Answer to Question #271589 in Macroeconomics for Maphula

Question

a. Clearly explain any 3 characteristics of a developing economy. 

b. Mention any five challenges to the South African economic growth.

c. Which challenge is at the top list of South Africa’s priorities and why?

d. Mention the three main rating agencies. 

Answer 1

A) 3 Characteristics of developing countries

I) Low Per Capita Real Income- This is one of the most defining characteristics of developing countries. They suffer from low Per Capita Real Income resulting into low savings and investments.

ii) High rate of uemployment- In these countries unemployment suffers seasonal variation especially in rural areas.

iii) High population growth rate - They have high population growth rate or large populations due to lack of family planning, lack of sex education and the belief that more children provide a high labour force.

B) Five challenges to the South African economic growth

i)Corruption and mismanagement of government

ii)Significant unemployment

iii)Violent crime

iv) Insufficient infrastructure

v)Poor government service delivery

C) Top in the list

The biggest challenge in South Africa according to research if the stubbornly unemployment rate

D) 3 main rating Agencies

A rating agency is a company that assesses the financial strength of a company and government entities more so the ability to meet principal and interest payments in the debts.

The 3 main include;

1. S& P Global rating found in USA
2. Moody's based in USA
3. Fitch Group in New York City