ECS1601 Assignment 7 (DETAILED ANSWERS) Semester 2 2024 - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED Answers, guidelines, workings and references ,... Question 1 (5 marks) Maximum word count: 100 words
1.1
Suppose you live in South Africa and have the option to buy p...
ECS1601 Assignment 7 (COMPLETE ANSWERS) 2024 - DUE 29 October 2024
ECS1601 Assignment 7 (COMPLETE ANSWERS) 2024 - DUE 29 October 2024 - Course Economics IB (ECS1601)
ECS1601 Assignment 7 (COMPLETE ANSWERS) 2024 - DUE 29 October 2024; 100% TRUSTED Complete, trusted solutions and explanations.Ensure your success with us...
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ECS1601
Assignment 7 2024
Unique #:
Due Date: 29 October 2024
Detailed solutions, explanations, workings
and references.
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, QUESTION 1
1.1.
Choosing to buy proudly South African products positively impacts the circular
flow of income and spending within South Africa's economy. When consumers
purchase locally produced goods, income circulates within the domestic market,
benefiting South African households and firms. These transactions generate
higher demand for local goods, leading to increased production, more
employment opportunities, and higher incomes. Local firms may also contribute to
the government’s revenue through taxes, which, in turn, funds public services and
infrastructure, further stimulating economic growth.
In contrast, buying international brands redirects spending outside the country,
reducing the income circulating within South Africa and weakening local
businesses. The opportunity cost of choosing imported goods is the potential loss
of domestic job creation, tax revenue, and investment in local industries. By
purchasing locally, consumers strengthen the economy, supporting sustainable
growth and reducing dependency on foreign markets.
QUESTION 2
2.1.
The slower economic growth in South Africa, as indicated by the lower-than-
expected GDP growth of 0.9% year-on-year in the fourth quarter of 2022, will
impact the money market by reducing the demand for funds. A lower growth rate
suggests that businesses and households may be less inclined to borrow for
investments or consumption, reducing the demand for money in the economy.
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