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Questions and Answers

Which sector in the circular flow model provides labor and resources, and receives income that is used for consumption, savings, and taxes?

  • Firms
  • Households (correct)
  • Foreign Sector
  • Government

    • What type of flows involve the movement of goods and services in the circular flow model?

  • Factor Flows
  • Real Flows (correct)
  • Financial Flows
  • Money Flows

    • Which market facilitates the trading of currencies necessary for international trade?

  • Goods Market
  • Foreign Exchange Market (correct)
  • Factor Market
  • Financial Market

    • What is the primary function of the government sector in the circular flow model?

    <p>To collect taxes and inject spending into the economy</p> Signup and view all the answers

    What is the term for the total economic output at market prices?

    <p>GDP (Gross Domestic Product)</p> Signup and view all the answers

    Which sector in the circular flow model involves trade activities, where exports add to the economic flow and imports lead to outflows of currency?

    <p>Foreign Sector</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity?

    <p>Multiplier Effect</p> Signup and view all the answers

    Which market deals in resources like labor and capital?

    <p>Factor Market</p> Signup and view all the answers

    What is the primary difference between Gross National Income and other income measures?

    <p>GNI accounts for income earned by a country's residents, adjusting for income received from abroad</p> Signup and view all the answers

    What is the main focus of the Two-Sector Model in the Multiplier Effect?

    <p>Household and firm interactions</p> Signup and view all the answers

    What is the formula for the multiplier in a simple two-sector model?

    <p>k = 1 / (1 - MPC)</p> Signup and view all the answers

    What is the characteristic of the expansion phase of a business cycle?

    <p>Economic indicators show significant growth</p> Signup and view all the answers

    What is the term for the highest point of economic activity in a business cycle?

    <p>Peak</p> Signup and view all the answers

    What is the primary factor influencing business cycles according to the Keynesian Theory?

    <p>Changes in aggregate demand</p> Signup and view all the answers

    What is the primary goal of monetary policy in stabilizing economic activity?

    <p>To curb inflation during booms</p> Signup and view all the answers

    What is the term for the lowest point of a business cycle, marking the end of a recession?

    <p>Trough</p> Signup and view all the answers

    What is the primary focus of the Schumpeterian Theory in explaining business cycles?

    <p>The role of technological innovation</p> Signup and view all the answers

    What is the primary tool used by governments to stabilize economic activity during downturns?

    <p>Fiscal policy</p> Signup and view all the answers

    What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>To meet basic needs, develop human resources, and build the economy</p> Signup and view all the answers

    What is the main difference between economic growth and economic development?

    <p>Economic growth refers to an increase in real GDP, while economic development encompasses improvements in standards of living</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Improving the quality of the labor force through education and training</p> Signup and view all the answers

    What is the main objective of the New Growth Path (NGP) in South Africa?

    <p>To focus on job creation and identify job drivers like infrastructure and agriculture</p> Signup and view all the answers

    What is the primary characteristic of the North/South divide?

    <p>A significant disparity in income levels and economic stability between developed and developing countries</p> Signup and view all the answers

    What is the primary goal of directing government spending towards public goods and services?

    <p>To encourage economic growth and stability</p> Signup and view all the answers

    Which of the following is an example of an export promotion strategy?

    <p>Supporting domestic industries to increase their exports</p> Signup and view all the answers

    What is the primary focus of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>To halve unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    What is the Laffer Curve primarily used to illustrate?

    <p>The optimal tax rate that maximizes revenue without discouraging economic activity</p> Signup and view all the answers

    What is a potential consequence of administered prices?

    <p>Shortages or surpluses, depending on the price level</p> Signup and view all the answers

    What is the main objective of industrial policies in South Africa?

    <p>To increase industrial activity, diversify the economy, and enhance regional development</p> Signup and view all the answers

    What is the primary difference between the demand-side and supply-side approaches to economic growth?

    <p>Demand-side approaches focus on increasing government expenditure, while supply-side approaches focus on improving productivity</p> Signup and view all the answers

    What is the primary argument of the Infant Industry Argument in favor of protectionism?

    <p>To protect emerging domestic industries that are not yet competitive enough to withstand international competition</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment, and Redistribution (GEAR) strategy in South Africa?

    <p>To promote market-led growth, fiscal and monetary discipline, and enhance investor confidence</p> Signup and view all the answers

    What is a potential benefit of free trade, according to the concept of specialization?

    <p>Nations can focus on the production of goods for which they have a comparative advantage</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To increase participation in the global market</p> Signup and view all the answers

    What is a potential drawback of excessive bureaucracy in the public sector?

    <p>Stifling innovation and responsiveness</p> Signup and view all the answers

    What is the primary goal of South Africa's import substitution policies?

    <p>To encourage local production of goods that were previously imported</p> Signup and view all the answers

    What is a potential consequence of information failure in the public sector?

    <p>Inefficient outcomes due to incomplete or inaccurate information</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To manage resources and provide services that are not suitable for private sector delivery</p> Signup and view all the answers

    What is the primary purpose of the Producer Price Index (PPI)?

    <p>To reflect the average movement of selling prices from domestic production over time</p> Signup and view all the answers

    What does the Employment Rate measure?

    <p>The proportion of the Economically Active Population (EAP) that is employed</p> Signup and view all the answers

    What is the term for the value of the South African rand against other currencies?

    <p>Exchange Rate</p> Signup and view all the answers

    Which indicator measures the overall health and longevity of the population?

    <p>Life Expectancy</p> Signup and view all the answers

    What is the purpose of the Repo Rate?

    <p>To set the interest rate at which the South African Reserve Bank lends money to commercial banks</p> Signup and view all the answers

    What do the M1, M2, and M3 aggregates represent?

    <p>Different aggregates of currency in circulation and bank deposits, reflecting the liquidity available in the economy</p> Signup and view all the answers

    What is the purpose of International Comparisons?

    <p>To compare South Africa's performance with that of other countries, highlighting areas of strength and those requiring improvement</p> Signup and view all the answers

    What do Infant and Under-5 Mortality Rates indicate?

    <p>The effectiveness of healthcare systems and the health environment</p> Signup and view all the answers

    What is the purpose of the Economically Active Population (EAP) indicator?

    <p>To represent all persons within the working age group available to supply labor for production</p> Signup and view all the answers

    What do social indicators, such as Education and Health, measure?

    <p>The overall well-being of a population</p> Signup and view all the answers

    What is the primary goal of the National Industrial Policy Framework (NIPF) in South Africa?

    <p>To promote economic diversification and reduce dependence on traditional sectors</p> Signup and view all the answers

    What is the main objective of the Industrial Policy Action Plans (IPAP) in South Africa?

    <p>To implement specific actions to achieve the goals of the NIPF</p> Signup and view all the answers

    Which of the following is a key aspect of South Africa's industrial policies that aligns with international best practices?

    <p>Prioritizing sustainable industrial practices</p> Signup and view all the answers

    What is the primary purpose of Spatial Development Initiatives (SDIs) in South Africa?

    <p>To target underdeveloped areas for infrastructure and industrial development</p> Signup and view all the answers

    What is a key challenge facing South Africa's industrial policies that needs to be addressed?

    <p>Implementation gaps between policy goals and actual outcomes</p> Signup and view all the answers

    Which of the following is an indicator of the effectiveness of South Africa's industrial strategies?

    <p>GDP growth</p> Signup and view all the answers

    What is the primary goal of the National Research and Development Strategy (NRDS) in South Africa?

    <p>To boost innovation across industries</p> Signup and view all the answers

    Which of the following is a key aspect of South Africa's industrial policies that addresses regional disparities?

    <p>Spatial Development Initiatives (SDIs)</p> Signup and view all the answers

    What is the primary objective of the Integrated Manufacturing Strategy (IMS) in South Africa?

    <p>To enhance competitiveness in the manufacturing sector</p> Signup and view all the answers

    Which of the following is a key challenge facing South Africa's industrial policies that affects the workforce?

