Exam (elaborations)
ECS3701 Assignment 2 Semester 2 2023 (767135)
- Course
- Institution
This document contains suggested solutions & detailed explanations. For assistance call or .
[Show more]
1 review
By: marole801 • 7 months ago
Seller
Follow
knowledgehut
Reviews received
Content preview
ECS3701MONETARY ECONOMICS
ASSIGNEMNT 02 SEMESTER 1 2022
QUESTION 2
2.01.
(a) As an economist, what advice would you give the South African Reserve Bank
(SARB) regarding the continuous increase in interest rates? In your answer indicate
whether you think the SARB MPC is doing the right thing. Explain why and what can 2
be done better, if any. If you believe this move is correct, explain why you think this is
so.
In general, raising interest rates can help to reduce inflation by making borrowing more
expensive, which can reduce demand and slow down economic activity. On the other hand,
lowering interest rates can encourage borrowing and spending, which can stimulate economic
growth but may also lead to higher inflation.
Based on Governor Lesetja Kganyago's statement, the SARB is committed to maintaining its
focus on price stability through flexible inflation targeting. This approach suggests that the
bank may be more inclined to raise interest rates to curb inflation rather than lower them to
stimulate growth.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller knowledgehut. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.87. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
81531 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now