNAM/Keetmanshoop Campus)
Examiner: Mr. Stanislaus Motlatla (UNAM/ Main Campus)
Moderator: Dr. J M. Nyambe (UNAM/ Main Campus)
This question paper consists of 6 pages including this cover page

lnstructions
o Read all instructions carefully before you start writing.
o This paper consists of 4 questions.
o Answer all questions.
UNIVERSITY OF NAMIBIA EXAMINATIONS
Question One [20 Marksl
Choose the correct answer
1.1 Gross Domestic Product

Gross domestic product is the total produced within a country in a
given time period.
A) market value of all final and intermediate goods and services

B) market value of all goods and services
C) amount of final and intermediate goods and services
D) market value of all final goods and services
1.2) The functions of money are
A) medium of exchange and the ability to buy goods and services.

B) Medium of exchange, unit of account, and means of payment.
C) pricing, contracts, and means of payment.
D) medium of exchange, unit of account, and store of value.
1.3) A consumption function shows a
A) negative (inverse) relationship between consumption expenditure and saving.

B) positive (direct) relationship between consumption expenditure and price tevet.
C) negative (inverse) relationship between consumption expenditure and disposable
income.
D) positive (direct) relationship between consumption expenditure and disposable
income.
1.4) The government's budget deficit or surptus equals the
A) change in outlays divided by change in revenue.

B) average outlay divided by average revenue.
C) change in revenue minus change in ouilays.
D) total tax revenue minus total government ouflays.
1.5) suppose the economy is in a recession and the centra! Bank lowers the repo
rate.
Then
A) real GDP and the price level will both decrease.

B) real GDP will increase and the price level will decrease.
C) real GDP will decrease and the price level will increase.
D) real GDP and the price levelwill both increase.
1.6) which of the following is one of the central Bank's poricy goals?
A) help the President win reelection

B) exchange rate
C) monetary base
D) price level stability
1.7) The term capital, as used in macroeconomics, refers to
A) the amount of money that someone can invest in a new venture.

B) the amount of money a firm can raise in the stock market.
c) manufactured inputs, including inventories, buildings, machinery, etc.
D) All of the above answers are correct.
1.8) The labor force is the sum of the
A) working-age population and the number of unemployed people.

B) number of employed people and the working-age population.
c) number of employed people and the number of unemproyed peopre.
D) total population and the number of unemployed people.
1.9) The unemployment rate is calculated as 100 times
A) [(labor force) + (population)].

B) [(unemployment) + (population)].
C) [(unemployment) + (labor force)].
D) [(labor force) + (unemployment)].
1.10) Structural unemployment is
A) associated with the normal changing of jobs in a dynamic economy.

B) associated with the general downturns in the economy.
C) associated with the general decline of specific industries.
D) almost always short-term in nature.
1.111The repo rate is the interest rate
A) paid on time deposits,

B) paid on funds banks borrow from other banks.
C) paid on funds that depository institutions borrow from the Central Bank of Namibia.
D) that banks charge their "best" customers.
1.121The money multiplier determines how much
A) real GDP will be expanded given an increase in autonomous investment.

B) the monetary base will be expanded given a change in the quantity of money.
C) the quantity of money will be expanded given a change in the monetary base.
D) money demand will expand given a change in the quantity of money.
1.13) By definition, currency appreciation occurs when
A) the value of all currencies fall relative to gold.

B) the value of one currency falls relative to another currency.
C) the value of one currency rises relative to another currency.
D) the value of all currencies rise relative to gold.
1.141!f the economy is at the natural unemployment rate,
A) real GDP > potential GDP.

B) real GDP < potential GDP.
C) real GDP = potential GDP.
D) All of the above can occur when the economy is at the natural unemployment rate.
1.15) The Great Depression, in which real GDP fell and unemployment rose, can
be characterized as a _.
A) inflationary gap
B) long-run equilibrium
C) recessionary gap
D) full-employment equilibrium
1.16) Equilibrium expenditure is defined as the level of aggregate expenditure

where
A) actual aggregate expenditure equals real GDP.

B) total inventories equal zero.
C) aggregate planned expenditure equals real GDP.
D) spending equals output.
1.171ln the circular flow of economic activity
A) aggregate expenditure measures the dollar value of purchases of factors.

B) aggregate expenditure measures the dollar value of purchases of final goods and
services.
c) aggregate income measures the dollar value of labor resources onry.
D) aggregate expenditure is measured as it moves through the financial markets.
1.18) ln a dynamic, ever-changing economy, the full-emptoyment level of

economic activity will entail some unemployment because
A) some people are inherently lazy.