    <p>Bridging the skills gap in the workforce to meet the demands of new and evolving industries</p> Signup and view all the answers

    What is the primary objective of the New Economic Paradigm?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    Which type of indicator confirms trends that are already in process?

    <p>Lagging Indicator</p> Signup and view all the answers

    What is the primary role of Provincial Governments?

    <p>Managing regional issues</p> Signup and view all the answers

    What is a key challenge faced by the public sector?

    <p>Inefficiency due to lack of clear performance metrics</p> Signup and view all the answers

    What is the primary objective of pricing policy in the public sector?

    <p>To fulfill social responsibilities</p> Signup and view all the answers

    What is a key objective of the public sector?

    <p>Promoting sustainable growth</p> Signup and view all the answers

    What is the Medium-Term Expenditure Framework (MTEF) used for?

    <p>To plan over a three-year period</p> Signup and view all the answers

    What is a fiscal policy instrument used to manage economic activity?

    <p>Taxation</p> Signup and view all the answers

    What is a challenge faced by State-Owned Enterprises (SOEs)?

    <p>Lack of competition and accountability</p> Signup and view all the answers

    What is the primary role of Local Governments?

    <p>Tackling community-specific matters</p> Signup and view all the answers

    What is the primary function of the financial market in the circular flow model?

    <p>Flow of money for goods and services</p> Signup and view all the answers

    What is the term for the total economic output at market prices in a country?

    <p>Gross Domestic Product</p> Signup and view all the answers

    Which sector in the circular flow model injects spending into the economy through public services and infrastructure?

    <p>Government</p> Signup and view all the answers

    What type of flows involve the movement of goods and services in the circular flow model?

    <p>Real Flows</p> Signup and view all the answers

    Which market facilitates the exchange of resources like labor and capital?

    <p>Factor Market</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity?

    <p>Multiplier Effect</p> Signup and view all the answers

    Which sector in the circular flow model involves trade activities, where exports add to the economic flow and imports lead to outflows of currency?

    <p>Foreign Sector</p> Signup and view all the answers

    What does the circular flow model illustrate?

    <p>The movement of money and goods across different sectors of the economy</p> Signup and view all the answers

    What is the primary objective of government spending directed towards public goods and services?

    <p>To promote economic growth and stability</p> Signup and view all the answers

    What is the Laffer Curve primarily used to illustrate?

    <p>The relationship between tax rates and tax revenue</p> Signup and view all the answers

    What is the main argument of the Infant Industry Argument in favor of protectionism?

    <p>To protect domestic industries from foreign competition</p> Signup and view all the answers

    What is a potential consequence of administered prices in the public sector?

    <p>Shortages or surpluses, depending on whether prices are set below or above market equilibrium</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To manage resources and provide services not suitable for private sector delivery</p> Signup and view all the answers

    What is the primary goal of South Africa's import substitution policies?

    <p>To reduce dependency on imports by supporting local industries</p> Signup and view all the answers

    What is a potential drawback of excessive bureaucracy in the public sector?

    <p>Stifling innovation and responsiveness</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To promote economic growth through exports</p> Signup and view all the answers

    What is a potential consequence of information failure in the public sector?

    <p>Inefficient outcomes due to incomplete or inaccurate information</p> Signup and view all the answers

    What is the primary benefit of free trade, according to the concept of specialization?

    <p>Increased economic efficiency through specialization</p> Signup and view all the answers

    What is the primary objective of the New Economic Paradigm?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    What is the primary difference between Gross National Income and other income measures?

    <p>GNI accounts for all income earned by a country's residents, while other income measures do not.</p> Signup and view all the answers

    Which of the following models includes government and foreign transactions in the multiplier effect?

    <p>Four-Sector Model</p> Signup and view all the answers

    Which of the following is an example of a lagging indicator?

    <p>Unemployment rates</p> Signup and view all the answers

    What is the primary characteristic of the contraction phase of a business cycle?

    <p>Decreasing economic indicators, such as GDP and employment</p> Signup and view all the answers

    What is the primary role of the public sector in providing essential services?

    <p>To provide structure and essential services not driven by profit</p> Signup and view all the answers

    According to the Schumpeterian Theory, what is the primary cause of business cycles?

    <p>Technological innovations and their diffusion</p> Signup and view all the answers

    What is the primary challenge faced by the public sector in terms of efficiency?

    <p>Lack of clear performance metrics and accountability</p> Signup and view all the answers

    What is the primary objective of the Medium-Term Expenditure Framework (MTEF)?

    <p>To plan and allocate resources over a three-year period</p> Signup and view all the answers

    What is the primary goal of fiscal policy during times of economic downturn?

    <p>To increase government spending and reduce taxes</p> Signup and view all the answers

    What is the primary goal of fiscal policy in terms of taxation?

    <p>To manage economic activity through adjusting tax rates</p> Signup and view all the answers

    What is the formula for the multiplier in a simple two-sector model?

    <p>k = 1 / (1 - MPC)</p> Signup and view all the answers

    What is the primary focus of the Keynesian Theory in explaining business cycles?

    <p>Changes in aggregate demand and collective behavior of consumers and businesses</p> Signup and view all the answers

    What is the primary purpose of the Laffer Curve?

    <p>To illustrate the relationship between economic growth and taxation</p> Signup and view all the answers

    What is the primary goal of monetary policy in stabilizing economic activity?

    <p>To stabilize the price level and control inflation</p> Signup and view all the answers

    What is the primary challenge faced by State-Owned Enterprises (SOEs)?

    <p>Lack of competition and accountability</p> Signup and view all the answers

    What is the primary goal of the public sector in terms of income distribution?

    <p>To reduce income inequality</p> Signup and view all the answers

    What is the term for the lowest point of a business cycle, marking the end of a recession?

    <p>Trough</p> Signup and view all the answers

    What is the primary factor influencing business cycles according to the Classical and Neoclassical Theories?

    <p>External shocks and normal market processes</p> Signup and view all the answers

    What is the primary focus of forecasting business cycles?

    <p>To understand the phases and factors influencing business cycles</p> Signup and view all the answers

    Which of the following is NOT a justification for South Africa's industrial policies?

    <p>Reducing Inequality</p> Signup and view all the answers

    What is the primary focus of the National Research and Development Strategy (NRDS)?

    <p>Boosting innovation across industries</p> Signup and view all the answers

    What is the main objective of the Integrated Manufacturing Strategy (IMS)?

    <p>Enhancing competitiveness in the manufacturing sector</p> Signup and view all the answers

    What is the primary goal of the Special Economic Zones (SEZs) in South Africa?

    <p>Attracting businesses and stimulating economic activities</p> Signup and view all the answers

    What is the primary focus of South Africa's industrial strategies in terms of alignment with international best practices?

    <p>Governance and Transparency</p> Signup and view all the answers

    What is the primary goal of the Spatial Development Initiatives (SDIs) in South Africa?

    <p>Reducing economic disparities between regions</p> Signup and view all the answers

    What is the primary focus of evaluating South Africa's industrial strategies?

    <p>All of the above</p> Signup and view all the answers

    What is a challenge that needs to be addressed to enhance the effectiveness of South Africa's industrial policies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of the National Industrial Policy Framework (NIPF) in South Africa?

    <p>Guiding the overall industrial strategy of South Africa</p> Signup and view all the answers

    What is the primary focus of the Industrial Policy Action Plans (IPAP) in South Africa?

    <p>Detailing specific actions to implement the NIPF</p> Signup and view all the answers

    Which of the following approaches to economic growth focuses on increasing government expenditure and redistributing income to enhance consumption among lower-income earners?

    <p>Demand-side approach</p> Signup and view all the answers

    What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>To reduce poverty and inequality</p> Signup and view all the answers

    Which of the following is a characteristic of the North/South divide?

    <p>Large disparities in income levels and economic stability between developed and developing countries</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>To halve unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Improving the quality of the labor force</p> Signup and view all the answers

    What is the primary goal of industrial policies in South Africa?

    <p>To diversify the economy and enhance regional development</p> Signup and view all the answers

    What is the primary difference between economic growth and economic development?

