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Answer the following questions - NSC Economics - Question 4 - 2024 - Paper 1
Question 4
Answer the following questions. 4.1.1 Name any TWO financial incentives used by the South African government to improve industrial development. (2 x 2) 4.1.2 Why d... show full transcript
Worked Solution & Example Answer:Answer the following questions - NSC Economics - Question 4 - 2024 - Paper 1
Step 1
4.1.1 Name any TWO financial incentives used by the South African government to improve industrial development.
Answer
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Small Businesses Support Program: This initiative offers funding and resources to small businesses aimed at enhancing their growth and sustainability.
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SEDA Technology Program: This program provides support and guidance to entrepreneurs looking to introduce technological innovations within their industries.
Step 2
4.1.2 Why does the government strive to keep public debt to at least 60% of gross domestic product (GDP)?
Answer
The government aims to maintain public debt at a maximum of 60% of GDP primarily to:
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Reduce the burden on taxpayers: Keeping debt manageable ensures that the repayment of interest does not place undue financial pressure on citizens.
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Limit public debt: This strategy helps ensure that funds are available for other essential needs of the government and to foster economic growth.
Step 3
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Step 5
4.2.3 Briefly describe the term depreciation in relation to exchange rates.
Answer
Depreciation refers to a decrease in the value of a currency compared to another currency. This often occurs due to shifts in the forces of demand and supply, which can be influenced by various economic factors.
Step 6
4.2.4 How can the government directly intervene in the foreign exchange market when the local currency is undervalued?
Answer
The government can intervene through the central bank, which can sell foreign currency in the market. This action can help increase demand for the local currency and promote its appreciation.
Step 7
4.2.5 Draw a correctly labelled graph to show the effect of an increase in demand for US dollars in South Africa.
Answer
To illustrate the effect of an increase in demand for US dollars (USD), draw a standard supply and demand graph with the following elements:
- Y-axis: Price of Dollars
- X-axis: Quantity of Dollars
- Demand Curve (D1): Shift to the right to represent increased demand, labeled as D2.
- Initial Equilibrium Point (e1): Mark the point of initial equilibrium (P1, Q1).
- New Equilibrium Point (e2): Mark the new equilibrium point where the new demand curve intersects the supply curve (P, Q1).
Ensure all axes and curves are correctly labelled for clarity.