3.1 Answer the following questions. 3.1.1 Give any TWO examples of wealth tax. 3.1.2 Why is small business development important to the South African economy? 3.2 Study the extract below and answer the questions that follow. THE AFRICAN GROWTH AND OPPORTUNITY ACT (AGOA) AGOA is a United States Trade Act, enacted on 18 May 2000, and it has since been renewed to 2025. It builds on existing United States trade programmes by expanding the duty-free benefits to qualifying sub-Saharan African (SSA) countries. While the legislation significantly enhances market access to the US for South Africa, it goes against the protectionism policy. (Adapted from /agoa.info) 3.2.1 Identify a term in the extract above, which relates to the removal of import tariffs. 3.2.2 Name ONE other trade protocol of which South Africa is part. 3.2.3 Briefly describe the term protectionism. 3.2.4 Explain a disadvantage when applying the protectionism policy. 3.2.5 How can the African Growth and Opportunity Act (AGOA) negatively affect South Africa?

NSC Economics Protectionism and Free Trade: 3.1 Answer the following questio

3.1 Answer the following questions - NSC Economics - Question 3 - 2023 - Paper 1

Question 3

3.1 Answer the following questions. 3.1.1 Give any TWO examples of wealth tax. 3.1.2 Why is small business development important to the South African economy? ... show full transcript

Worked Solution & Example Answer:3.1 Answer the following questions - NSC Economics - Question 3 - 2023 - Paper 1

Step 1

Give any TWO examples of wealth tax.

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Answer

Wealth taxes are taxes based on the net worth of an individual or entity. Two examples include:

Capital Gains Tax: This tax is levied on the profit from the sale of an asset.
Estate Duty: This tax is charged on the value of the deceased's estate before it is distributed to the heirs.

Step 2

Why is small business development important to the South African economy?

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Small business development is critical for the South African economy due to the following reasons:

Employment Creation: Small businesses provide job opportunities for those who are structurally unemployed.
Income Generation: They create additional sources of income for households, thus helping to alleviate poverty within the community.
Economic Growth: Small businesses contribute to economic growth by increasing competition and efficiency in the market.

Step 3

Identify a term in the extract above, which relates to the removal of import tariffs.

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The term is duty-free.

Step 4

Name ONE other trade protocol of which South Africa is part.

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South Africa is part of the Southern African Custom Union (SACU).

Step 5

Briefly describe the term protectionism.

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Protectionism refers to government policies that restrict international trade to protect domestic industries from foreign competition. These policies may include tariffs, import quotas, and other trade barriers.

Step 6

Explain a disadvantage when applying the protectionism policy.

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A disadvantage of protectionism is that it can lead to retaliation from other countries, causing potential trade wars. Additionally, domestic industries may become overly dependent on such protections, hindering their competitiveness and innovation.

Step 7

How can the African Growth and Opportunity Act (AGOA) negatively affect South Africa?

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The African Growth and Opportunity Act (AGOA) can negatively impact South Africa by:

Erosion of Local Industries: The influx of duty-free imports from the US might overshadow local businesses, leading to job losses.
Dependency on US Markets: It could create an over-reliance on US markets, making South African industries vulnerable to economic fluctuations in the US.

3.1 Answer the following questions - NSC Economics - Question 3 - 2023 - Paper 1

Worked Solution & Example Answer:3.1 Answer the following questions - NSC Economics - Question 3 - 2023 - Paper 1

Give any TWO examples of wealth tax.

Why is small business development important to the South African economy?

Identify a term in the extract above, which relates to the removal of import tariffs.

Name ONE other trade protocol of which South Africa is part.

Briefly describe the term protectionism.

Explain a disadvantage when applying the protectionism policy.

How can the African Growth and Opportunity Act (AGOA) negatively affect South Africa?

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