QUESTION 4 40 Marks 4.1.1 Give any TWO reasons for pub…
QUESTION 4 40 Marks 4.1.1 Give any TWO reasons for public sector failure. (2) 4.1.2 What is the purpose of a trend line in a business cycle? (2) 4.2 Study the table and answer the questions that follow: RIGHT CLICK ON THE BUTTON TO OPEN THE TABLE IN A NEW TAB: 4.2.1 Give an example of semi-durable goods. (1) 4.2.2 Name another item used in calculating GDE. (1) 4.2.3 How do we convert GDP @ market prices to GNP @ market prices? (2) 4.2.4 Why are the figures above not a true reflection of GDE growth? (2) 4.2.5 Calculate the percentage contribution of services in the final consumption expenditure by households in 2017. (4) 4.3 Study the extract and answer the questions that follow: THE MULTIPLIER EFFECT In an economy with a mpc of 0,84 the GDI is R500 billion. There are leakages of R150 million as well as injections of R200 million. 4.3.1 What percentage of their income do households save? (2) 4.3.2 Explain the term multiplier. (2) 4.3.3 How will national income be affected by the above leakages and injections? (2) 4.3.4 Calculate the change in national income using the provided information. Show all calculations. (4) 4.4 Distinguish between an improvement in the terms of trade and a deterioration in the terms of trade. (8) 4.5 With the aid of a well-labelled Laffer curve, explain the impact of a tax rate increase on state revenue. (8)