b) decrease; increase c) increase; increase d) increase; decrease QUESTION 2 Pro
ID: 1134696 • Letter: B
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b) decrease; increase c) increase; increase d) increase; decrease QUESTION 2 Product (GDP) and discuss the problems associated with GDP as a measure of an (20) Domestic economy's total production. 22 Discuss ANY FIVE (S) ways in which the government intervenes in the economy of your country (10) (10) (30) (15) QUESTION 3 3.1 Explain the term, unemployment and describe how it is measured Diszuss with examples, ANY FIVE (5) types of unemployment that exist in your country 33 Discuss the economic and social costs of unemployment in your country (10) QUESTION4 : DFerentiate between an exchange rate and the foreign exchange market. 42 Explain how changes in exchange rates can influence exports and imports in your country. 3 Discuss ANY FIVE (5) arguments for and against the use of trade barriers by the government of your country. (30) (15) 4 As a resut of pressure from the Southern African Clothing and Textile Workers Union (SACTWU), the South Afican government has decided to increase the tariff on textiles. Explain who would gain and who woul lase as a resuit of the decision taken by the South African government. PROGRAMME HANDBOOK: JANUARY 2018 INTAKEExplanation / Answer
Answer 2.1 -
GDP- The value of all goods and services produced within the territory of country within one year.
Problems with GDP- It is simply the annual aggregation of production of goods and services within the territory. It doesn't necessarily shows the real well-being of an economy. Additionally, it maynot include the damages due to activities like terrorism, pollution, environmental problems while calculating, which actually increses the actual GDP. All the goods are not sold on market price, hence, the GDP may not include the actual value. GDP doesn't include the black marketing, which is so rampant. GDP increase represents growth, not the development. In other words, rising GDP figures may sound great, but in reality, not all people are getting the proper development.
Answer 2.2-
5 ways government intervenes in the economy-
1. Government stabilizes the prices of the commodities.
2. May control market through taxes and subsidies.
3. Comes up with social welfare schemes.
4. State funding in different areas.
5. Maximum and minimum prices and deciding minimum wages for the labour.
Answer 3.1.
Unemployment-
It is the ratio between the person not employed currently to the total labor force. It's also called joblessness.
Measurement of Unemployment-
According to International Labor organization (ILO), there are 4 ways to measure unemployment-
1. Labor force sample surveys based on race and gender (the most preferred method).
2. Official estimates- coming up with a mixup of different methods. They are not the exact data.
3. Insurance database- based upon how many in the labor force are insured or uninsured.
4. Employment office data- a very least preferred way where the unemployment is estimated on the basis of counting of how many have joined or left the employment offices.
Answer 3.2
Types of Unemployment-
1. Voluntary unemployment- Able person not doing a job just because the wage rate is low, creating unemployment in the economy.
2. Frictional unemployment-
A temporary state of Unemployment while switching the jobs.
3. Seasonal unemployment- Again a temporary form where the unemployment stays only in one particular season.moment
4. Cyclical unemployment- based on trade cycles. During the period of boost, the job rate improves automatically.
5. Structural unemployment- when economy is changing maybe because of technology and all, the demand for production decreses, hence causing unemployment.
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