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Economics Grade 12 Unit 4: MACROECONOMIC POLICY INSTRUMENTS

36 national exam questions have come from this unit. It runs 30 pages; one careful study pass takes about 3.4 hours, and its difficulty is moderate among Economics units. Each section below lists the questions set from it, with the year, and opens the page that teaches it.

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4.1 Definition and Types of Macroeconomic Policies · read p. 72
Not asked in a national paper yet.
4.2 Fiscal Policy · read p. 73
Not asked in a national paper yet.
4.2.1 Tools of Fiscal Policy · read p. 74
Not asked in a national paper yet.
4.2.2 Types of Fiscal Policy · read p. 75
  • 2018 E.C., Q35 – Which one of the following principles of taxation states that the tax system should be able to yield enough revenue so that it should not be forced to resort to deficit financing?
  • 2017 E.C., Q42 – In a situation when an economy is facing the problem of deficient demand, what will happen to the economy?
  • 2017 E.C., Q38 – Which one of the following is true about the differences between monetarist and Keynesian school of thought?
  • 2017 E.C., Q36 – Which one of the following is the view of Classical theory?
  • 2017 E.C., Q43 – Which one of the following is an important role of fiscal policy in an economy?
  • 2016 E.C., Q16 – Which of the following macroeconomic policy involves by which the government manipulates its expenditure and revenue side?
  • 2016 E.C., Q25 – One of the following is considered to be fiscal policy tool. Which one is it?
  • 2016 E.C., Q17 – Which one of the following instrument is considered by the contractionary fiscal policy when there is an excess demand and inflationary pressure in the economy?
  • 2016 E.C., Q69 – Which one of the following characterizes period of expansion in the business cycle?
  • 2016 E.C., Q61 – Which one of the following expresses the classical view?
  • 2011 E.C., Q18 – Which one of the following is true about the structure of government budget?
4.3 Monetary Policy · read p. 78
Not asked in a national paper yet.
4.3.1 Tools of Monetary Policy · read p. 79
Not asked in a national paper yet.
4.3.2 Types of Monetary Policies · read p. 80
  • 2017 E.C., Q44 – Which one of the following is true regarding the impact of monetary policy on aggregate demand?
  • 2017 E.C., Q15 – Among the following alternatives, which one is a monetary policy tool?
  • 2017 E.C., Q45 – Which one of the following is the main issue of macroeconomic policy?
  • 2017 E.C., Q41 – What type of policy aims at changing government spending?
  • 2016 E.C., Q18 – A tight monetary policy is applied in circumstances where there is
  • 2016 E.C., Q62 – What is the important lesson the world has learnt from the 1930's Great Depression?
  • 2016 E.C., Q23 – Which of the following macroeconomic policies involves management of money supply and interest rate?
  • 2016 E.C., Q63 – Which one of the following school of thoughts suggested that the Central bank should follow a constant growth rule for some monetary aggregate to address macroeconomic problems?
  • 2016 E.C., Q24 – Which one of the following is the monetary policy tool that involves the purchase and sale of securities by the nation's central bank?
  • 2012 E.C., Q29 – The major role entrepreneurs can play in an economy is
  • 2011 E.C., Q6 – Which one of the following is an expansionary monetary Policy Instrument?
4.4 Income Policy and Wage · read p. 84
  • 2018 E.C., Q50 – Which one of the following is the objective of income policies?
  • 2018 E.C., Q52 – Which one of the following is correct about the pricing policy?
  • 2017 E.C., Q21 – Which one of the following is true about income policy?
  • 2017 E.C., Q23 – In a free market for labor, the wage rate is determined such that
  • 2016 E.C., Q26 – Which one of the following is correct about price ceilings?
  • 2016 E.C., Q19 – If tight fiscal and monetary policies fail to address the problem of rising price level, what is the alternative policy that the government should consider?
4.5 Foreign Exchange Policies · read p. 89
  • 2018 E.C., Q70 – Which of the following is correct about the effect of devaluation of local currency on the economy?
  • 2017 E.C., Q25 – What is the correct name for a decrease in the exchange rate due to market forces?
  • 2017 E.C., Q24 – Which one of the following is the disadvantage of the floating exchange rate regime?
  • 2016 E.C., Q20 – Which of the following exchange rate regime is the one that is determined by the government political and economic decisions?
  • 2016 E.C., Q27 – Suppose the value of an Ethiopian Birr in terms of Kenyan Shilling is getting higher. What is the impact of this on the Ethiopian export to Kenya?
  • 2012 E.C., Q1 – Two major service providers that help Ethiopia earn considerable foreign exchange compared to other service providers are