170 Questions
What is the primary function of the foreign sector in the circular flow model?
To facilitate trade activities, including exports and imports
What is measured by GDP?
The total economic output at market prices
Which market deals in resources like labor and capital?
Factor Market
What is the main role of households in the circular flow model?
To provide labor and resources, receiving income used for consumption, savings, and taxes
What is the name of the economic model that illustrates the economic activities among various sectors and their interactions through markets?
Circular Flow Model
What is the term for the movement of goods and services in the circular flow model?
Real Flows
Which sector of the economy utilizes labor and resources to produce goods and services?
Firms
What is the name of the market that manages the flow of money?
Financial Market
What is Gross National Income (GNI)?
The total income earned by a country's residents, including income received from abroad.
What is the focus of the Two-Sector Model in the Multiplier Effect?
Household and firm interactions.
What is the formula for the multiplier in a simple two-sector model?
k = 1 / (1 - MPC)
What characterizes the expansion phase of a business cycle?
Increase in economic activities.
What is the highest point of economic activity in a business cycle?
Peak
What is an example of an exogenous factor influencing business cycles?
Natural disasters.
Which theory suggests that business cycles are driven by changes in aggregate demand?
Keynesian Theory
What is the primary tool used in Monetary Policy?
Interest rates
What is the purpose of Fiscal Policy?
To stabilize economic activity.
What is the function of the Multiplier Effect?
To measure the impact of initial spending on economic output.
What is the main objective of the New Economic Paradigm?
To smooth out the volatility in business cycles and achieve stable growth
What type of economic indicators confirm trends that are already in process?
Lagging indicators
What is the main purpose of the public sector?
To provide structure and essential services that are not profit-driven
What is a challenge faced by the public sector in terms of efficiency?
Lack of clear performance metrics and accountability
What is the objective of pricing policy in the public sector?
To fulfill social responsibilities
What is the purpose of the Medium-Term Expenditure Framework (MTEF) in the public sector?
To plan over a three-year period
What is the main objective of fiscal policy?
To manage economic activity
What is the Laffer Curve related to?
Fiscal policy
What is the main purpose of forecasting business cycles?
To prepare for economic fluctuations and mitigate adverse effects
What is the role of state-owned enterprises (SOEs) in the public sector?
To operate in the public interest
What is the primary goal of directing government spending towards public goods and services?
To encourage economic growth and stability
What does the Laffer Curve illustrate?
The relationship between tax rates and tax revenue
What is a potential consequence of price controls being set below market equilibrium?
Shortages
What is a result of decisions based on incomplete or inaccurate information?
Inefficient outcomes
What is a potential consequence of excessive bureaucracy?
Stifled innovation
What is a crucial role of the public sector in South Africa?
Managing resources and providing essential services
What is the primary purpose of the circular flow model?
To describe the movement of money and goods across different sectors of the economy
Which market facilitates international trade?
Foreign Exchange Market
What is the name of the economic model that measures the total economic output at market prices?
Gross Domestic Product (GDP)
What is the primary function of the government sector in the circular flow model?
To collect taxes and inject spending into the economy
What is the term for the movement of goods and services in the circular flow model?
Real Flows
Which sector of the economy receives income used for consumption, savings, and taxes?
Households
What is the term for the financial transactions for goods and services in the circular flow model?
Money Flows
What is the result of additional spending in the economy?
An amplification of economic activity
What is the main difference between GNI and GDP?
GNI accounts for foreign income, while GDP does not
What is the Two-Sector Model focused on?
Household and firm interactions
What is the purpose of the Multiplier Effect?
To measure the impact of initial spending on economic output
What characterizes the contraction phase of a business cycle?
Decreased economic activity and decline in economic indicators
What is the purpose of Fiscal Policy?
To stabilize economic activity through government spending and taxation
What is the Schumpeterian Theory focused on?
The role of technological innovation
What is the peak of a business cycle?
The highest point of economic activity
What is an example of an endogenous factor influencing business cycles?
Changes in consumer confidence
What is the purpose of Monetary Policy?
To stabilize economic activity through interest rates and money supply
What is the formula for the multiplier in a simple two-sector model?
k = 1 / (1 - MPC)
What is the main objective of directing government spending towards public goods and services?
To encourage economic growth and stability
What is a potential consequence of price controls being set below market equilibrium?
Shortage
What is a result of decisions based on incomplete or inaccurate information?
Inefficient outcomes
What is a consequence of excessive bureaucracy in the public sector?
Stifling innovation and responsiveness
What does the Laffer Curve illustrate?
The relationship between tax rates and tax revenue
What is the crucial role of the public sector in South Africa?
To manage resources and provide public goods and services
What is the main objective of the New Economic Paradigm?