    <p>Economic growth focuses on increasing real GDP, while economic development focuses on improving standards of living</p> Signup and view all the answers

    Which of the following is an example of an export promotion strategy?

    <p>Supporting domestic industries to increase their exports</p> Signup and view all the answers

    What is the primary focus of the Growth, Employment, and Redistribution (GEAR) strategy in South Africa?

    <p>To promote economic growth through market-led strategies</p> Signup and view all the answers

    What is the primary goal of the New Growth Path (NGP) in South Africa?

    <p>To focus on job creation and identifying job drivers like infrastructure and agriculture</p> Signup and view all the answers

    What is the primary function of the Producer Price Index (PPI)?

    <p>Reflecting the average movement of selling prices from domestic production over time</p> Signup and view all the answers

    What is the purpose of the Economically Active Population (EAP) indicator?

    <p>To represent all persons within the working age group available to supply labor for production</p> Signup and view all the answers

    What is the primary focus of International Comparisons?

    <p>To gauge South Africa’s progress and alignment with global standards</p> Signup and view all the answers

    What is the purpose of the Repo Rate?

    <p>To set the rate at which the South African Reserve Bank lends money to commercial banks</p> Signup and view all the answers

    What do Infant and Under-5 Mortality Rates indicate?

    <p>The effectiveness of healthcare systems and the overall health environment</p> Signup and view all the answers

    What is the primary purpose of the M1, M2, and M3 aggregates?

    <p>To measure the liquidity available in the economy</p> Signup and view all the answers

    What is the primary goal of Policy Formulation?

    <p>To identify areas needing intervention and evaluate the impact of current policies</p> Signup and view all the answers

    What is the primary focus of Education as a social indicator?

    <p>To impact future workforce skills and economic growth</p> Signup and view all the answers

    What is the primary purpose of the Exchange Rate?

    <p>To influence the value of the South African rand against other currencies</p> Signup and view all the answers

    What is the primary goal of Investment Decisions?

    <p>To assess the economic stability and growth potential of South Africa</p> Signup and view all the answers

    What is the primary function of the foreign sector in the circular flow model?

    <p>To engage in export and import activities, influencing the economic flow</p> Signup and view all the answers

    Which market facilitates the exchange of resources like labor and capital?

    <p>Factor Market</p> Signup and view all the answers

    What is the term for the total economic output at market prices?

    <p>Gross Domestic Product</p> Signup and view all the answers

    What is the multiplier effect capturing in the circular flow model?

    <p>The extent to which additional spending can amplify economic activity</p> Signup and view all the answers

    What is the primary function of the government sector in the circular flow model?

    <p>To inject spending into the economy through public services and infrastructure</p> Signup and view all the answers

    What type of flows involve the exchange of goods and services in the circular flow model?

    <p>Real Flows</p> Signup and view all the answers

    Which sector provides labor and resources, and receives income used for consumption, savings, and taxes?

    <p>Households</p> Signup and view all the answers

    What is the purpose of the financial market in the circular flow model?

    <p>To manage the flow of money and resources within the economy</p> Signup and view all the answers

    Which of the following is a feature of the contraction phase of a business cycle?

    <p>Reduced factory production</p> Signup and view all the answers

    What is the primary goal of fiscal policy in stabilizing economic activity?

    <p>To stimulate economic growth through increased government spending and reduced taxes</p> Signup and view all the answers

    Which of the following theories suggests that business cycles are driven by changes in aggregate demand?

    <p>Keynesian Theory</p> Signup and view all the answers

    What is the term for the marginal propensity to consume in the multiplier formula?

    <p>MPC</p> Signup and view all the answers

    Which of the following is an example of an endogenous factor influencing business cycles?

    <p>Changes in consumer confidence</p> Signup and view all the answers

    What is the term for the highest point of economic activity in a business cycle?

    <p>Peak</p> Signup and view all the answers

    Which of the following is a characteristic of the expansion phase of a business cycle?

    <p>Increased factory production</p> Signup and view all the answers

    What is the primary focus of the Schumpeterian Theory in explaining business cycles?

    <p>The role of technological innovation</p> Signup and view all the answers

    Which of the following is a feature of the multiplier effect?

    <p>It reveals how initial increases in spending lead to a more significant overall increase in economic output</p> Signup and view all the answers

    What is the term for the lowest point of a business cycle, marking the end of a recession?

    <p>Trough</p> Signup and view all the answers

    What is the primary argument in favor of protectionism according to the National Security argument?

    <p>To ensure the self-sufficiency of crucial industries vital for national security</p> Signup and view all the answers

    What is the primary benefit of free trade, according to the concept of specialization?

    <p>Nations can focus on the production of goods for which they have a comparative advantage</p> Signup and view all the answers

    What is the primary goal of South Africa's industrial policies?

    <p>To promote economic diversification and job creation</p> Signup and view all the answers

    What is the primary goal of directing government spending towards public goods and services?

    <p>To promote economic growth and stability</p> Signup and view all the answers

    What is the primary consequence of information failure in the public sector?

    <p>Inefficient outcomes</p> Signup and view all the answers

    What is the main objective of the National Research and Development Strategy (NRDS)?

    <p>To boost innovation across industries</p> Signup and view all the answers

    What is the primary purpose of the Laffer Curve?

    <p>To illustrate the relationship between tax rates and government revenue</p> Signup and view all the answers

    What is the primary goal of the Integrated Manufacturing Strategy (IMS)?

    <p>To enhance competitiveness in the manufacturing sector</p> Signup and view all the answers

    What is the primary goal of South Africa's import substitution policies?

    <p>To encourage local production of goods that were previously imported</p> Signup and view all the answers

    What is the primary goal of Special Economic Zones (SEZs)?

    <p>To offer incentives to attract businesses and stimulate economic activities</p> Signup and view all the answers

    What is the primary goal of the Industrial Policy Action Plans (IPAP)?

    <p>To detail specific actions to implement the National Industrial Policy Framework</p> Signup and view all the answers

    What is the primary drawback of excessive bureaucracy in the public sector?

    <p>Stifling innovation and responsiveness</p> Signup and view all the answers

    What is the primary focus of South Africa's industrial strategies?

    <p>To align with international best practices through governance and transparency</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To provide goods and services that are not suitable for private sector delivery</p> Signup and view all the answers

    What is the primary consequence of administered prices?

    <p>Shortages or surpluses, depending on whether prices are set below or above market equilibrium</p> Signup and view all the answers

    What is the primary goal of regional development initiatives in South Africa?

    <p>To reduce economic disparities between regions</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To encourage local firms to export their goods and increase participation in the global market</p> Signup and view all the answers

    What is the primary challenge facing South Africa's industrial policies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of evaluating South Africa's industrial strategies?

    <p>To determine the impact on GDP growth, employment, investment levels, and technological advancements</p> Signup and view all the answers

    What is the primary benefit of South Africa's industrial policies?

    <p>Economic diversification, job creation, and enhanced competitiveness</p> Signup and view all the answers

    What is the primary focus of South Africa's Reconstruction and Development Programme (RDP)?

    <p>Meeting basic needs, developing human resources, and building the economy</p> Signup and view all the answers

    Which of the following approaches to economic growth focuses on increasing industrial activity, diversifying the economy, and enhancing regional development?

    <p>Industrial development policies</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment, and Redistribution (GEAR) strategy in South Africa?

    <p>Aiming at market-led growth, fiscal and monetary discipline, and enhancing investor confidence</p> Signup and view all the answers

    What is the primary difference between economic growth and economic development?

    <p>Economic growth refers to an increase in real GDP, while economic development refers to improvements in standards of living</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Improving the quality of the labor force through education and training</p> Signup and view all the answers

    What is the primary characteristic of the North/South divide?

    <p>A significant disparity exists between the developed 'North' and the developing 'South' in terms of income levels, economic stability, and access to resources</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Targeting halving unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    What is the primary focus of the New Growth Path (NGP) in South Africa?

