Answer to Question #324313 in Macroeconomics for Zwivhuya Madavha

Question

If South Africa’s economy grows, one would expect …

Answer 1

As a result, South Africa stock prices rise. That gives companies capital to invest and hire more employees. As more jobs are created, incomes rise. Similarly, the economy begins to overheat when it grows too fast. An overheating economy is unsustainable because it can't meet the demands of consumers, businesses, and the government. The natural unemployment rate falls.