This document contains the answers and questions that you will need to complete assignment 2 of semester 1 for ECS1601. Please don't hesitate to contact me for further assistance
As a result of more Americans visiting South Africa, we can expect, ceteris paribus
a.
an appreciation of the Rand relative to the Dollar.
b.
a depreciation of the Rand relative to the Dollar.
c.
an appreciation of the Dollar relative to the Rand.
d.
that it will cost South Africans more to visit the United States.
e.
an appreciation of the Dollar relative to all major currencies.
Import tariffs are generally used to protect domestic industries from foreign competition,
they often lead to a(n )___________to society.
a.
net welfare gain
b.
net welfare loss
c.
net economic loss.
d.
net economic profit.
e.
economic growth.
, Suppose that Sandile, a South African trader, imports goods from China and sells them
in South Africa. Suppose also that the Rand appreciates against the Yuan. How would
this impact Sandile’s business?
a.
The demand for Chinese goods by Sandile’s business will decrease because imports from
China become more expensive when the Rand appreciates.
b.
The demand for Chinese goods by Sandile’s business will decrease because imports from
China become more expensive when the Yuan depreciates.
c.
The price of goods that Sandile’s business imports will decrease in terms of the Yuan.
d.
The price of goods that Sandile’s business imports will decrease in terms of the
Rand.
In the 2020 Budget Speech, the National Treasury announced that the import tariff will
decrease from 5.37% in 2019 to 4.40% in 2020, a 0.97% decline. What is the aim of the
import tariffs and what does this imply to the domestic firm’s production?
a.
an import tariff is used to protect domestic firms, a 0.97% decline in import tariff
will discourage domestic production and make imported products cheaper.
b.
an import tariff is used to protect foreign firms, a 0.97% decline in import tariff will
encourage foreign firms to produce more for export to SA.
c.
an import tariff is used to protect domestic firms, a 0.97% decline in imports is too small
to have an impact on the domestic firm’s production.
d.
an import tariff is used to protect domestic firms from trade exploitation, a 0.97% decline
in imports will make imported goods more expensive for domestic firms.
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