ASSIGNMENT 1
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Initials
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Student number |
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Submission Venue |
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economics assignmentGOOD LUCK !! |
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Initials |
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Student number |
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Marks |
Total |
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A |
40 |
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B.1 |
5 |
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B.2 |
8 |
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B.3 |
8 |
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B.4 |
5 |
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B.5 |
8 |
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B.6 |
3 |
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B.7 |
3 |
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80 |
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GRAND TOTAL |
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Options / | ||||
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1 |
2 |
3 |
4 |
5 |
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Question / Vraag 1 |
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Question2 |
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Question 3 |
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Question 4 |
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Question 5 |
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Question6 |
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Question 7 |
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Question8 |
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Question 9 |
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Question 10 |
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Question 11 |
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Question12 |
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Question 13 |
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Question 14 |
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Question 15 |
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Question 16 |
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Question 17 |
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Question18 |
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Question19 |
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Question 20 |
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Section B B – Complete the invisible production possible curve.(ppc)
Question B.1 [5]
Steel / Wheat H C B G F I D E J
The diagramme above indicates the production possibilities curve (PPC) of a small fictional country. called Matzikama. Assume that curve ABCD represents the current production possibilities curve, and that Matzikama is producing a combination of wheat and steel represented by point B.
Indicate what the most likely impact of the following developments would be on either the combination of products produced, or on the production possibilities curve itself, by indicating which point, or – in the case of a shift in the PPC – combination of points, best illustrate the result of the development. You must treat each development in isolation in relation to the current PPC.
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Development |
Likely outcome (represented by point/s) / |
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1 |
An improved production technique for the production of wheat is developed. |
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2 |
A movement from point … to point … illustrate increasing opportunity cost of producing wheat. |
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3 |
There is a decrease in the productivity across all sectors of the economy in the country. |
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4 |
Wastage of resources takes place in this economy. |
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5 |
Scarcity /. |
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Question/Vraag B.2 [8]
In order to be able to manage well, you need to be able to measure progress. The table below should indicate
Macroeconomic Goal / |
Indicator used to monitor progress in achieving goal / |
(Select 1 option) / |
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Example: Balance of payments stability / |
Balance of the Current Account / |
Deficit / |
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Balance on the Financial Account / / |
Surplus | |
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Rate of growth in real GDP / |
Less than 3% |
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Between 3 and 4% | ||
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Between 4 and 5% / | ||
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More than 5% | ||
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Price Stability / |
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Less than 3% |
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Between 3 and 5% / | ||
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Above 5% / Meer as 5% | ||
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Less than 25% (Official definition) / |
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Between 25 and 30% (Official definition) / | ||
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Above 30% (Official definition) / | ||
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Gini coefficient / |
Less than 0.3 / Minder as 0.3 |
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Between 0.3 and 0.4 / | ||
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Between 0.4 and 0.5 | ||
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Above 0.5 |
Question/Vraag B.3 [8]
Indicate in the table below whether the proposal listed was a feature of this year’s Budget, and what the result of the implementation of the proposal is likely to be on government revenue and total expenditure (household consumption, investment, government consumption and net exports).
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Budget Proposal / |
Included in this year’s (2008/9) Budget / |
Likely impact on government income if proposal listed was adopted |
Likely impact on Total Expenditure (C+I+G+X-Z) if proposal listed was adopted / | ||||
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E.g. |
The taxation rate on profits earned on retirement funds is to be reduced from 18% to 9%van 18% na 9%. |
Yes / Ja |
No/ Nee
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Decrease / Neem af X |
Increase / Neem toe |
Decrease / Neem af |
No Change / Onveranderd |
Increase / Neem toe X |
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1. |
Personal income tax relief is estimated at R7.7 billion. / |
Yes / Ja |
No/ Nee |
Decrease / Neem af |
Increase / Neem toe |
Decrease / Neem af |
No Change / Onveranderd |
Increase / Neem toe |
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2. |
The public will have to pay a levy of 2c per kilowatt-hour. / |
Yes / Ja |
No/ Nee |
Decrease / Neem af |
Increase / Neem toe |
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3. |
The corporate tax rate was reduced from 29% to 28%. / |
Yes / Ja |
No/ Nee |
Decrease / Neem af |
Increase / Neem toe |
Decrease / Neem af |
No Change / Onveranderd |
Increase / Neem toe |
Question/Vraag B.4 [5]
Question B.5 [8]
Complete the following table using only the information provided: :
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2006 |
2007 |
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Compensation of employees |
R550 bn |
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Gross operating surplus |
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R660 bn |
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GDP at factor cost / |
R1 200 bn |
R1 260 bn |
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Net indirect taxes less subsidies |
R125 bn |
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GDP at market prices / |
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R1 385 bn |
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Final consumption expenditure by households / |
R770 bn |
R810 bn |
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Final consumption expenditure by general government / |
R325 bn |
R340 bn |
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R250 bn |
R230 bn |
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Net exports |
-R20 bn |
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Economic growth rate |
5.2% |
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Population |
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42.6 million |
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GDP at market prices per capita |
R33 125 |
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Consumer Price Index |
100 |
104.6 |
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Consumer price inflation |
- |
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Question B.6 [3]
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Year |
CPI
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PPI |
Nominal GD |
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2001 |
106 |
101 |
R1 250m |
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2002 |
105 |
103 |
R1 245m |
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2003 |
112 |
109 |
R1 360m |
Calculate the following based on the information in the table above
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Headline inflation in 2002 |
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PPI-based inflation in 2003 |
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GDP at constant prices in 20 |
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Question B.7 [3]
Complete the table above from the LFS of March 2007
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Labour market indicators/ |
Levels |
Thousand / Duisend |
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Employed / |
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B |
Unemployed (official definition) / |
4 336 |
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C |
Labour force |
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D |
Not in the labour force |
13 211 |
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E |
Population of working age / |
30 195 |
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F |
Discouraged work-seekers / |
3 503 |
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Rates (percentages) |
Percentages / |
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G |
Unemployment rate |
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