Answer to Question #154878 in Macroeconomics for Tshepang

Question

the AD‐AS model, how the South African Government can use

fiscal policy as a tool to recover from the negative effects of this COVID‐19

pandemic.

Answer 1

The South Africa government can invest more money on additional health care and allocate more cash to employ doctors in the health facilities.

The government can also grant tax exemptions on humanitarian aid and donations and some delays on filing taxes for selected imports.

The South Africa government can also do a conservative supplementary budget, aiming at securing space for additional health expenditure, while balancing the need to keep debt on a sustainable path.