ECS1601 Assignment 5 Semester 1 2023 (Written)

ECS1601
Assignment 05
Semester 01 2023


Assessment Type: Written and calculation Questions.
Due Date: 10 May 2023
Total: 40 Marks


Question 1 Maximum word count: 100 words


1.1.
In terms of the circular flow of goods and services, when households purchase locally
produced goods, the demand for those goods increases, which can lead to an increase
in production and employment opportunities within the local economy.

In terms of the circular flow of income and spending, purchasing proudly South African
products can increase the income of local firms and households. When local firms
receive more income, they can invest in new capital and technology, which can lead
to further increases in production and employment opportunities.

On the other hand, if households purchase international brands instead of locally
produced goods, the demand for local products decreases, which can lead to a
decrease in production and employment opportunities.

The opportunity cost of buying international items instead of those produced locally is
the potential loss of economic growth and employment opportunities within the local
economy.