SECTION B – CASE STUDY

Read the scenario below and answer the questions that follow:

South Africa has a negative trade balance with the East (Asia). The value of imports from the East is more than the value of the goods that South Africa exports to Asia. This means that the trade balance or terms of trade is not in favour of South Africa. This is not a uniquely South African phenomenon. Part of the reason for the trade war between the United States and China is due to the fact that terms of trade tend to be skewed in favour of China.

Source: Examiner

4BQuestion 1

1.1 Use an appropriate diagram to illustrate and explain the effect of the scenario above on the foreign exchange market. (8)

1.2 Discuss the three (3) policy options available to South Africa to mitigate against the outcome in 1.1. (6)

1.3 Briefly discuss the effect of the trade wars between China and the United States on the South African current account. (6)

4. Go to the eText and pull out a thorough definition of consumer choice. What is this concept? How does utility tie in with this concept? Explain the income and substitution effects. Also explain how they relate to consumer choice.

Explain the difference between the two circuits, C-M-C and M-C-M.

how Data is the foremost character required for healthcare data analytics. Discuss the various data quality characteristics or dimensions that govern data quality.n

Is it true that the Fed can offset the impact on output of a fiscal expansion using open market operations?

You believe that capital markets are semi-strongly efficient. McDonald's announces stronger than expected quarterly earnings. What is likely to happen to the share price? Is there a way to profit from the announcement? What if the strong earnings were expected, what would happen to the share price?

could you please explain in detail ?

Use PWs to calculate the benefit/cost ratio of i=5% for a highway project. The first cost is $150,000 and the O&M costs are $5000 per year. There is no salvage value after 20 years. Time savings to users are worth $35,000 per year, and neighborhood disruption is a disbenefit of $10,000 per year. Is this project attractive?

Define bank capital and key measures of bank profits and returns.

Consider the following Data: MPS = .2 Autonomous spending is 100 What is the consumption function?

The glossary assignment is divided into three parts and spread out throughout different units. The second covers terms from F to L. Please use your online research skills to define each term in one to three sentences and provide a brief example in your own words.

Write in your own words and a clear example. You will receive zero if you merely cut and paste a definition. Use the examples listed above to guide you regarding length and complexity.

Treat this as preparation for the unit test.

• Mixed Economy
• Monopoly
• NGO
• Opportunity cost
• Protectionism
• Recession
• Recovery
• Sanction
• Trade Balance
• Trading Bloc
• Trade Surplus
• Trade War

Suppose the law changes such that individuals can contribute twice as many dollars per year to their Individual Retirement Accounts and avoid paying taxes on this money until they retire. This will cause a shift in the                            [ Select ]                       ["supply of", "demand for"]         funds curve and as a result the equilibrium interest rate will                            [ Select ]                       ["increase", "decrease"]         .

Suppose the law changes and the corporate income tax rate has been cut in half. As a result we can expect a shift in the                            [ Select ]                       ["supply of", "demand for"]         funds curve and as a result the equilibrium interest rate will                            [ Select ]                       ["increase", "decrease"]         .

Suppose both of these changes happen at the same time. As a result we can expect the equilibrium interest rate to                            [ Select ]                       ["increase", "decrease", "uncertain"]         and the equilibrium quantity of funds supplied and demanded to                            [ Select ]                       ["increase", "decrease", "uncertain"]         .

Suppose an individual has a job that pays $50,000/year. With a 5% probability, next year their wage will be reduced to $20,000/year.

a. What is their expected next year?

b. Suppose that the individual can insure themselves against the risk of reduced consumption next year. What would be the actuarially fair insurance premium?