Macroeconomics Answers

evaluate the effect of changes in the macro-economic business environment on a specific business organisation you have chosen. This may be an organisation from your own experience or one you have researched.

QUESTION 3:

Consult the Consumer Price Index – Statistical Release published by Statistics South Africa for November 2020 and then proceed to answer the questions.

3.1 Explain the trends in the CPI from November 2019 to November 2020.  [2]

3.2 Discuss the main contributors to the annual inflation rate.  [6]

3.3 Explain how the headline inflation changed from January 2016 to November 2020 year 

on year.  [6]

3.4 Discuss the CPI trends per province from November 2019 to November 2020.  [4]

3.5 List the two main causes of inflation in the short run.  [2]

3.6 Illustrate and explain the two causes of inflation by referring to its initial effects. [10]

QUESTION 3:

Consult the Consumer Price Index – Statistical Release published by Statistics South Africa for November 2020 and then proceed to answer the questions.

3.1 Explain the trends in the CPI from November 2019 to November 2020.  [2]

3.2 Discuss the main contributors to the annual inflation rate.  [6]

3.3 Explain how the headline inflation changed from January 2016 to November 2020 year 

on year.  [6]

3.4 Discuss the CPI trends per province from November 2019 to November 2020.  [4]

3.5 List the two main causes of inflation in the short run.  [2]

3.6 Illustrate and explain the two causes of inflation by referring to its initial effects. [10]

4.1 Explain how the decision taken to adjust the repo-rate since the beginning of 2020 will impact the bank-credit channel, the interest rate channel and the exchange rate channel.     [16]

4.2 Discuss by referring to the article above whether or not the repo-rate alone could assist to correct the unemployment rate and low growth trends South Africa is grappling with. Which suggestion was made in this regard?                       [4]

Explain what is implied with intertemporal substitution.      [4]

2.2 Explain the wealth effect as a reason causing the AD curve to slope negatively.       [4]

2.3 Write notes to effectively contrast the long-run aggregate supply curve and the short-run aggregate supply curve and also elaborate on how both are affected by the price level.[10]

2.4 An interesting result of increasing the tax rate is that it may not always lead to higher tax revenue. Explain this statement.

Wage Bargaining: Reconsider the wage bargaining game from class, where pilots outside option so is private information, and United believes that it is uniformly dis- tributed on 0,10). As in class, assume that United makes a take-it-or-leave-it wage offers to the pilots. If the pilots reject the offer, United goes bankrupt. (a) Calculate the optimal offers for profits (before salaries) 7 = 16. Are there any mutually beneficial trades that do nor occur in equilibrium? (b) Calculate the optimal offer s for profits (before salaries) 7 = 20. Are there any mutually beneficial trades that do nor occur in equilibrium? Discuss.

Explain the advantages and disadvantages of increasing population.

Domestic financial sources in modern economy of Pakistan.

Write a magazine article called ‘Understanding the micro-economic business environment’. In the article you must:

·        explain the importance of the micro-environment to business organisations

• analyse business objectives and behaviour in an economic context
• assess the impact of market structures on business organisations.

·        explain the importance of the micro-environment to business organizations