Question

Question 3 [7]
Identify and briefly describe seven (7) policy measures that have been proposed and
instituted to address structural unemployment in South Africa.

Question 4 [18]
In the aftermath of Covid-19, a further decrease in government expenditure can be expected
to be announced by the minister. Discuss in detail the internal and external effects of such
an expected decrease in government expenditure. In your answer, address the expected
primary effect in terms of the real side of the economy, as well as other monetary effects
expected, such as effects in the money market, the expected foreign reserves adjustment
process and the expected exchange rate adjustment process, all as part of the secondary

Question 6 [17]
Using diagrams, illustrate and explain in detail what the basic idea of macroequilibrium is.
Tip: Use two diagrams next to each other.

Question 7 [14]
7.1. Indicate which variables that are relevant to the IS and LM curves will help you
remember which curve is which. (4)
7.2. Draw a diagram of a typical IS-LM model and on the diagram indicate the changes in
all the variables should there be an increase in aggregate expenditure causing a shift
of the IS curve to the right (indicate the shift in the IS curve on your diagram). Label
the axes properly. (5)
7.3. Interpret the diagram that you have drawn for 7.2 and briefly explain your
understanding of what the IS-LM model is reflecting in terms of macroeconomics. (5)

Question 8 [15]
8.1. Define the balance of payments (BoP) of a country. Also explain what the current
account of the BoP records and what the financial account of the BoP reflects. (6)
8.2. Which important factors determine the volume of imports in a country such as South
Africa? (4)
8.3. What does the term “net exports” mean and what is a direct component of net exports
in real terms? (2)
8.4. Explain in detail what capital flows reflect in terms of the BoP analysis and what flows
are included.

effect

Answer 1

Question 3

                                    Structural unemployment refers to such an unemployment that results from industrial reorganisation which is caused mainly due to change in the technological innovation rather than the fluctuations that are being caused in the supply and demand. South Africa is a nation that has been going through the clutches of this particular type of unemployment for over many years. The following are the various policy measures that have been initiated by the government to overcome this particular type of unemployment in South Africa

· Expanding the share of global goods and services market of South Africa

· Strengthen the labour market institutions of South Africa thereby improving the labour quality

· Promoting employment opportunities in the small employment sectors thereby regenerating the lost employment potential of the nation

· Promoting small business and innovation in the nation

· Increasing the supply of skilled labour which could improve the potential of job creation within the nation by incorporation of domestic employment opportunities

· Address the macro-economic constraints which can improve the economic situation of the nation thereby generating more employment opportunities within the nation

· Promoting the regional development which could reduce the dependency of the nation on external affairs for the development

                                           All the above policy measures have been initiated by the nation so as to improve the economic potential of the nation and hence deal with the structural employment crisis that has been occurring within the nation.