ECS1601 Assignment 4
(COMPLETE
ANSWERS) 2025 -
DUE 15 September
2025
For assistance contact
Email:
, Question 1
Two interventions that would most effectively support economic resilience in Mitchells Plain are
investing in local small and medium enterprises (SMEs) and improving infrastructure.
These interventions strengthen the local circular flow of income. Investing in local SMEs, such
as by providing grants or low-interest loans, keeps money circulating within the community.
Instead of income leaking out to larger, non-local corporations, it's spent on local goods and
services, creating a positive feedback loop of demand and production. This increases local
employment and household income, which further boosts spending and economic growth.
Improving infrastructure, such as public transport and internet connectivity, also supports
economic resilience. It reduces the costs of doing business and makes it easier for residents to
access work and education opportunities. This not only boosts productivity but also makes the
area more attractive to external investment, increasing injections into the local economy and
making it less susceptible to external shocks.
Question 2
Question 2.1
Imposing tariffs on South Africa and Lesotho is not a good thing for their economic growth from
the perspective of the Aggregate Demand-Aggregate Supply (AD-AS) model. 📉
The tariffs act as a trade barrier, making goods from these countries more expensive for U.S.
consumers. This will lead to a decrease in the demand for exports from South Africa and
Lesotho. Since net exports (
X−M
) are a component of aggregate demand (
AD=C+I+G+(X−M)
), a decrease in exports will cause a leftward shift of the aggregate demand curve for both
countries.
This shift from
AD1
to
AD2
(COMPLETE
ANSWERS) 2025 -
DUE 15 September
2025
For assistance contact
Email:
, Question 1
Two interventions that would most effectively support economic resilience in Mitchells Plain are
investing in local small and medium enterprises (SMEs) and improving infrastructure.
These interventions strengthen the local circular flow of income. Investing in local SMEs, such
as by providing grants or low-interest loans, keeps money circulating within the community.
Instead of income leaking out to larger, non-local corporations, it's spent on local goods and
services, creating a positive feedback loop of demand and production. This increases local
employment and household income, which further boosts spending and economic growth.
Improving infrastructure, such as public transport and internet connectivity, also supports
economic resilience. It reduces the costs of doing business and makes it easier for residents to
access work and education opportunities. This not only boosts productivity but also makes the
area more attractive to external investment, increasing injections into the local economy and
making it less susceptible to external shocks.
Question 2
Question 2.1
Imposing tariffs on South Africa and Lesotho is not a good thing for their economic growth from
the perspective of the Aggregate Demand-Aggregate Supply (AD-AS) model. 📉
The tariffs act as a trade barrier, making goods from these countries more expensive for U.S.
consumers. This will lead to a decrease in the demand for exports from South Africa and
Lesotho. Since net exports (
X−M
) are a component of aggregate demand (
AD=C+I+G+(X−M)
), a decrease in exports will cause a leftward shift of the aggregate demand curve for both
countries.
This shift from
AD1
to
AD2
