Economic Fundamentals in the Investment Environment BECO01-5 (NQF LEVEL 5)
Please note: This sample exam paper does not necessarily have the identical format to the examination (summative assessment) that you will write at the end of the semester. However, the type of questions that you will find are similar in nature to those found in the exam. Please see the Assessment Guidelines pertaining to this module for more guidance relating to the exact structure of your exam.
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SECTION A (40 MARKS) – MULTIPLE CHOICE QUESTIONS
Question 1 (40 marks) Select the correct answer and write it into your examination book next to the question number (for example, 11-C): 1.1 Asset classes are divided into how many main groups? a) b) c) d) Two Three Four Five
Answer: (Topic 3; page 112) c 1.2 A bank fulfills the function of being an intermediary between: a) b) c) d) Consumers and producers. Consumers and suppliers. Savers and borrowers. Capitalists and entrepreneurs.
Answer: (Topic 2; page 60) c 1.3 Capital is the concept which economists use to describe and to quantify: a) b) c) d) The amount of cash which shareholders invest a newly formed company. Factories, office blocks and equipment used in the manufacturing processes. The investments made in training personnel. The cash available to fund the daily running of the enterprise.
Answer: (Topic 1; page 3) b 1.4 When a crop failure hits the tomato farmers and we anticipate the effect on the supply curve of tomatoes with the green grocers we shall: a) b) c) d) Illustrate it with a rightward shift of the supply curve Illustrate it with a leftward shift of the supply curve Describe it as a change in quantity supplied. Expect a corresponding drop in the demand for tomatoes.
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Answer: (Topic 1; page 21-22) b 1.5 Commercial banking is a unique type of banking service because: a) b) c) d) The institutions rendering this kind of service are focused on that only and do not undertake mortgage financing. Commercial banking services are rendered for high net-worth clients only. Bank overdrafts can be arranged as a form of credit. Commercial banking services are focused on the best investment opportunities for its clients. Answer: (Topic 2; page 63) c 1.6 The Rand appreciates markedly and this can result in: a) b) c) d) Higher wage demands from groups of workers who are mainly consuming imported goods. Lower expectations of cost-push inflation, seeing that South Africa is a net importer of capital equipment. Higher state revenue from income taxes on South African exporters. a and c.
Answer: (Topic 1; page 45) b 1.7 You are the lawful owner of a property described as XYZ and are registered as such by your local authority for the purposes of property taxes. The tax assessment which you receive based on the value of your property is known as a/an: a) b) c) d) Indirect tax Value added tax Capital gains tax Direct tax.
Answer: (Topic 1; page 32) d 1.8 A time series on the Real Gross Domestic Product: a) b) c) d) Does not reveal any signs of the presence of the business cycle. Can serve the purpose of an economic indicator. Is not very useful in economic analyses because of the distorting effect of inflation. Counts only the contribution of labour to the output of the economy.
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Answer: (Topic 1; page 8) b 1.9 Economics, by definition: a) b) c) d) Studies cases where voluntary organisations render support services to vulnerable groups of people in the economy. Ignores the decisions made by politicians in government. Ignores those...