ECS1601
Assignment 7
(ALTERNATI
VE) 2024 -
DUE 2
November
2024
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Exam (elaborations)
ECS1601 Assignment 7 (ALTERNATIVE) 2024 - DUE 2
November 2024
Course
Economics IB (ECS1601)
Institution
University Of South Africa
Book
Economics for the IB Diploma with CD-ROM
ECS1601 Assessment 7 - Alternative 2024 – DUE 2 November 2024 ;100 %
TRUSTED workings, Expert Solved, Explanations and Solutions
Question 1 (5 marks) Maximum word count: 100 words 1.1 Suppose you live
in South Africa and have the option to buy proudly South African products or
international brands. With reference to the circular flow of goods and services
and the circular flow of income and spending between households, firms,
government and the foreign sector, provide an explanation as to why it is
better to purchase the proudly South African products and also explain the
opportunity costs of buying international items instead of those produced
locally. (5 marks) Question 2 (10 marks) Maximum word count: 150 words 2.1
The following question is based on the passage below: Mauritius’ economy
has proven otherwise resilient to global economic shocks, including those
stemming from the war in Ukraine, which has affected revenues from tourism
arrivals. GDP growth rebounded by a relatively modest 3.5% in 2021 and
accelerated to an estimated 8.3% in 2022, supported by a strong recovery in
tourism despite headwinds from the war in Ukraine. GDP growth is projected
to moderate to around 5.0% in 2023 as economic activities gradually return to
, normal. With the aid of a diagram, explain how the money market in
Maurituius will be affected by the country’s change in economic growth in
2023. The direction of any changes should be clearly indicated by using
arrows. (4 marks) Page 4 of 7 ECS1601 | Assessment 07 | Year 2024 2.2 •
What effect will a change in the price of copper, as described in Extract 2A,
have on the foreign exchange market of Zambia where the same quantity of
copper is exported regardless of price change? Include a diagram in your
answer. (6 marks) Question 3 (10 marks) Maximum word count: 200 words
3.1 Read the following news clip and answer the question. News extract 3A
Africa’s Inflation Among Region’s Most Urgent Challenges In sub-Saharan
Africa, inflation has been driven less by domestic activity than in advanced
economies. Instead, external developments have shaped the path of inflation
since the start of the pandemic. They include the sharp spike in global
commodity prices, swings in the exchange rate, global supply chain
disruptions, and natural disasters. In the case of food, the prices of key
staples such as maize and wheat have increased since 2019, contributing
two-thirds of overall inflation in fragile states News extract 2B Zambia’s
recovery is expected to strengthen, with GDP growing by around 4.5%
annually over 2023–25. Firmer copper demand from China and
commencement of fertilizer production at a newly established domestic plant
will broaden the base of GDP growth. Completion of reforms to agricultural
policies, business regulations, and the energy sector will boost fiscal
sustainability and promote private sector-led growth. However, the Bank of
Zambia expects inflation to rise and remain above its target band of 6–8%
over the next two years on account of inflationary pressure from sustained
exchange rate depreciation, increase in energy costs, and lingering external
headwinds. For full article visit website: Access date on 10 October 2023
Page 5 of 7 ECS1601 | Assessment 07 | Year 2024 and one-half elsewhere in
the region. Higher global energy prices and the strong dollar have also fed
through to inflation indirectly, via transportation and tradable goods like
household products. Source: International Monetary Fund You're an economic
adviser to the Central Bank and National Treasury and you're asked to advise
both on: (i) With reference to news reported in Extract 3A, explain what type of
inflation is likely to be triggered by rising commodity prices for Sub-Saharan
countries that are commodity exporters and why. Also, explain the influence of
this inflation on the distribution of income and wealth among economic
participants. (ii) the appropriate steps to address the inflation mentioned
above. (8 marks) 3.2 Refer to the following table of Botswana CPI to answer
the question Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019
149,,,94 155,38 160,33 165,04 165,90 163,68 164,99 165,14 165,89 167,38
167,34 167,,31 171,84 172,22 177,39 181,95 184,40 188,64 189,25 188,76