    <p>Focusing on job creation and identifying job drivers like infrastructure and agriculture</p> Signup and view all the answers

    What is the primary goal of South Africa's industrial policies?

    <p>Increasing industrial activity, diversifying the economy, and enhancing regional development</p> Signup and view all the answers

    Which of the following is an example of a demand-side approach to economic growth?

    <p>Increasing government expenditure on public goods and services</p> Signup and view all the answers

    What is the primary objective of the New Economic Paradigm in achieving stable growth?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    What type of economic indicators confirm trends that are already in process?

    <p>Lagging indicators</p> Signup and view all the answers

    What is the primary focus of supply-side policies?

    <p>Increasing productivity and efficiency through technological advancements and regulatory reforms</p> Signup and view all the answers

    What is the primary role of State-Owned Enterprises (SOEs)?

    <p>To operate in the public interest and manage resources and services</p> Signup and view all the answers

    What is a common challenge faced by the public sector?

    <p>Inefficiency due to lack of clear performance metrics and accountability</p> Signup and view all the answers

    What is the primary objective of the Medium-Term Expenditure Framework (MTEF)?

    <p>To plan public sector expenditure over a three-year period</p> Signup and view all the answers

    What is the primary focus of fiscal policy instruments?

    <p>Adjusting tax rates to manage economic activity</p> Signup and view all the answers

    What is the primary goal of understanding and analyzing business cycles?

    <p>To capitalize on periods of economic growth and mitigate the adverse effects of downturns</p> Signup and view all the answers

    What is the primary objective of the public sector?

    <p>To provide structure and essential services that are not profit-driven</p> Signup and view all the answers

    What is the primary focus of the Laffer Curve?

    <p>To illustrate the relationship between taxation and economic growth</p> Signup and view all the answers

    Which of the following indicators is used to track changes in population size and its impact on demand for goods and services?

    <p>Population Growth</p> Signup and view all the answers

    What is the primary purpose of the Terms of Trade indicator?

    <p>To compare the rate of export prices to import prices</p> Signup and view all the answers

    Which indicator is used to evaluate the government's ability to provide adequate housing?

    <p>Housing Development</p> Signup and view all the answers

    What is the primary purpose of the Producer Price Index (PPI)?

    <p>To reflect the average movement of selling prices from domestic production</p> Signup and view all the answers

    Which indicator measures the proportion of the Economically Active Population (EAP) that is employed?

    <p>Employment Rate</p> Signup and view all the answers

    What is the primary purpose of International Comparisons?

    <p>To gauge South Africa's progress and alignment with global standards</p> Signup and view all the answers

    Which indicator reflects the government's commitment to improving education?

    <p>Public Spending on Education</p> Signup and view all the answers

    What is the primary purpose of the Repo Rate?

    <p>To influence other interest rates across the economy</p> Signup and view all the answers

    Which indicator measures the percentage of the labor force that is unemployed but actively seeking employment?

    <p>Unemployment Rate</p> Signup and view all the answers

    What is the primary purpose of the M1, M2, and M3 aggregates?

    <p>To reflect the liquidity available in the economy</p> Signup and view all the answers

    What is the primary role of the foreign sector in the circular flow model?

    <p>To facilitate international trade activities, including exports and imports</p> Signup and view all the answers

    Which of the following markets deals in resources like labor and capital?

    <p>Factor Market</p> Signup and view all the answers

    What is the term for the total economic output at market prices?

    <p>Gross Domestic Product</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity?

    <p>Mutliplier Effect</p> Signup and view all the answers

    Which sector in the circular flow model utilizes labor and resources to produce goods and services?

    <p>Firms</p> Signup and view all the answers

    What is the primary function of the government sector in the circular flow model?

    <p>To collect taxes and inject spending into the economy</p> Signup and view all the answers

    What is the primary difference between real flows and money flows in the circular flow model?

    <p>Real flows involve the movement of goods and services, while money flows involve financial transactions.</p> Signup and view all the answers

    What is the primary purpose of the markets in the circular flow model?

    <p>To facilitate the exchange of goods and services among households, firms, government, and foreign sector</p> Signup and view all the answers

    What is the primary reason why the Multiplier Effect is significant in understanding economic output?

    <p>It reveals the extent to which additional spending can amplify economic activity</p> Signup and view all the answers

    Which of the following is a characteristic of the contraction phase of a business cycle?

    <p>Businesses start to slow down production and reduce workforce</p> Signup and view all the answers

    What is the primary goal of the New Economic Paradigm?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    What type of economic indicator confirms trends that are already in process?

    <p>Lagging indicators</p> Signup and view all the answers

    What is the primary goal of directing government spending towards public goods and services?

    <p>To promote social welfare and stability</p> Signup and view all the answers

    What is the primary role of Fiscal Policy in stabilizing economic activity?

    <p>To influence aggregate demand through government spending and taxation</p> Signup and view all the answers

    What is the primary argument of the Infant Industry Argument in favor of protectionism?

    <p>To protect emerging domestic industries from foreign competition</p> Signup and view all the answers

    What is the primary role of the public sector?

    <p>To provide essential services that are not profit-driven</p> Signup and view all the answers

    Which of the following is an example of an endogenous factor influencing business cycles?

    <p>Changes in consumer confidence and technological innovations</p> Signup and view all the answers

    What is the primary characteristic of free trade?

    <p>Promoting the unrestricted exchange of goods and services across borders</p> Signup and view all the answers

    What is the primary objective of fiscal policy instruments?

    <p>To regulate aggregate demand</p> Signup and view all the answers

    What is the primary focus of the Classical and Neoclassical Theories of business cycles?

    <p>The influence of external shocks and normal market processes</p> Signup and view all the answers

    Which of the following is a critical point in a business cycle?

    <p>The peak, which marks the highest point of economic activity</p> Signup and view all the answers

    What is the primary challenge facing the public sector?

    <p>Inefficiency due to lack of clear performance metrics and accountability</p> Signup and view all the answers

    What is the primary drawback of administered prices?

    <p>They lead to shortages or surpluses, depending on the price set</p> Signup and view all the answers

    What is the primary difference between Gross National Income and other income measures?

    <p>GNI accounts for all income earned by a country's residents, adjusting for income received from abroad</p> Signup and view all the answers

    What is the primary goal of South Africa's import substitution policies?

    <p>To reduce dependence on foreign goods by promoting local production</p> Signup and view all the answers

    What is the primary goal of the Medium-Term Expenditure Framework (MTEF)?

    <p>To allocate resources over a three-year period</p> Signup and view all the answers

    What is the primary goal of Monetary Policy in stabilizing economic activity?

    <p>To regulate the money supply and interest rates to stabilize economic activity</p> Signup and view all the answers

    What is the primary consequence of information failure in the public sector?

    <p>Inefficient allocation of resources</p> Signup and view all the answers

    What is the primary goal of the Laffer Curve?

    <p>To illustrate the relationship between tax rates and economic growth</p> Signup and view all the answers

    Which of the following is a characteristic of the Schumpeterian Theory of business cycles?

    <p>It focuses on the role of technological innovation in causing business cycles</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To provide public goods and services that are not suitable for private sector delivery</p> Signup and view all the answers

    What is the primary objective of the public sector's economic growth strategy?

    <p>To promote sustainable growth through sectoral supports</p> Signup and view all the answers

    What is the primary challenge facing state-owned enterprises (SOEs)?

    <p>Inefficiency due to lack of competition and accountability</p> Signup and view all the answers

    What is the primary goal of Fiscal Policy during times of economic downturn?

    <p>To reduce government spending and lower taxes to stimulate economic activity</p> Signup and view all the answers

    What is the primary goal of the Laffer Curve?

    <p>To illustrate the relationship between tax rates and government revenue</p> Signup and view all the answers

    What is the primary goal of forecasting business cycles?

    <p>To predict future economic activity through extrapolation</p> Signup and view all the answers

    What is the primary argument for protectionism?

    <p>To protect local businesses and jobs from foreign competition</p> Signup and view all the answers

    What is the primary benefit of free trade, according to the concept of specialization?

