Answer to Question #216420 in Macroeconomics for sese

Question

1. Inflation is a constant reality that has to be considered in all decision making including the process used to arrive at its current figure. In SA an Inflation Rate is provided for the country. Is the actual Inflation Rate the same for those South Africans living in the Northern Cape Province as it is for those living in the Western Cape? If it is the same for both Provinces indicate why and if it is not, also indicate why. Motivate your response clearly using specific examples

Answer 1

According to information obtained from the south Africa's Reserve Bank's latest monetary policy committee statements shows the bank's forecast on REPO rate in south Africa. REPO rate is the main instrument used to Central inflation in South Africa. February 2020 inflation rate came as follows:

Northern cape --4.7%

Western cape_ 5.3%

January 2020 inflation rate,was:

Northern cape_ 4.4%

Western cape_5.1%

December 2019 inflation rate came as follows;

Northern cape_3.5%

Western cape_ 4.1%

Reason as to why it is not the same is:

The inflation rate in the western cape is higher because of the growth rate in their property rent.