Answer to Question #251619 in Macroeconomics for Renlove

Question

Prior to the COVID-19 pandemic, South Africa’s national income was

reported at R3 billion, and in 2021, owing to restrictions implemented to ease the spread of infections, national income reduced to R1.5 billion. Assume that the marginal propensity to save equals 0.3. a) By how much should government spending be increased to bring output/or income to its pre- pandemic levels? [7 marks b) is your answer greater, or less, than the change in income and why? [3 marks]

Answer 1

The socio-economic disparities in the adoption of preventative interventions are eye-opening. Although awareness of the essential step is a precondition, the obstacles to implementing it within an individual's living and livelihood circumstances may make it impossible. Therefore, socio-economic context is expected to play a crucial role like preventive measures adopted by individuals.