ECS1601 Assessment 4 semester 2
ECS1601 Assessment 4
semester 2 with (COMPLETE
ANSWERS) 2025 - DUE 29
October 2025
, Question one. (5 marks) Maximum word count: 100 words 1.1
Suppose you live in South Africa and have the option to buy
proudly South African products or international brands. With
reference to the circular flow of goods and services and the
circular flow of income and spending between households, firms,
government and the foreign sector, provide an explanation as to
why it is better to purchase the proudly South African products
and also explain the opportunity costs of buying international
items instead of those produced locally. (5 marks)
Purchasing proudly South African products supports the circular flow of income
within the local economy, as it ensures that households spend money on locally
produced goods, which helps firms to generate income and wages, boosting the
economy. The government benefits through taxes, and money remains within the
country, promoting growth. In contrast, buying international brands results in
money flowing out of the economy, which could have supported local businesses.
The opportunity cost is the lost economic activity and job creation that could
have been generated by supporting domestic industries.
ECS1601 Assessment 4
semester 2 with (COMPLETE
ANSWERS) 2025 - DUE 29
October 2025
, Question one. (5 marks) Maximum word count: 100 words 1.1
Suppose you live in South Africa and have the option to buy
proudly South African products or international brands. With
reference to the circular flow of goods and services and the
circular flow of income and spending between households, firms,
government and the foreign sector, provide an explanation as to
why it is better to purchase the proudly South African products
and also explain the opportunity costs of buying international
items instead of those produced locally. (5 marks)
Purchasing proudly South African products supports the circular flow of income
within the local economy, as it ensures that households spend money on locally
produced goods, which helps firms to generate income and wages, boosting the
economy. The government benefits through taxes, and money remains within the
country, promoting growth. In contrast, buying international brands results in
money flowing out of the economy, which could have supported local businesses.
The opportunity cost is the lost economic activity and job creation that could
have been generated by supporting domestic industries.
