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Question 4 (Marks: 25)
Conduct your own research on the current state of the South African economy in terms of the five main macroeconomic objectives. Write a paragraph for each macroeconomic objective in which you detail your findings.
(Hint: You must provide accurate information based on your research and as far as
possible, specify numerically the current status quo with regards to each of the macroeconomic objectives.)
ou are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G.
Consumption 350 billion G
Transfer payments 100 billion G
Investment 100 billion G
Government purchases 200 billion G
Exports 50 billion G
Imports 150 billion G
Bond purchases 200 billion G
Earnings on foreign investments 75 billion G
Foreign earnings on Amagre investment 25 billion G
Compute net foreign investment.
Compute net exports.
Compute GDP.
Compute GNP.
In addition to responding with a quantitative answer, briefly describe how you arrived at your answers.
An expansionary fiscal policy would most likely cause which of the following changes in output and interest rates?
Both output and interest rate will decrease.
Output will increase and interest rate falls.
Both output and interest rate will increase.
Output will fall and the interest rate increases.
The supply-side effects of fiscal policy in the AD-AS model shows, that an increase in the marginal tax rate on labour income will do the following:
Increases potential GDP because people work more as they have less disposable income.
Increase the incentive to work.
Increase the equilibrium quantity of labour as firms demand more workers at the lower wage.
Decreases potential GDP.
a) Estimate t-value for each of the predictor variables in the model (b) Briefly explain why Mamelodi and Phatane may have concluded that the result did not make sense. c) In order to improve the model, the two researchers added the variable T (time) and obtained: Yt = -0.740 + 0.578 It + 0.218 Dt + 46.6 Rt à ¢ 40.4 Tt (1755) (0.442) (0.959) (10.9) (26.9) St
Qx=100-0.75)y +0.251px1/3 + 2p3/2
where Qx is quantity demand of commodity X. 7Px is the price of commodity X, p, is
the price of commodity Y and I is income.
Then:
A. Find the price elasticity of demand. Decide whether it is elastic, unitary clastic or
what is price elasticity
Qx=100-0.75)y +0.251px1/3 + 2p3/2
where Qx is quantity demand of commodity X. 7Px is the price of commodity X, p, is
Discuss the trade-off between unemployment and inflation
Considering automatic stabilizer, which of the following is likely to increase the South African government’s existing budget deficit?
- A decrease in real GDP.
- A lower unemployment rate.
- A decrease in the price level.
Group of answer choices
I only
II only
I, II and III.
II and III only
#340153 on Dec 2023