To smooth out the volatility in business cycles
What is the focus of supply-side policies?
Increasing productivity and efficiency
What type of economic indicator confirms trends that are already in process?
Lagging Indicators
What is the main objective of forecasting business cycles?
To mitigate the adverse effects of downturns
What is the primary role of the public sector?
To provide structure and essential services
What is a challenge faced by the public sector in terms of efficiency?
Lack of clear performance metrics
What is the objective of pricing policy in the public sector?
To fulfill social responsibilities
What is the purpose of the Medium-Term Expenditure Framework (MTEF)?
To plan over a three-year period
What is the main objective of fiscal policy?
To manage aggregate demand
What is the Laffer Curve related to?
Fiscal policy and taxation
What is the primary function of the goods market in the circular flow model?
To trade consumer goods and services
What is the term for the movement of money in the circular flow model?
Money Flows
What is the role of firms in the circular flow model?
To utilize labor and resources to produce goods and services
What is measured by the GDP?
The total economic output at market prices
What is the function of the foreign exchange market?
To facilitate international trade
What is the result of additional spending in the economy?
An amplification of economic activity
What is the role of the government sector in the circular flow model?
To collect taxes and inject spending into the economy
What is the name of the economic model that illustrates the economic activities among various sectors and their interactions?
Circular Flow Model
What is the main objective of directing government spending towards public goods and services?
To encourage economic growth and stability
What is a potential consequence of subsidies and taxes if not carefully managed?
Distortion of market operations leading to inefficiencies
What is a result of decisions based on incomplete or inaccurate information?
Inefficient outcomes
What is the Laffer Curve related to?
The relationship between tax rates and tax revenue
What is a potential consequence of price controls being set below market equilibrium?
Shortage of goods and services
What is a crucial role of the public sector in South Africa?
To manage resources and provide services not suitable for private sector delivery
What is the primary objective of the New Economic Paradigm?
To smooth out the volatility in business cycles
What type of economic indicators predict future economic activity?
Leading indicators
What is the primary goal of the public sector?
To provide essential services
What is the main challenge faced by the public sector in terms of efficiency?
Inefficient use of resources
What is the primary objective of fiscal policy?
To promote sustainable economic growth
What is the Laffer Curve related to?
The relationship between taxation and economic growth
What is the primary purpose of forecasting business cycles?
To mitigate the adverse effects of downturns
What is the role of state-owned enterprises (SOEs) in the public sector?
To operate in the public interest
What is the main objective of the public sector in terms of pricing policy?
To fulfill social responsibilities
What is the primary purpose of the Medium-Term Expenditure Framework (MTEF) in the public sector?
To plan over a three-year period
What is the main difference between calculating GNI and GDP?
GNI accounts for income earned by residents, while GDP accounts for income earned by foreigners
What is the primary focus of the Three-Sector Model in the Multiplier Effect?
Government and foreign transactions
What is the name of the economic model that measures the total economic output at different price levels?
National Income Model
What is the primary cause of business cycles according to the Keynesian Theory?
Changes in aggregate demand influenced by collective behavior of consumers and businesses
What is the primary tool used to stabilize economic activity during booms and downturns?
Monetary Policy
What is the name of the phase of the business cycle characterized by a decline in economic activity?
Contraction
What is the main objective of Fiscal Policy?
To stabilize economic activity during booms and downturns
What is the formula for the multiplier in a simple two-sector model?
k = 1 / (1 - MPC)
What is the primary role of government in the Schumpeterian Theory?
To promote technological innovation
What is the term for the highest point of economic activity in a business cycle?
Peak
What is the primary function of the markets in the circular flow model?
To facilitate economic activities among various sectors
Which sector of the economy is responsible for generating revenue and expenditures within the economy?
Firms
What is the term for the financial transactions for goods and services in the circular flow model?
Money Flows
What is the result of additional spending in the economy, according to the multiplier effect?
An increase in economic activity
What is the focus of the circular flow model?
Illustrating the economic activities among various sectors and their interactions through markets
Which market facilitates international trade?
Foreign Exchange Market
What is the name of the economic model that measures the total economic output at market prices?
Gross Domestic Product (GDP)
Which sector of the economy receives income used for consumption, savings, and taxes?
Households
What is the primary objective of the New Economic Paradigm?
To smooth out the volatility in business cycles
Which type of economic indicators confirm trends that are already in process?
Lagging Indicators
What is the primary purpose of the public sector?
To provide essential services
What is a challenge faced by the public sector in terms of efficiency?
Inefficiency due to lack of clear performance metrics
What is the main objective of pricing policy in the public sector?
To fulfill social responsibilities
What is the purpose of the Medium-Term Expenditure Framework (MTEF)?
