Answer to Question #93869 in Macroeconomics for mark

Question

The core elements of the Growth Employment and Redistribution (GEAR) strategy of the South
African government in 1996, under the leadership of the then finance minister Trevor Manuel were
amongst other things:
 budget reform to strengthen the redistributive thrust of expenditure
 monetary policy to prevent a resurgence of inflation
 a reduction in tariffs to contain input prices and facilitate industrial restructuring,
compensating partially for the exchange rate depreciation
1.1 With reference to the above, identify the macroeconomic objectives in these elements?

Answer 1

These elements of the GEAR strategy were aimed at achieving the following macroeconomic objectives:

• Equitable distribution of income and wealth;
• Price stability;
• Equilibrium in the balance of payments.