2.1 State the beginning and end dates of a tax year - NSC Consumer Studies - Question 2 - 2018 - Paper 1

The institution that is responsible for collecting tax in South Africa is the South African Revenue Service (SARS).

The two types of direct income tax are: 1. Pay as you earn (PAYE) 2. Provisional tax.

Inflation is defined as the average increase in prices of goods and services in a year within a country. It indicates the rate at which the general level of prices for goods and services rises, eroding purchasing power.

The instrument that is used to determine inflation is the Consumer Price Index (CPI).

Having a fixed interest rate means that David's payment amount will remain constant over the life of the loan. This stability allows him to budget more effectively since he can anticipate his costs, unlike a fluctuating interest rate, which can increase his payments unexpectedly based on market conditions. If interest rates rise, his payments remain the same, thus making it easier to manage his finances.

David purchased the bed on an instalment sale as he was in need of it immediately and could not afford to pay the full price upfront. An instalment sale allows him to take the bed home while paying it off over time. For the television, he opted for a lay-by agreement because it allows him to reserve the item while paying gradually, making it feasible for him to manage his budget without immediate full payment.

Inflation impacts the purchasing power of money, leading to a situation where people have less disposable income. As inflation rises, the value of money decreases, meaning that it becomes necessary to earn more income to maintain living standards. The South African Reserve Bank plays a crucial role in managing inflation through monetary policy, which involves regulating interest rates and controlling money supply to stabilize the economy. A balance between these factors is essential for economic stability and growth.