To plan over a three-year period
What is the primary tool used in Fiscal Policy?
Government Spending
What is the Laffer Curve related to?
Taxation and economic growth
What is the main objective of forecasting business cycles?
To mitigate the adverse effects of downturns
What is the primary goal of directing government spending towards public goods and services?
To encourage economic growth and stability
What is the role of state-owned enterprises (SOEs) in the public sector?
To manage resources and services
What is the Laffer Curve used to illustrate?
The relationship between tax rates and tax revenue
What is a potential consequence of subsidies and taxes?
They can distort market operations and lead to inefficiencies
What is a result of decisions based on incomplete or inaccurate information?
Inefficient outcomes
What is a potential consequence of excessive bureaucracy?
It can stifle innovation and responsiveness
What is the crucial role of the public sector in South Africa?
To manage resources and provide services that are not suitable for private sector delivery
What is Gross National Income (GNI) primarily concerned with?
All income earned by a country's residents, adjusting for income received from abroad
What is the primary focus of the Three and Four-Sector Models?
Government and foreign transactions, including taxes and imports
What is the formula for the multiplier in a simple two-sector model?
k = 1 / (1 - MPC)
What is the name of the phase in a business cycle where economic activity is at its highest point?
Peak
Which theory suggests that business cycles are driven by external shocks and market processes?
Classical and Neoclassical Theories
What is the primary tool used in Monetary Policy?
Interest rates and control of money supply
What is the main objective of Fiscal Policy?
To stabilize economic activity through government spending and taxation
What is an example of an exogenous factor influencing business cycles?
Natural disasters
What is the primary purpose of the Multiplier Effect?
To explain how initial increases in spending lead to a larger overall increase in economic output
What characterizes the contraction phase of a business cycle?
Economic indicators decline, and businesses start to slow down production
What is the main function of the firms sector in the circular flow model?
Utilize labor and resources to produce goods and services
What is the main function of the households sector in the circular flow model?
Provide labor and resources, receiving income used for consumption, savings, and taxes
What is the term for the financial transactions for goods and services in the circular flow model?
Money Flows
What is the term for the movement of goods and services in the circular flow model?
Real Flows
What market facilitates international trade?
Foreign Exchange Market
What is the term for the amount of additional spending that amplifies economic activity?
The Multiplier Effect
What is the term for the economic model that measures the total economic output at market prices?
GDP
What is the primary purpose of the circular flow model?
To illustrate the economic activities among various sectors and their interactions through markets
What is the purpose of directing government spending towards public goods and services?
To encourage economic growth and stability
What does the Laffer Curve illustrate?
The relationship between tax rates and tax revenue
What is a potential consequence of price controls being set below market equilibrium?
Shortages
What is a result of decisions based on incomplete or inaccurate information?
Inefficient outcomes
What is a potential consequence of excessive bureaucracy?
Stifling innovation and responsiveness
What is the crucial role of the public sector in South Africa?
To manage resources and provide essential public goods and services
What is the main purpose of Gross National Income (GNI)?
To account for all income earned by a country's residents and adjust for income received from abroad
What is the focus of the Three-Sector Model in the Multiplier Effect?
Government and foreign transactions
What is the multiplier formula in a simple two-sector model?
k = 1 / (1 - MPC)
What is the term for the highest point of economic activity in a business cycle?
Peak
Which theory suggests that business cycles are driven by changes in aggregate demand?
Keynesian Theory
What is the primary tool used in Monetary Policy?
Interest rates and control of money supply
What is the main objective of Fiscal Policy?
To stabilize economic activity through government spending and taxation
What is the term for the phase of a business cycle marked by a decrease in economic activity?
Contraction
Which theory focuses on the role of technological innovation in causing business cycles?
Schumpeterian Theory
What is an example of an exogenous factor influencing business cycles?
Natural disasters
What is the primary objective of the New Economic Paradigm?
To smooth out the volatility in business cycles and achieve stable growth
What type of economic indicators predict future economic activity by moving ahead of the business cycle?
Leading indicators
What is the primary function of the public sector?
To provide essential services that are not profit-driven
What is the main objective of the Medium-Term Expenditure Framework (MTEF) in the public sector?
To plan over a three-year period
What is the primary tool used in fiscal policy?
Taxation
What is the main challenge faced by the public sector in terms of efficiency?
Lack of competition and accountability
What is the primary objective of forecasting business cycles?
To predict future economic activity
What is the role of state-owned enterprises (SOEs) in the public sector?
To operate in the public interest
What is the primary purpose of the Laffer Curve?
To illustrate the relationship between tax rates and government revenue
What is the main objective of pricing policy in the public sector?
To fulfill social responsibilities
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