    <p>Nations can focus on producing goods for which they have a comparative advantage</p> Signup and view all the answers

    What is the primary difference between economic growth and economic development?

    <p>Economic growth is a narrow concept, while economic development is a broader concept that includes economic growth, standards of living, and income equity.</p> Signup and view all the answers

    Which of the following approaches is associated with the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Demand-side approach</p> Signup and view all the answers

    What is the primary goal of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Halving poverty and unemployment by 2020</p> Signup and view all the answers

    Which of the following is a characteristic of the North/South divide?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of industrial policies in South Africa?

    <p>Promoting economic growth and sustainable development</p> Signup and view all the answers

    What is the primary difference between the demand-side and supply-side approaches to economic growth?

    <p>Demand-side approach focuses on increasing government expenditure, while supply-side approach focuses on improving productivity</p> Signup and view all the answers

    Which of the following is an example of an export promotion strategy?

    <p>Supporting domestic industries to increase their exports</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment, and Redistribution (GEAR) strategy in South Africa?

    <p>Aiming at market-led growth, fiscal and monetary discipline, and enhancing investor confidence</p> Signup and view all the answers

    What is the primary focus of South Africa's industrial policies?

    <p>Promoting industrial development and diversifying the economy</p> Signup and view all the answers

    What is the primary goal of the New Growth Path (NGP) in South Africa?

    <p>Focus on job creation and identifying job drivers</p> Signup and view all the answers

    What is the primary goal of the National Research and Development Strategy (NRDS) in South Africa?

    <p>To boost innovation across industries</p> Signup and view all the answers

    What is the main objective of the Integrated Manufacturing Strategy (IMS) in South Africa?

    <p>To enhance competitiveness in the manufacturing sector</p> Signup and view all the answers

    What is the primary justification for South Africa's industrial policies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of the Special Economic Zones (SEZs) in South Africa?

    <p>To offer incentives to attract businesses and stimulate economic activities</p> Signup and view all the answers

    What is the primary focus of the evaluation of South Africa's industrial strategies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary challenge facing South Africa's industrial policies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of the Spatial Development Initiatives (SDIs) in South Africa?

    <p>To target underdeveloped areas for infrastructure and industrial development</p> Signup and view all the answers

    What is the primary focus of the Industrial Development Zones (IDZs) and Special Economic Zones (SEZs) in South Africa?

    <p>To offer incentives like tax breaks and infrastructure support to attract investments</p> Signup and view all the answers

    What is the primary goal of South Africa's industrial policies in terms of regional development?

    <p>To reduce economic disparities between regions</p> Signup and view all the answers

    What is the primary goal of the governance and transparency aspect of South Africa's industrial policies?

    <p>To ensure accountability and transparency in policy implementation</p> Signup and view all the answers

    What is the primary function of the Consumer Price Index (CPI)?

    <p>Measuring the average price change over time of goods and services purchased by households</p> Signup and view all the answers

    What is the primary difference between the Unemployment Rate and the Employment Rate?

    <p>The Unemployment Rate measures the percentage of the labor force that is unemployed but actively seeking employment, while the Employment Rate measures the proportion of the EAP that is employed</p> Signup and view all the answers

    What is the primary purpose of the Terms of Trade?

    <p>Comparing the rate of export prices to import prices</p> Signup and view all the answers

    What is the primary impact of the Repo Rate on the economy?

    <p>It influences other interest rates across the economy</p> Signup and view all the answers

    What do the M1, M2, and M3 aggregates represent?

    <p>Various aggregates that include currency in circulation and different types of bank deposits</p> Signup and view all the answers

    What is the primary purpose of International Comparisons?

    <p>To compare the performance of South Africa's economy with that of other countries</p> Signup and view all the answers

    What do Infant and Under-5 Mortality Rates indicate?

    <p>The effectiveness of healthcare systems and the health environment</p> Signup and view all the answers

    What is the primary purpose of the Employment Rate indicator?

    <p>To measure the proportion of the Economically Active Population (EAP) that is employed</p> Signup and view all the answers

    What is the primary goal of using economic and social indicators in policymaking?

    <p>To identify areas needing intervention and evaluate the impact of current policies</p> Signup and view all the answers

    What is the primary purpose of the Life Expectancy indicator?

    <p>To measure the overall health and longevity of the population</p> Signup and view all the answers

    What is the primary function of the foreign sector in the circular flow model?

    <p>To facilitate trade activities, where exports add to the economic flow and imports lead to outflows of currency</p> Signup and view all the answers

    Which of the following markets facilitates the trading of currencies necessary for international trade?

    <p>Foreign Exchange Market</p> Signup and view all the answers

    What is the term for the total economic output at market prices?

    <p>Gross Domestic Product</p> Signup and view all the answers

    What is the primary function of households in the circular flow model?

    <p>To provide labor and resources, receiving income for consumption, savings, and taxes</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity?

    <p>Multiplier Effect</p> Signup and view all the answers

    What is the primary characteristic of the goods market?

    <p>Trades consumer goods and services</p> Signup and view all the answers

    What is the primary function of the government sector in the circular flow model?

    <p>To collect taxes and inject spending into the economy</p> Signup and view all the answers

    What is the primary difference between the circular flow model in an open economy and a closed economy?

    <p>Presence of the foreign sector</p> Signup and view all the answers

    In the Multiplier Effect, what determines the increase in economic output?

    <p>Marginal Propensity to Consume</p> Signup and view all the answers

    What is the term for the highest point of economic activity in a business cycle?

    <p>Peak</p> Signup and view all the answers

    According to the Keynesian Theory, what drives business cycles?

    <p>Changes in aggregate demand</p> Signup and view all the answers

    What is the primary goal of monetary policy?

    <p>To stabilize economic activity</p> Signup and view all the answers

    Which approach focuses on the role of technological innovation in causing business cycles?

    <p>Schumpeterian Theory</p> Signup and view all the answers

    What is the term for the overall increase in economic output resulting from an initial increase in spending?

    <p>Multiplier Effect</p> Signup and view all the answers

    Which phase of the business cycle is marked by a decrease in economic activity?

    <p>Contraction</p> Signup and view all the answers

    What is the term for the lowest point of a business cycle?

    <p>Trough</p> Signup and view all the answers

    According to the Classical and Neoclassical Theories, what drives business cycles?

    <p>External shocks</p> Signup and view all the answers

    What is the primary goal of fiscal policy during an economic downturn?

    <p>To stimulate economic activity</p> Signup and view all the answers

    What is the primary goal of directing government spending towards public goods and services?

    <p>To encourage economic growth and stability</p> Signup and view all the answers

    What is the Laffer Curve primarily used to illustrate?

    <p>The relationship between tax rates and tax revenue</p> Signup and view all the answers

    What is a potential consequence of administered prices?

    <p>Shortages or surpluses, depending on whether prices are set below or above market equilibrium</p> Signup and view all the answers

    What is the primary argument of the Infant Industry Argument in favor of protectionism?

    <p>To support emerging domestic industries that are not yet competitive enough to withstand international competition</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To encourage local firms to export their goods, thereby increasing participation in the global market</p> Signup and view all the answers

    What is a potential drawback of excessive bureaucracy in the public sector?

    <p>Reduced innovation and responsiveness, stifling economic growth</p> Signup and view all the answers

    What is the primary goal of South Africa's import substitution policies?

    <p>To encourage local production of goods that were previously imported to strengthen domestic industries and reduce dependency on foreign goods</p> Signup and view all the answers

    What is a potential consequence of information failure in the public sector?

    <p>Decisions may be based on incomplete or inaccurate information, leading to inefficient outcomes</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To provide public goods and services that are not suitable for private sector delivery</p> Signup and view all the answers

    What is the primary benefit of free trade, according to the concept of specialization?

    <p>Nations can focus on the production of goods for which they have a comparative advantage</p> Signup and view all the answers

    What is the primary objective of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs, developing human resources, and building the economy</p> Signup and view all the answers

    Which of the following approaches is MOST likely to lead to sustainable income redistribution in South Africa?

