ECS3703 ASSIGNMENT 2 2025
DISCLAIMER: THIS IS NOT AN OFFICIAL GUIDE FROM UNISA. THE REPORT IS
NOT PREPARED NOR APPROVED BY UNISA, RATHER REPRESENTS A
POSSIBLE SOLUTION TO THE TASK CONSISTENT WITH THEORY OF ECS3703.
THIS REPORT IS INTENDED TO ASSIST STUDENTS IN GETTING STARTED WITH
THEIR ASSIGNMENT, AND IN NO CASE THIS DOCUMENT SHOULD BE USED
FOR CHEATING. WE BELIEVE THIS WILL BE A GOOD STARTING POINT AS IT
WAS PREPARED BY OUR TEAM OF PROFESSIONAL PRIVATE TUTORS WHO
ARE EXPERTS IN THE FIELD, AND IT WAS PREPARED USING VARIOUS
SOURCES. ANY SIMILARITY WITH ANY EXISTING THEORY OR DISCUSSION BY
OTHER AUTHORS IS EXCUSED. THE AUTHORS HOWEVER DO NOT CLAIM
MONOPOLY TO KNOWLEDGE HENCE MODIFICATION OF THE ANSWERS
CONTAINED IN THIS FRAMEWORK MAY NOT BE PROHIBITED AS IT
CONTRIBUTES TO EXPANSION OF KNOWLEDGE. FOR ANY FURTHER
GUIDELINE ABOUT THE INFORMATION CONTAINED HERE AND THE MODULE
IN GENERAL, CONTACT PASSMATE TUTORIALS.
WE ASSIST WITH OTHER MODULES INCLUDING:
ECSs, FACs, MACs, MNGs, INTs, TRLs, HMEMS, PRMs, PROs, MNBs, DSC, QMI,
MNMs, MNO, MNPs, FIN, PUBs, MNMs, RESEARCH among others.
WE OFFER CLASSES, ASSIGNMENT GUIDELINES, EXAMINATION
PREPARATION, RESEARCH AND RESEARCH PROPOSALS, DISSERTATION
EDITING etc.
OTHER THAN UNISA, WE ALSO ASSIST STUDENTS AT VARIOUS INSTITUTIONS
INCLUDING MANCOSA, REGENT, REGEYNESES, BOSTON, STADIO, OLG, UJ,
UP etc
For any enquiries the following numbers can be used for calling, sms, whatsapp
and telegram
CONTACT PASSMATE TUTORIALS @061 262 1185/068 053 8213/0717 513 144 or
email passmatetutorials@gmail
, ECS3703 ASSIGNMENT 2 2025
QUESTION 1 [15 MARKS]
Foreign Exchange Market and Tariffs
The value of one currency in relation to another is established in the foreign exchange
market (FOREX) by supply and demand (Mankiw, 2021). The Chinese Yuan (CNY) is
being exchanged for the South African Rand (ZAR) here. An increase in Chinese tariffs
for imports from South Africa raises the price of products in South Africa, causing
Chinese demand for imports to fall (Krugman & Obstfeld, 2022). Since Chinese
importers must exchange CNY into ZAR for settlement purposes with exporters,
reduced import demand lowers the demand for ZAR in the FOREX market.
Under a flexible exchange rate, this reduction shifts the demand curve for ZAR to the
left while supply remains constant. The new equilibrium exchange rate (R₂) is lower
than the initial rate (R₁), leading to depreciation of the ZAR and appreciation of the
CNY (World Bank, 2023). Protectionist policies like tariffs thus hurt exporters'
competitiveness and reduce currency demand.
QUESTION 2 [10 MARKS]
Transaction Risk in International Trade
DISCLAIMER: THIS IS NOT AN OFFICIAL GUIDE FROM UNISA. THE REPORT IS
NOT PREPARED NOR APPROVED BY UNISA, RATHER REPRESENTS A
POSSIBLE SOLUTION TO THE TASK CONSISTENT WITH THEORY OF ECS3703.
THIS REPORT IS INTENDED TO ASSIST STUDENTS IN GETTING STARTED WITH
THEIR ASSIGNMENT, AND IN NO CASE THIS DOCUMENT SHOULD BE USED
FOR CHEATING. WE BELIEVE THIS WILL BE A GOOD STARTING POINT AS IT
WAS PREPARED BY OUR TEAM OF PROFESSIONAL PRIVATE TUTORS WHO
ARE EXPERTS IN THE FIELD, AND IT WAS PREPARED USING VARIOUS
SOURCES. ANY SIMILARITY WITH ANY EXISTING THEORY OR DISCUSSION BY
OTHER AUTHORS IS EXCUSED. THE AUTHORS HOWEVER DO NOT CLAIM
MONOPOLY TO KNOWLEDGE HENCE MODIFICATION OF THE ANSWERS
CONTAINED IN THIS FRAMEWORK MAY NOT BE PROHIBITED AS IT
CONTRIBUTES TO EXPANSION OF KNOWLEDGE. FOR ANY FURTHER
GUIDELINE ABOUT THE INFORMATION CONTAINED HERE AND THE MODULE
IN GENERAL, CONTACT PASSMATE TUTORIALS.
WE ASSIST WITH OTHER MODULES INCLUDING:
ECSs, FACs, MACs, MNGs, INTs, TRLs, HMEMS, PRMs, PROs, MNBs, DSC, QMI,
MNMs, MNO, MNPs, FIN, PUBs, MNMs, RESEARCH among others.
WE OFFER CLASSES, ASSIGNMENT GUIDELINES, EXAMINATION
PREPARATION, RESEARCH AND RESEARCH PROPOSALS, DISSERTATION
EDITING etc.
OTHER THAN UNISA, WE ALSO ASSIST STUDENTS AT VARIOUS INSTITUTIONS
INCLUDING MANCOSA, REGENT, REGEYNESES, BOSTON, STADIO, OLG, UJ,
UP etc
For any enquiries the following numbers can be used for calling, sms, whatsapp
and telegram
CONTACT PASSMATE TUTORIALS @061 262 1185/068 053 8213/0717 513 144 or
email passmatetutorials@gmail
, ECS3703 ASSIGNMENT 2 2025
QUESTION 1 [15 MARKS]
Foreign Exchange Market and Tariffs
The value of one currency in relation to another is established in the foreign exchange
market (FOREX) by supply and demand (Mankiw, 2021). The Chinese Yuan (CNY) is
being exchanged for the South African Rand (ZAR) here. An increase in Chinese tariffs
for imports from South Africa raises the price of products in South Africa, causing
Chinese demand for imports to fall (Krugman & Obstfeld, 2022). Since Chinese
importers must exchange CNY into ZAR for settlement purposes with exporters,
reduced import demand lowers the demand for ZAR in the FOREX market.
Under a flexible exchange rate, this reduction shifts the demand curve for ZAR to the
left while supply remains constant. The new equilibrium exchange rate (R₂) is lower
than the initial rate (R₁), leading to depreciation of the ZAR and appreciation of the
CNY (World Bank, 2023). Protectionist policies like tariffs thus hurt exporters'
competitiveness and reduce currency demand.
QUESTION 2 [10 MARKS]
Transaction Risk in International Trade
