ECS3701 ASSIGNMENT 2 SEMESTER 1 2026 - DISTINCTION - DUE 17 APRIL 2026

ECS3701 ASSIGNMENT 2 SEMESTER 1 2026 Due 17 April 2026 Source: Reserve Bank holds interest rates in South Africa According to this excerpt, with the recent monetary policy stance on keeping the repo rate unchanged, what effect will this have on the economy? Will this monetary policy approach have a positive, negative, or neutral effect on the economy? Explain your answer. 2.01 (i) Effect of keeping the repo rate unchanged The SARB’s decision to keep the repo rate at 6.75% (prime lending rate at 10.25%) represents a neutral monetary policy stance. In the short run, this has a neutral effect o