Ue b) decrease; increase c) increase; increase d) increase; decrease QUESTION 2

Question

Ue b) decrease; increase c) increase; increase d) increase; decrease QUESTION 2 2.1 Define Gross Domestic Product (GDP) and discuss the problems associated with GDP as a measure (2 10 (t0 economy's total production. 2.2 Discuss ANY FIVE (5) ways in which the government intervenes in the economy of your country. QUESTION 3 3.1 Explain the term, unemployment and describe how it is measured. 3.2 Discuss with examples, ANY FIVE (5) types of unemployment that exist in your country. 30 15) 10) 3.3 Discuss the economic and social costs of unemployment in your country. QUESTION 4 4.1 Differentiate between an exchange rate and the foreign exchange market. (30) 4.2 Explain how changes in exchange rates can influence exports and imports in your country (6 4.3 Discuss ANY FIVE (5) arguments for and against the use of trade barriers by the government of your country (15) 4.4 As a result of pressure from the Southern African Clothing and Textile Workers Union (SACTWU), the South African government has decided to increase the tariff on textiles. Explain who would gain and who would lose as a result of the decision taken by the South African government. 74

Explanation / Answer

Question 2:

2.1:-

Gross Domestic Product (GDP) is the most comprehensive measure, which indicates the overall performance of the economy. The measure of aggregate output is GDP. GDP is the value of total output actually produced in the whole economy over a given time period, which is generally a year. The GDP measure summarizes in a single figure the money value of economic activity within a nation in a given period of time.

The fundamental activity of an economy is the production of goods and services to satisfy the wants of the people. Production of goods and services requires use of land, labour, capital and entrepreneurship.

In a simple economy, consisting of households and firms. In return for the services provided, the households receive income in the form of wages, rent, interest and profits. Therefore, the sum total of earnings i.e. incomes in the form of rent, interest, wages and profits shall give us the economies TOTAL GDP.

GDP is the total income of everyone from the production of goods and services in the economy which equals the sum of wages rent interest and profits during a given period.

Thus it is the measure of flow of rupees in between the Firm's and Households. Thus it is measured from the income side.

The goods and services which are not in transaction for money is neglected while measuring the GDP. Similarly, the illegal act is not the part of the measuring GDP.

2.2:-

First of all we have to understand that how the government intervenes any of economy and these are as follows:

Taxation

Regulations

Subsidies

These are the major interventions which are generally taken by any of the government.

And in the case of South Africa, the economy of South Africa is in unrivalled crisis. They are facing the unemployment on a majority with almost very minimum growth rate.

The Major Interventions of Government of South Africa are:

Tourism, where the government sets new visa regulations because of decline in tourists.

Mining policy because of export policy. Mining was always been a major part of export in south Africa which consists of 50% of Africa's Export these are declining which makes the government intervenes in it.

Support for Small Business also the Part of the government intervention in the South Africans Economy.

Question 3:

3.1: Unemployment is the situation of actively looking for work but not being able to get employed.

The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.

3.2: Type of unemployment

3.3: The Economic and Social cost of unemployment:

Economic Cost

Social Cost

The Social costs include adverse effects on the mental and physical health of the individual, adverse effects on the family, higher rates of alcoholism and drug abuse, and higher crime and suicide rates.

Question 4:

4.1:--

An exchange rate is the cost of country's cash regarding money. In this manner, a conclusion standard has two segments, the residential money and outside cash, and can be cited either straight forwardly or in a roundabout way. A foreign rate is the cost of all residential money expressed as far as cash. At the end of the day, an outside conversion scale cont. Last one cash and other to demonstrate their relative qualities. Since institutionalized monetary form far and wide buyer in an incentive with request, supply and buyer certainly, their quality changes in respect to each after some time.

4.2:-

The exchange rate affects the exchange overflow (or shortage), which thus influences the swapping scale, at Calera. By large notwithstanding a weaker residential cash invigorates fares and make imports more costly. On the other hand, solid household money hampers fares and makes imports less expensive.

4.3:-

Continuation for trade barrier

a) To shield residential employments from "shuddy" work abroad.

b) To enhance an exchange shortfall.

c) To ensure "baby ventures"

d) Insurance for dumping.

e) To procure from income

Contentions against trade barrier:

1) Market mutualism and loss of locative effectiveness.

2) Higher cost for shoppers: Tariff push up the cost from buyer and protect wasteful position of assets both locally and all around.

3)Reduction in showcase access for makers: Exports sponsorship discourage would cost and harm yield benefits, ventures and occuparism in numerous lower pay creating nations that depends on sending out essential and produce merchandise for their development. Protectionism can be inadequate and expensive methods for maintaining employment.

4) As a result of tariff imposed by South African government, the producer of clothing and textile industries will be benefitted and the consumers of these products in the country will have to shell more for the same products out of their pockets.

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.