    <p>Supply-side approach, emphasizing education and training</p> Signup and view all the answers

    What is the primary difference between the Growth, Employment, and Redistribution (GEAR) strategy and the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>GEAR focuses on market-led growth, while Asgi-SA targets halving unemployment and poverty</p> Signup and view all the answers

    What is the primary objective of South Africa's industrial policies?

    <p>Increasing industrial activity, diversifying the economy, and enhancing regional development</p> Signup and view all the answers

    What is the primary characteristic of the North/South divide?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of the New Growth Path (NGP) in South Africa?

    <p>Halving unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Improving the quality of the labor force through education and training</p> Signup and view all the answers

    What is the primary difference between economic growth and economic development?

    <p>Economic growth refers to an increase in real GDP, while economic development refers to improvements in standards of living and income equity</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>Supporting domestic industries to increase their exports and enhance economic growth</p> Signup and view all the answers

    What is the primary focus of South Africa's industrial development policies?

    <p>Increasing industrial activity, diversifying the economy, and enhancing regional development</p> Signup and view all the answers

    What is the primary goal of the National Research and Development Strategy (NRDS) in South Africa?

    <p>Boosting innovation across industries</p> Signup and view all the answers

    What is the main objective of the Integrated Manufacturing Strategy (IMS) in South Africa?

    <p>Enhancing competitiveness in the manufacturing sector</p> Signup and view all the answers

    What is the primary goal of the Special Economic Zones (SEZs) in South Africa?

    <p>Offering incentives to attract businesses</p> Signup and view all the answers

    What is the primary justification for South Africa's industrial policies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of Spatial Development Initiatives (SDIs) in South Africa?

    <p>Targeting underdeveloped areas for infrastructure development</p> Signup and view all the answers

    What is the primary evaluation criterion for South Africa's industrial strategies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary challenge facing South Africa's industrial policies?

    <p>Implementation gaps and resource allocation</p> Signup and view all the answers

    What is the primary goal of the Industrial Development Zones (IDZs) in South Africa?

    <p>Offering incentives to attract businesses</p> Signup and view all the answers

    What is the primary characteristic of South Africa's industrial policies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of the National Industrial Policy Framework (NIPF) in South Africa?

    <p>Guiding the overall industrial strategy</p> Signup and view all the answers

    What is the primary objective of the New Economic Paradigm?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    What is the main difference between leading, lagging, and coincident indicators?

    <p>Leading indicators predict future economic activity, lagging indicators confirm trends, and coincident indicators move with the economy</p> Signup and view all the answers

    What is the primary goal of supply-side policies?

    <p>To increase productivity and efficiency through technological advancements, regulatory reforms, and incentives for industries</p> Signup and view all the answers

    What is the primary role of the public sector?

    <p>To provide structure and essential services that are not profit-driven</p> Signup and view all the answers

    What is the primary challenge faced by the public sector?

    <p>Accountability issues and inefficiency due to lack of clear performance metrics</p> Signup and view all the answers

    What is the primary objective of the Medium-Term Expenditure Framework (MTEF)?

    <p>To plan over a medium-term period, allowing for more predictable and strategic allocation of resources</p> Signup and view all the answers

    What is the primary goal of fiscal policy?

    <p>To regulate aggregate demand through fiscal stimuli or monetary adjustments</p> Signup and view all the answers

    What is the primary purpose of taxation as a fiscal policy instrument?

    <p>To regulate aggregate demand and manage economic cycles</p> Signup and view all the answers

    What is the Laffer Curve primarily used to illustrate?

    <p>The relationship between taxation and government revenue</p> Signup and view all the answers

    What is the primary goal of the public sector's pricing policy?

    <p>To fulfill social responsibilities rather than maximizing revenue</p> Signup and view all the answers

    What is the primary purpose of the Producer Price Index (PPI)?

    <p>To reflect the average movement of selling prices from domestic production over time</p> Signup and view all the answers

    What does the Economically Active Population (EAP) represent?

    <p>All persons within the working age group (15-65 years) available to supply labor for production</p> Signup and view all the answers

    What is the purpose of the Repo Rate?

    <p>To influence other interest rates across the economy</p> Signup and view all the answers

    What do Infant and Under-5 Mortality Rates indicate?

    <p>Indicators of the health environment and effectiveness of healthcare systems</p> Signup and view all the answers

    What do the M1, M2, and M3 aggregates represent?

    <p>Various aggregates that include currency in circulation and different types of bank deposits</p> Signup and view all the answers

    What is the primary purpose of International Comparisons?

    <p>To understand how South Africa compares to other nations</p> Signup and view all the answers

    What is the term for the value of the South African rand against other currencies?

    <p>Exchange Rate</p> Signup and view all the answers

    What is the primary goal of policy formulation using economic and social indicators?

    <p>To identify areas needing intervention and evaluate the impact of current policies</p> Signup and view all the answers

    What is the primary focus of social indicators such as Education and Health?

    <p>To measure the overall health and longevity of the population and the effectiveness of healthcare systems</p> Signup and view all the answers

    What is the primary goal of using economic and social indicators for investment decisions?

    <p>To assess the economic stability and growth potential of South Africa</p> Signup and view all the answers

    Which sector in the circular flow model utilizes labor and resources to produce goods and services?

    <p>Firms</p> Signup and view all the answers

    What type of flows represent the financial transactions for goods and services in the circular flow model?

    <p>Money Flows</p> Signup and view all the answers

    Which market facilitates the trading of goods and services?

    <p>Goods Market</p> Signup and view all the answers

    What is the term for the total economic output at market prices?

    <p>Gross Domestic Product (GDP)</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity in an economy?

    <p>Multiplier Effect</p> Signup and view all the answers

    Which sector in the circular flow model collects taxes and injects spending into the economy through public services and infrastructure?

    <p>Government</p> Signup and view all the answers

    What type of market deals in resources like labor and capital?

    <p>Factor Market</p> Signup and view all the answers

    Which sector in the circular flow model involves trade activities, where exports add to the economic flow and imports lead to outflows of currency?

    <p>Foreign Sector</p> Signup and view all the answers

    What is the main difference between Gross National Income and other income measures?

    <p>GNI accounts for all income earned by a country's residents, adjusting for income received from abroad.</p> Signup and view all the answers

    What is the formula for the multiplier in a simple two-sector model?

    <p>k = 1 / (1 - MPC)</p> Signup and view all the answers

    Which theory explains business cycles as driven by changes in aggregate demand influenced by collective behavior of consumers and businesses?

    <p>Keynesian Theory</p> Signup and view all the answers

    What is the primary goal of monetary policy in stabilizing economic activity?

    <p>To stabilize economic activity</p> Signup and view all the answers

    What is the term for the highest point of economic activity in a business cycle?

    <p>Peak</p> Signup and view all the answers

    What is the term for the lowest point of a business cycle, marking the end of a recession?

    <p>Trough</p> Signup and view all the answers

    Which model focuses on household and firm interactions, with spending adjustments influenced by the Marginal Propensities to Consume and Save?

    <p>Two-Sector Model</p> Signup and view all the answers

    What is the primary difference between the expansion and contraction phases of a business cycle?

    <p>Expansion has increasing economic activity, while contraction has decreasing economic activity</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity?

    <p>Multiplier Effect</p> Signup and view all the answers

    What is the primary focus of the Schumpeterian Theory in explaining business cycles?

    <p>The role of technological innovation</p> Signup and view all the answers

    What is the primary goal of the New Economic Paradigm?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    Which of the following indicators is used to predict future economic activity?

    <p>Leading Indicators</p> Signup and view all the answers

    What is the primary role of the public sector in providing essential services?

    <p>To provide structure and essential services that are not profit-driven</p> Signup and view all the answers

    What is the primary challenge faced by the public sector in service delivery?

    <p>Lack of clear performance metrics and accountability</p> Signup and view all the answers

    What is the primary objective of the Medium-Term Expenditure Framework (MTEF) in the public sector?