B) there is both job search and job rationing.
c) job search is lengthened by meager unemployment insurance benefits.
D) All of the above answers are correct.
1.19) An agreement between two governments in which the government of the

exporting country agrees to restrain the volume of its own exports is called a
A) tariff.
B) voluntary export restraint.
C) quota.
D) tax.
1.20l-An increase in education and training
A) increases labor productivity.

B) increases aggregate hours.
C) decreases real GDP growth.
D) increases the employment-to-population ratio.
Question Two [20 Marksl
Assume that Windhoek produces only good X and good Y. The base year is 2010 and
the table below shows the quantities produced and prices:
Good X Good Y
Quantitv Price Quantitv Price
2008 100 N$10.12 30 N$7.00
2009 140 N$13.50 25 N$6.50
2010 200 N$25.70 15 N$16.00
2011 500 N$9.50 70 N$3.50
2012 250 N$45.00 10 N$20.00
2.1) Calculate Windhoek nominal GDP in 2008, 2009, 2010, 2011 and 2012. [S Marks]
2.21 lf 2010 is the base year, calculate Windhoek real GDP in 2008, 2OOg, 2OlO, ZOll
and 2012. [5 Marks]
2.3) Calculate Windhoek GDP deflator in 2008, 2009, 2010, 2011 and 2012. [5 Marks]
2.4) Calculate Windhoek economic groMh rate in 2009, 2010, 2011 and 2012. t5
Marksl
Question Three [35 marksl
Assume S = -il$500m + 0,07Yd; M= 0,09Y; I = N$700m; G = N$650m; X = N$g40m

and t = 0.25Y.
5
3.1 Calculate the total-spending function and equilibrium income. lllustrate this on a
graph. [15 Marks]
3.2 lndicate on the graph the effect of an N$400m increase in investment spending and
comment on the magnitude of change in the equilibrium income relative to the change
-
in investment spending. calculate the new equilibrium income.
[15 Marks]
3.3 Assume the marginal tax changes to F0.30Y. How will this change influence the
total spending curve? lllustrate this on your graph. [5 marksl
Question Four [25 Marksl
The table below gives the cost of basket for the economy of Windhoek. Use the
information to calculate the following;
Year Cost of the Basket / Consumer Expenditure(N$)

2009 N$ 850.00
2010 N$ 950.00
2011 N$ 1,000.00
2012 N$ 1,050.00
4.1 calculate the cPl in each year [use 2010 as the base year]. [10 Marks]
4.2 Calculate the inflation rate in each year. [1S marks]
THE END

Ema3572 2015 11 Nor

Uploaded by

Copyright:

Available Formats

Ema3572 2015 11 Nor

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ema3572 2015 11 Nor

Uploaded by

Copyright:

Available Formats

ry

FACULTY Economic and Management Science

REGULAR NOVEMBER EXAMINATIONS

This question paper consists of 6 pages including this cover page

Choose the correct answer

1.1 Gross Domestic Product

A) market value of all final and intermediate goods and services

1.2) The functions of money are

A) medium of exchange and the ability to buy goods and services.

1.3) A consumption function shows a

A) negative (inverse) relationship between consumption expenditure and saving.

1.4) The government's budget deficit or surptus equals the

A) change in outlays divided by change in revenue.

A) real GDP and the price level will both decrease.

A) help the President win reelection

1.7) The term capital, as used in macroeconomics, refers to

A) the amount of money that someone can invest in a new venture.

1.8) The labor force is the sum of the

A) working-age population and the number of unemployed people.

1.9) The unemployment rate is calculated as 100 times

A) [(labor force) + (population)].

1.10) Structural unemployment is

A) associated with the normal changing of jobs in a dynamic economy.

1.111The repo rate is the interest rate

A) paid on time deposits,

1.121The money multiplier determines how much

A) real GDP will be expanded given an increase in autonomous investment.

1.13) By definition, currency appreciation occurs when

A) the value of all currencies fall relative to gold.

1.141!f the economy is at the natural unemployment rate,

A) real GDP > potential GDP.

1.16) Equilibrium expenditure is defined as the level of aggregate expenditure

A) actual aggregate expenditure equals real GDP.

1.171ln the circular flow of economic activity

A) aggregate expenditure measures the dollar value of purchases of factors.

1.18) ln a dynamic, ever-changing economy, the full-emptoyment level of

A) some people are inherently lazy.

1.19) An agreement between two governments in which the government of the

1.20l-An increase in education and training

A) increases labor productivity.

Question Two [20 Marksl

Question Three [35 marksl

Assume S = -il$500m + 0,07Yd; M= 0,09Y; I = N$700m; G = N$650m; X = N$g40m

Question Four [25 Marksl

Year Cost of the Basket / Consumer Expenditure(N$)

You might also like