Economics IB (ECS1601)

ECS1601 ASSESSMENT 4 2025 From the perspective of the AD-AS model, the imposition of high US tariffs (30% on South Africa, 50% on Lesotho) is a significant negative shock, primarily to Aggregate Demand (AD) for these economies. Impact on Net Exports (NX): A tariff makes South African and Basotho goods more expensive for American consumers. This leads to a decrease in the quantity of exports demanded by the USA. Since Net Exports (Exports - Imports) are a direct component of Aggregate Demand...

ECS1601 ASSESSMENT 4 2025 The Monetary Transmission Mechanism describes how a change in central bank policy (like the repo rate) affects the economy. • The Intervention: The US tariffs cause a negative demand shock in South Africa, leading to lower economic growth (as shown in 2.1). • SARB's Response: The South African Reserve Bank (SARB) might decrease the repo rate to stimulate the economy. A lower repo rate reduces commercial banks' funding costs, leading to lower market inter...

ECS1601 ASSESSMENT 4 2025 To support economic resilience in Mitchells Plain, interventions must inject money into the circular flow and stimulate local production. Two highly effective interventions would be: Government Investment in Local Infrastructure (Injection - Investment 'I') A government-funded programme to upgrade basic infrastructure (e.g., water, electricity, public spaces) and invest in human capital through targeted skills training. This directly injects money into the fl...

ECS1601 ASSESSMENT 4 SEMESTER 2 ANSWERS 2025

ECS1601 ASSIGNMENT 4 FOR 2025 - DUE 15 SEPTEMBER 2025

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ECS1601 ASSIGNMENT 3 SEMESTER 2 2025

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