ECS1601 Assignment 4 2025
2 2025
Unique Number:
Due date: 15 September 2025
QUESTION 1
Within the circular flow model, households supply labour and consume goods, while firms
provide employment and income. To strengthen economic resilience in Mitchells Plain, two
interventions stand out. First, skills development and training programmes would raise
the quality of labour, increasing employability and productivity, while also boosting
household incomes and consumption, reinforcing flows of demand and supply.
Second, investment in small business support and infrastructure (such as local
markets, transport, and digital access) would expand entrepreneurial opportunities, stimulate
local production, and create jobs. Together, these interventions enhance both supply-side
capacity and demand-side activity, supporting sustained growth.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
Within the circular flow model, households supply labour and consume goods, while
firms provide employment and income. To strengthen economic resilience in
Mitchells Plain, two interventions stand out. First, skills development and training
programmes would raise the quality of labour, increasing employability and
productivity, while also boosting household incomes and consumption, reinforcing
flows of demand and supply.
Second, investment in small business support and infrastructure (such as local
markets, transport, and digital access) would expand entrepreneurial opportunities,
stimulate local production, and create jobs. Together, these interventions enhance
both supply-side capacity and demand-side activity, supporting sustained growth.
QUESTION 2
2.1
Tariffs imposed by the United States on South African and Lesotho exports reduce
the demand for goods from these countries. From the perspective of the Aggregate
Demand–Aggregate Supply (AD-AS) model, this results in a leftward shift of the
Aggregate Demand (AD) curve for both countries.
Exports are a major component of aggregate demand (AD = C + I + G + X − M).
When US tariffs raise the cost of South African and Lesotho exports, demand from
American consumers decreases. This leads to a decrease in export volumes,
reducing net exports and thus aggregate demand.
Impact on the AD-AS Model:
AD shifts left: Lower export demand leads to reduced income for local
exporters and their workers.
Real GDP decreases: With less output being demanded, businesses cut
back on production, slowing economic growth.
2 2025
Unique Number:
Due date: 15 September 2025
QUESTION 1
Within the circular flow model, households supply labour and consume goods, while firms
provide employment and income. To strengthen economic resilience in Mitchells Plain, two
interventions stand out. First, skills development and training programmes would raise
the quality of labour, increasing employability and productivity, while also boosting
household incomes and consumption, reinforcing flows of demand and supply.
Second, investment in small business support and infrastructure (such as local
markets, transport, and digital access) would expand entrepreneurial opportunities, stimulate
local production, and create jobs. Together, these interventions enhance both supply-side
capacity and demand-side activity, supporting sustained growth.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
Within the circular flow model, households supply labour and consume goods, while
firms provide employment and income. To strengthen economic resilience in
Mitchells Plain, two interventions stand out. First, skills development and training
programmes would raise the quality of labour, increasing employability and
productivity, while also boosting household incomes and consumption, reinforcing
flows of demand and supply.
Second, investment in small business support and infrastructure (such as local
markets, transport, and digital access) would expand entrepreneurial opportunities,
stimulate local production, and create jobs. Together, these interventions enhance
both supply-side capacity and demand-side activity, supporting sustained growth.
QUESTION 2
2.1
Tariffs imposed by the United States on South African and Lesotho exports reduce
the demand for goods from these countries. From the perspective of the Aggregate
Demand–Aggregate Supply (AD-AS) model, this results in a leftward shift of the
Aggregate Demand (AD) curve for both countries.
Exports are a major component of aggregate demand (AD = C + I + G + X − M).
When US tariffs raise the cost of South African and Lesotho exports, demand from
American consumers decreases. This leads to a decrease in export volumes,
reducing net exports and thus aggregate demand.
Impact on the AD-AS Model:
AD shifts left: Lower export demand leads to reduced income for local
exporters and their workers.
Real GDP decreases: With less output being demanded, businesses cut
back on production, slowing economic growth.
