ECS3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE 6 September 2024
ECS3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE 6 September 2024 ; 100% TRUSTED Complete, trusted solutions and explanations. Ensure your success with us...
ECS3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE 6 September 2024 ; 100% TRUSTED Complete, trusted solutions and explanations. Ensure your success with us...
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ECS3703
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BRILLIANT TUTORS
ECS3703
Assignment2
Semester 2
2024 [Year]
[Type the company address]
, Book
International Economics
ECS3703 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE
August 2024 ; 100% TRUSTED Complete, trusted solutions and explanations.
Question 1 Assume that South Africa trades with the rest of the world
and has a deficit in its trade balance. With the aid of a diagram, explain
how South Africa would use exchange rates to correct the
deficit……………………………………………………….[25 marks]
Remedying an Import/export imbalance Utilizing Trade Rates: Clarification
and Outline
At the point when a nation like South Africa encounters an import/export
imbalance, it implies that the worth of its imports surpasses the worth of its
products. To address this shortage, South Africa can involve conversion
standard changes as an instrument. This is the secret:
1. Figuring out the Import/export imbalance
An import/export imbalance happens when:
• Imports > Commodities
This can prompt a negative equilibrium of installments and could influence the
country's unfamiliar trade holds.
2. Job of Trade Rates
Trade rates decide the worth of one cash comparative with another. By
changing trade rates, South Africa can impact the expense of its commodities
and imports, consequently influencing its exchange balance.
3. Instruments for Remedying an Import/export imbalance
A. Deterioration of the South African Rand
• Definition: Deterioration implies that the worth of the South African rand
(ZAR) falls comparative with different monetary forms.
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