ECONOMICS ASSIGNMENT - ANSWER ALL QUESTIONS
QUESTION 1: Study the scenario below and complete the following tasks:
Economic growth alongside reducing poverty
South Africa's macroeconomic objectives include economic growth, full employment, price stability, and balance of payments stability, alongside the key political and economic objective of reducing inequality in the economy. Achieving these objectives often means trade-offs.
Source: Republic of South Africa: Department of Environmental affairs. 2007. South Africa's macro-economic objectives: Economic growth alongside reducing poverty. [Online] Available at: http://soer.deat.gov.za/337.html [Accessed: 30 March 2015]
Evaluate the five macroeconomic objectives referred to in the scenario and South Africa's current performance in each objective.
Adhere to the following guidelines in your response:
- All five the macro-economic objectives should be explained theoretically
- South Africa's current performance in relation to the five objectives should also be critically evaluated.
- Make use of headings and sub-headings to ensure a logical discussion.
- All facts that are not common knowledge should be referenced using the Harvard Method (in-text references used in the report should be included to bibliography of this assignment).
- At least five external information sources should be used.
- Introduction and conclusion
QUESTION 2:
2.1- With the aid of the circular flow of income and spending in the economy diagram, describe how the four (4) participants in the economy interact with each other.
2.2- Government participation in the economy is essential to improve the standard of living of the people. Critically provide a detailed analysis of the policies that the government could use to increase the living standards of the people.
QUESTION 3: 'It is naive to try to break up monopolies into even a few effectively competing units, because the basic cause of monopoly is the law of decreasing cost with mass production. Moreover, if there are even a few firms, the price is likely to be close to marginal cost.' (Samuelson P & Nordhaus W, 2001:201)
3.1- Using examples in your country, discuss the rationale for government in creating monopolies for the provision of basic goods and services. Explain whether you agree with the above statement.
3.2- Evaluate the advantages of nationalisation over privatisation of the mining industry in South Africa.
QUESTION 4: With the aid of a diagram, explain what is meant by 'exchange rate' and how this exchange rate could influence a country's import and export trade patterns.