RSK4804
ASSIGNMENT 1 (SEMESTER 1)
DUE DATE: 26 April 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than 26 April 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
Question 1 [20]
1. Explain why credit is considered a powerful driver of the economy. (5)
ANSWER:
Credit is a powerful driver of the economy due to its ability to facilitate economic activities beyond
the limitations of available cash. Here are some key reasons why credit is considered crucial:
• Stimulating Economic Growth: By providing access to capital, credit enables businesses to
invest in expansion, innovation, and infrastructure. This investment stimulates economic
growth by creating jobs, increasing productivity, and driving consumption.
• Expanding Consumer Purchasing Power: Credit allows consumers to make purchases
beyond their immediate financial means, such as buying a house or a car. This boosts
demand for goods and services, fueling economic activity.
• Supporting Entrepreneurship: Access to credit is essential for entrepreneurs to start and
grow their businesses. It enables them to fund business ideas, purchase equipment, and
cover operating expenses, fostering innovation and competition in the market.
ASSIGNMENT 1 (SEMESTER 1)
DUE DATE: 26 April 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than 26 April 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
Question 1 [20]
1. Explain why credit is considered a powerful driver of the economy. (5)
ANSWER:
Credit is a powerful driver of the economy due to its ability to facilitate economic activities beyond
the limitations of available cash. Here are some key reasons why credit is considered crucial:
• Stimulating Economic Growth: By providing access to capital, credit enables businesses to
invest in expansion, innovation, and infrastructure. This investment stimulates economic
growth by creating jobs, increasing productivity, and driving consumption.
• Expanding Consumer Purchasing Power: Credit allows consumers to make purchases
beyond their immediate financial means, such as buying a house or a car. This boosts
demand for goods and services, fueling economic activity.
• Supporting Entrepreneurship: Access to credit is essential for entrepreneurs to start and
grow their businesses. It enables them to fund business ideas, purchase equipment, and
cover operating expenses, fostering innovation and competition in the market.
