Student number:
Name(s) and Surname:
Date submitted:
Total word count:
948
Question 1 [Word count = 99]
For Mitchells Plain, the best way to build a stronger economy is to keep money flowing
within the community. Two things that would help a lot:
First, the government must invest in local projects like fixing roads, parks, and
community centres. This creates jobs straight away, so people have money to spend at
local spaza shops and businesses, which keeps the cash circulating.
Second, we need to help people start their own small businesses. If we provide training
and small loans for things like bakeries, hair salons, or vegetable gardens, it means we can
produce more of what we need right here. This creates jobs and makes sure the money we
, spend benefits our neighbours, not some big chain store elsewhere. It makes our local
economy more independent and resilient.
Question 2 [Word count = 448]
Question 2.1 [8 Marks]
My friends at the spaza are wrong; this is bad news for us and for Lesotho. Here’s why,
using the AD-AS model we learned.
Those massive US tari s make our exports, like cars or fruit, way more expensive for
Americans to buy. So, they’ll buy less from us. Since exports are a big part of our
country's total spending (Aggregate Demand), this means our overall demand drops. On
the graph, the entire AD curve shifts to the left.
When AD shifts left, it means we’re producing and selling less stu . This leads to lower
economic growth (our GDP falls) and could also mean lower prices. In reality, for a country
like Lesotho that relies heavily on selling things to the US, this could mean factories
shutting down and people losing their jobs. It’s a fast track to a recession.
Name(s) and Surname:
Date submitted:
Total word count:
948
Question 1 [Word count = 99]
For Mitchells Plain, the best way to build a stronger economy is to keep money flowing
within the community. Two things that would help a lot:
First, the government must invest in local projects like fixing roads, parks, and
community centres. This creates jobs straight away, so people have money to spend at
local spaza shops and businesses, which keeps the cash circulating.
Second, we need to help people start their own small businesses. If we provide training
and small loans for things like bakeries, hair salons, or vegetable gardens, it means we can
produce more of what we need right here. This creates jobs and makes sure the money we
, spend benefits our neighbours, not some big chain store elsewhere. It makes our local
economy more independent and resilient.
Question 2 [Word count = 448]
Question 2.1 [8 Marks]
My friends at the spaza are wrong; this is bad news for us and for Lesotho. Here’s why,
using the AD-AS model we learned.
Those massive US tari s make our exports, like cars or fruit, way more expensive for
Americans to buy. So, they’ll buy less from us. Since exports are a big part of our
country's total spending (Aggregate Demand), this means our overall demand drops. On
the graph, the entire AD curve shifts to the left.
When AD shifts left, it means we’re producing and selling less stu . This leads to lower
economic growth (our GDP falls) and could also mean lower prices. In reality, for a country
like Lesotho that relies heavily on selling things to the US, this could mean factories
shutting down and people losing their jobs. It’s a fast track to a recession.