    <p>To plan over a three-year period for more predictable and strategic allocation of resources</p> Signup and view all the answers

    Which of the following is a fiscal policy instrument used to manage economic activity?

    <p>Taxation</p> Signup and view all the answers

    What is the primary goal of forecasting business cycles?

    <p>To mitigate the adverse effects of downturns and capitalize on periods of growth</p> Signup and view all the answers

    What is the primary focus of supply-side policies?

    <p>Increasing productivity and efficiency through technological advancements</p> Signup and view all the answers

    What is the primary challenge faced by State-Owned Enterprises (SOEs)?

    <p>Lack of competition and accountability</p> Signup and view all the answers

    What is the primary objective of the public sector in providing essential services?

    <p>To provide structure and essential services that are not profit-driven</p> Signup and view all the answers

    What is the primary argument in favor of protectionism, as stated in the Infant Industry Argument?

    <p>Protecting emerging domestic industries that are not yet competitive enough to withstand international competition.</p> Signup and view all the answers

    What is the primary goal of directing government spending towards public goods and services?

    <p>To promote economic growth and stability.</p> Signup and view all the answers

    What is the primary benefit of free trade, according to the concept of specialization?

    <p>Nations can focus on the production of goods for which they have a comparative advantage.</p> Signup and view all the answers

    What is the primary consequence of administered prices in the public sector?

    <p>Inefficient allocation of resources and distorted market operations.</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To provide essential services and manage resources.</p> Signup and view all the answers

    What is the primary goal of the export promotion policies in South Africa?

    <p>To encourage local firms to export their goods and increase participation in the global market.</p> Signup and view all the answers

    What is the primary drawback of excessive bureaucracy in the public sector?

    <p>It can stifle innovation and responsiveness in the public sector.</p> Signup and view all the answers

    What is the primary goal of the import substitution policies in South Africa?

    <p>To encourage local production of goods that were previously imported.</p> Signup and view all the answers

    What is the primary consequence of information failure in the public sector?

    <p>Decisions may be based on incomplete or inaccurate information, leading to inefficient outcomes.</p> Signup and view all the answers

    What is the primary goal of the Laffer Curve?

    <p>To illustrate the relationship between tax rates and tax revenue.</p> Signup and view all the answers

    What is the primary argument in favor of free trade, according to the concept of economic efficiency?

    <p>It promotes more efficient allocation of resources globally, enhancing productivity and innovation.</p> Signup and view all the answers

    What does the Consumer Price Index (CPI) measure?

    <p>The average price change over time of goods and services purchased by households</p> Signup and view all the answers

    What is the purpose of the Repo Rate?

    <p>To influence other interest rates across the economy</p> Signup and view all the answers

    What do the M1, M2, and M3 aggregates represent?

    <p>Various aggregates that include currency in circulation and different types of bank deposits</p> Signup and view all the answers

    What do Infant and Under-5 Mortality Rates indicate?

    <p>The health environment and effectiveness of healthcare systems</p> Signup and view all the answers

    What is the primary purpose of International Comparisons?

    <p>To compare South Africa’s performance with that of other countries</p> Signup and view all the answers

    What is the purpose of the Economically Active Population (EAP) indicator?

    <p>To represent all persons within the working age group available to supply labor for production</p> Signup and view all the answers

    What is the term for the value of the South African rand against other currencies?

    <p>Exchange Rate</p> Signup and view all the answers

    What do social indicators, such as Education and Health, measure?

    <p>The health environment and effectiveness of healthcare systems</p> Signup and view all the answers

    What is the purpose of the Terms of Trade?

    <p>To compare the rate of export prices to import prices</p> Signup and view all the answers

    What is the purpose of the Employment Rate?

    <p>To represent the proportion of the Economically Active Population that is employed</p> Signup and view all the answers

    What is the primary objective of the National Research and Development Strategy (NRDS) in South Africa?

    <p>To boost innovation across industries</p> Signup and view all the answers

    What is the main focus of Spatial Development Initiatives (SDIs) in South Africa's industrial policy?

    <p>To target underdeveloped areas for infrastructure and industrial development</p> Signup and view all the answers

    What is the primary justification for South Africa's industrial policies?

    <p>To promote economic diversification and job creation</p> Signup and view all the answers

    What is the primary goal of South Africa's industrial strategies in terms of alignment with international best practices?

    <p>To ensure governance and transparency in policy implementation</p> Signup and view all the answers

    What is the primary focus of evaluating the effectiveness of South Africa's industrial strategies?

    <p>All of the above</p> Signup and view all the answers

    What is the primary challenge facing South Africa's industrial policies in terms of implementation?

    <p>Implementation gaps and skills development</p> Signup and view all the answers

    What is the primary objective of the Integrated Manufacturing Strategy (IMS) in South Africa?

    <p>To enhance competitiveness in the manufacturing sector</p> Signup and view all the answers

    What is the primary goal of Special Economic Zones (SEZs) in South Africa's industrial policy?

    <p>To attract businesses and stimulate economic activities through incentives</p> Signup and view all the answers

    What is the primary focus of Industrial Development Zones (IDZs) and Special Economic Zones (SEZs) in South Africa's industrial policy?

    <p>To offer incentives like tax breaks and infrastructure support to attract investments</p> Signup and view all the answers

    What is the primary goal of South Africa's regional development initiatives in terms of industrial policy?

    <p>To reduce regional disparities through industrial activities</p> Signup and view all the answers

    What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>To democratize state and society while meeting basic needs</p> Signup and view all the answers

    What is the main difference between economic growth and economic development?

    <p>Economic growth refers to an increase in real GDP, while economic development includes improvements in standards of living</p> Signup and view all the answers

    What is the primary goal of the New Growth Path (NGP) in South Africa?

    <p>To halve unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    What is the primary characteristic of the North/South divide?

    <p>A significant disparity exists between the developed 'North' and the developing 'South' in terms of income levels and economic stability</p> Signup and view all the answers

    Which approach to economic growth focuses on improving the quality of the labor force, managing natural resources, accumulating capital goods, and encouraging entrepreneurship?

    <p>Supply-side approach</p> Signup and view all the answers

    What is the primary goal of South Africa's industrial policies?

    <p>To diversify the economy and enhance regional development</p> Signup and view all the answers

    What is the primary objective of the Growth, Employment, and Redistribution (GEAR) strategy in South Africa?

    <p>To achieve market-led growth, fiscal and monetary discipline, and enhance investor confidence</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To support domestic industries to increase their exports</p> Signup and view all the answers

    What is the primary focus of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>To halve unemployment and poverty by improving average economic growth</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Improving the quality of the labor force</p> Signup and view all the answers

    What is the primary function of the foreign sector in the circular flow model?

    <p>To facilitate trade activities and handle exports and imports</p> Signup and view all the answers

    What is the term for the total economic output at market prices?

    <p>Gross Domestic Product (GDP)</p> Signup and view all the answers

    What is the primary function of the financial market in the circular flow model?

    <p>To manage the flow of money, including savings and investments</p> Signup and view all the answers

    What is the term for the movement of goods and services in the circular flow model?

    <p>Real Flows</p> Signup and view all the answers

    What is the primary function of the government sector in the circular flow model?

    <p>To collect taxes and inject spending into the economy</p> Signup and view all the answers

    What is the term for the extent to which additional spending can amplify economic activity?

    <p>The Multiplier Effect</p> Signup and view all the answers

    What is the primary function of the goods market in the circular flow model?

    <p>To trade consumer goods and services</p> Signup and view all the answers

    What is the term for the market that deals in resources like labor and capital?

    <p>Factor Market</p> Signup and view all the answers

    What is the primary purpose of directing government spending towards public goods and services?

    <p>To encourage economic growth and stability</p> Signup and view all the answers

    Which of the following is an argument in favor of protectionism?

    <p>Reducing import dependency</p> Signup and view all the answers

    What is a potential consequence of information failure in the public sector?

    <p>Inefficient outcomes</p> Signup and view all the answers

    What is the primary goal of South Africa's import substitution policies?

