Exam (elaborations)
ECS1601 Assignment 7 (ALTERNATIVE) 2024 - DUE 2 November 2024
ECS1601 Assignment 7 (ALTERNATIVE) 2024 - DUE 2 November 2024
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,ECS1601 Assessment 7 - Alternative 2024 – DUE 2November 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)
Purchasing Proudly South African Products: Economic Benefits
and Opportunity Costs
Buying proudly South African products supports the local
economy by enhancing the circular flow of goods and services.
When consumers choose local products, they contribute to
domestic firms, which in turn pay wages to employees,
generating income for households. This income is then spent
within the community, creating a multiplier effect that
stimulates further economic activity.
Conversely, purchasing international brands often results in
money flowing out of the local economy. The opportunity cost
of buying foreign items includes not only the loss of potential
local employment but also diminished investment in domestic
, industries. By prioritizing local products, consumers help sustain
jobs and foster economic growth within South Africa.
Top 3 Authoritative Sources Used:
1. Circular Flow Model of Economics
This source explains the interactions between different sectors
of the economy, illustrating how spending and income circulate
among households, firms, government, and foreign entities.
2. Economic Impact of Local Purchasing
This article discusses the benefits of supporting local businesses
and how it contributes to job creation and economic stability
within communities.
3. Opportunity Cost in Economics
This source provides a detailed explanation of opportunity
costs, emphasizing the trade-offs involved when choosing
between local and international products.
Purchasing proudly South African products strengthens the
domestic circular flow of income. When households buy local
goods, they support South African firms, leading to increased
production, job creation, and income for workers. This boosts
spending within the local economy, enhancing overall growth.
In contrast, buying international items diverts income to the
foreign sector, reducing money circulating domestically. The
opportunity cost of choosing international goods is the
potential loss of local economic growth, reduced job
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