Macroeconomics Answers

The South African Government had to implement lockdown strategies to slow down the spread of the Corona Virus. As part of the strategy, “The President declared a National State of Disaster as a result of the Covid-19 global pandemic. In this regard he introduced a special Covid 19 Social Relief of Distress Grant (SRD) of R350 per month for 6 months to be paid to individuals who are currently unemployed, do not receive any form of income, social grant or UIF payment etc.

This Social Relief of Distress Programme was confirmed in the Regulations made under Section 27(2) of the Disaster Management Act, 2002 (Act No. 57 of 2002): Measures to prevent and combat the spread of COVID-19, as amended.”

To ensure that the right people get the R350 grant, specific targeting methods must be use, discuss the any three approaches to targeting social relieused in South African Social Assistance Programme indicating if the targeting strategy used achieve the programme objective.

Question 5 Price level (GDP deflator, 2005 = 100) Quantity of real GDP demanded (trillions of 2005 dollars) Quantity of real GDP supplied (trillions of 2005 dollars) 115 8.8 12.0 110 9.4 11.0 105 10.0 10.0 100 10.6 9.0 95 11.2 8.0 90 11.8 7.0 Based on the table above, a) What is the equilibrium price level and real GDP? (4 marks) b) If potential GDP is $11.0 trillion, what does that imply about the economy's level of employment? (8 marks) c) If potential GDP is $9.0 trillion, what does that imply about the economy's level of employment? (8 marks)

Determine the producer surplus when equilibrium price is Pe=5. Given the supply function of p=S(q)= q + 2

Consider the following Keynesian model for an economy: С C=C + CY C=C+cYd = C + c(1 – t) Y Consumption spending c(1 - 1) С Y Total income where C = 85 million + 0.5Yd ī = 75 million G = 70 million T = 0,25Y Y = R450 million Equilibrium income: Y = C + + G Disposable income: Yd = (1 – t)Y NOTE: A proportional income tax reduces the disposable income of households and therefore also their consumption spending, which forms part of aggregate spending in the economy. The introduction of a proportional income tax thus reduces aggregate spending, ceteris paribus. Question 4 [20] 4.1. Answer the following questions: 4.1.1. What is the value of the marginal propensity to consume in this model? 4.1.2. Calculate the multiplier. (1) (3)

4.1.3. Calculate the equilibrium level of income using the calculated value of the multiplier in 4.1.2. (3) 4.1.4. How much does the government collect in taxes when the economy is in equilibrium? (2) 4.1.5. Is the government currently running at a surplus or a deficit? (2)

1) Give at least two (2) examples of positive statement and two (2) examples of normative statement that somehow relates to your daily life.

Why is a public sector necessary at all in a so-called free enterprise economy?