    <p>To reduce import dependency</p> Signup and view all the answers

    What is a potential drawback of excessive bureaucracy in the public sector?

    <p>Stifling innovation and responsiveness</p> Signup and view all the answers

    What is the primary goal of the Laffer Curve?

    <p>To illustrate the relationship between tax rates and tax revenue</p> Signup and view all the answers

    What is a benefit of free trade, according to the concept of specialization?

    <p>Nations can focus on producing goods for which they have a comparative advantage</p> Signup and view all the answers

    What is a potential consequence of administered prices?

    <p>Shortages or surpluses</p> Signup and view all the answers

    What is the primary role of the public sector in South Africa?

    <p>To manage resources and provide public goods and services</p> Signup and view all the answers

    What is an argument for protectionism?

    <p>Protecting emerging domestic industries</p> Signup and view all the answers

    What is the primary purpose of adjusting for income received from abroad in Gross National Income (GNI) calculations?

    <p>To include income earned by citizens abroad</p> Signup and view all the answers

    Which of the following models would be most suitable for analyzing the impact of government spending on economic activity?

    <p>Four-Sector Model</p> Signup and view all the answers

    What is the primary factor that determines the magnitude of the multiplier effect in a two-sector model?

    <p>Marginal Propensity to Consume (MPC)</p> Signup and view all the answers

    What is the primary characteristic of the contraction phase of a business cycle?

    <p>Decreased economic activity</p> Signup and view all the answers

    According to the Schumpeterian Theory, what is the primary driver of business cycles?

    <p>Technological innovations</p> Signup and view all the answers

    What is the primary goal of monetary policy in stabilizing economic activity?

    <p>To stimulate economic growth</p> Signup and view all the answers

    What is the primary difference between the Keynesian and Classical theories of business cycles?

    <p>The importance of aggregate demand in the economy</p> Signup and view all the answers

    What is the primary purpose of fiscal policy in times of economic downturn?

    <p>To stimulate aggregate demand</p> Signup and view all the answers

    What is the primary characteristic of the peak point of a business cycle?

    <p>The highest point of economic activity</p> Signup and view all the answers

    What is the primary role of the government sector in the circular flow model?

    <p>To regulate the economy and stabilize economic activity</p> Signup and view all the answers

    What is the primary objective of the New Economic Paradigm?

    <p>To smooth out the volatility in business cycles and achieve stable growth</p> Signup and view all the answers

    What type of indicators confirm trends that are already in process?

    <p>Lagging Indicators</p> Signup and view all the answers

    What is the main focus of supply-side policies?

    <p>Increasing productivity and efficiency through technological advancements</p> Signup and view all the answers

    What is the primary role of the public sector?

    <p>Providing essential services like defense and education</p> Signup and view all the answers

    What is a challenge facing the public sector?

    <p>Inefficient use of resources due to lack of clear performance metrics</p> Signup and view all the answers

    What is the primary objective of fiscal policy instruments?

    <p>To manage economic cycles through adjusting tax rates</p> Signup and view all the answers

    What is the primary goal of the Medium-Term Expenditure Framework (MTEF)?

    <p>To plan over a three-year period, allowing for more predictable and strategic allocation of resources</p> Signup and view all the answers

    What is the primary focus of the Laffer Curve?

    <p>To illustrate the relationship between taxation and economic activity</p> Signup and view all the answers

    What is the primary objective of the public sector's pricing policy?

    <p>To fulfill social responsibilities rather than maximizing revenue</p> Signup and view all the answers

    What is a challenge facing State-Owned Enterprises (SOEs)?

    <p>Lack of competition and accountability, leading to inefficiency</p> Signup and view all the answers

    Which of the following is a characteristic of economic development?

    <p>Redistribution of income to enhance consumption among lower-income earners</p> Signup and view all the answers

    What is the primary goal of the Reconstruction and Development Programme (RDP) in South Africa?

    <p>Meeting basic needs and developing human resources</p> Signup and view all the answers

    What is the primary difference between the demand-side and supply-side approaches to economic growth?

    <p>The demand-side approach focuses on increasing government expenditure, while the supply-side approach focuses on improving the quality of the labor force</p> Signup and view all the answers

    What is the primary characteristic of the North/South divide?

    <p>A significant disparity in income levels and economic stability between the developed and developing countries</p> Signup and view all the answers

    What is the primary goal of industrial policies in South Africa?

    <p>Increasing industrial activity and diversifying the economy</p> Signup and view all the answers

    Which of the following is an example of a supply-side approach to economic growth?

    <p>Improving the quality of the labor force through education and training</p> Signup and view all the answers

    What is the primary objective of the New Growth Path (NGP) in South Africa?

    <p>Focusing on job creation and identifying job drivers</p> Signup and view all the answers

    What is the primary goal of the Growth, Employment, and Redistribution (GEAR) strategy in South Africa?

    <p>Aiming at market-led growth and fiscal discipline</p> Signup and view all the answers

    What is the primary focus of the Accelerated and Shared Growth Initiative of South Africa (Asgi-SA)?

    <p>Targeting halving unemployment and poverty</p> Signup and view all the answers

    Which of the following is an example of an export promotion strategy?

    <p>Encouraging domestic industries to increase their exports</p> Signup and view all the answers

    What is the main objective of South Africa's industrial policies?

    <p>To reduce dependence on traditional sectors like mining</p> Signup and view all the answers

    What is the primary focus of the National Research and Development Strategy (NRDS)?

    <p>To boost innovation across industries</p> Signup and view all the answers

    What is the primary goal of Special Economic Zones (SEZs) in South Africa?

    <p>To attract foreign direct investment</p> Signup and view all the answers

    What is a key principle of South Africa's industrial policies?

    <p>Inclusivity</p> Signup and view all the answers

    What is the primary focus of Spatial Development Initiatives (SDIs) in South Africa?

    <p>To develop infrastructure in underdeveloped areas</p> Signup and view all the answers

    What is a challenge facing South Africa's industrial strategies?

    <p>Implementation gaps</p> Signup and view all the answers

    What is the primary goal of evaluating South Africa's industrial strategies?

    <p>To assess the effectiveness of policies in promoting economic growth</p> Signup and view all the answers

    What is the primary focus of the Integrated Manufacturing Strategy (IMS) in South Africa?

    <p>To enhance competitiveness in the manufacturing sector</p> Signup and view all the answers

    What is a key objective of South Africa's industrial policies in terms of employment?

    <p>To reduce unemployment rates</p> Signup and view all the answers

    What is the primary goal of South Africa's industrial policies in terms of regional development?

    <p>To promote equitable economic development across regions</p> Signup and view all the answers

    What is the primary focus of the Terms of Trade indicator?

    <p>Comparing the rate of export prices to import prices</p> Signup and view all the answers

    Which indicator measures the proportion of the Economically Active Population (EAP) that is employed?

    <p>Employment Rate</p> Signup and view all the answers

    What is the primary purpose of the M1, M2, and M3 aggregates?

    <p>Reflecting the liquidity available in the economy</p> Signup and view all the answers

    What is the primary goal of International Comparisons?

    <p>Comparing South Africa's economic performance with that of other countries</p> Signup and view all the answers

    What is the primary purpose of the Repo Rate?

    <p>Influencing other interest rates across the economy</p> Signup and view all the answers

    What do Infant and Under-5 Mortality Rates indicate?

    <p>The effectiveness of healthcare systems</p> Signup and view all the answers

    What is the primary focus of the Producer Price Index (PPI)?

    <p>Reflecting the average movement of selling prices from domestic production over time</p> Signup and view all the answers

    What is the primary purpose of the Economically Active Population (EAP) indicator?

    <p>Representing all persons within the working age group available to supply labor for production</p> Signup and view all the answers

    What do social indicators, such as Education and Health, measure?

    <p>The government's commitment to improving education and healthcare</p> Signup and view all the answers

    What is the primary goal of using economic and social indicators?

    <p>To identify areas needing intervention and evaluate the impact of current policies</p> Signup and view all the answers

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