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3.1.1 Name any TWO types of consumer inflation - NSC Economics - Question 3 - 2022 - Paper 2
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3.1.1 Name any TWO types of consumer inflation. 3.1.2 How do households benefit from tourism? 3.2 Study the information below and answer the questions that follow... show full transcript
Worked Solution & Example Answer:3.1.1 Name any TWO types of consumer inflation - NSC Economics - Question 3 - 2022 - Paper 2
Step 1
3.1.1 Name any TWO types of consumer inflation.
Answer
Two types of consumer inflation include:
- Headline Inflation (CPI): This measures the total inflation in the economy by taking into account the prices of all goods and services.
- Core Inflation: This excludes certain items that face volatile price movement, primarily food and energy, providing a clearer view of the underlying inflation trend.
Step 2
3.1.2 How do households benefit from tourism?
Answer
Households benefit from tourism in various ways:
- Direct employment opportunities created for individuals in the tourism sector, such as tour guides and hotel staff.
- Indirect benefits come from various businesses like restaurants and shops that thrive due to tourist spending.
- Tourism development can lead to improved infrastructure, such as roads and public services, enhancing living standards.
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3.2.4 Explain the importance of measuring inflation in the economy.
Answer
Measuring inflation is crucial for several reasons:
- It helps policymakers determine if inflation is within acceptable limits, guiding monetary policy decisions.
- Inflation measurement aids in adjusting wages and contracts for cost of living increases.
- Understanding inflation trends supports economic planning and investment decisions.
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3.2.5 Use the information in the table above to calculate the inflation rate from 2020 to 2021.
Answer
To calculate the inflation rate from 2020 to 2021, use the formula:
[ \text{Inflation Rate} = \frac{\text{CPI in 2021} - \text{CPI in 2020}}{\text{CPI in 2020}} \times 100 ]
Substituting the values:
[ \text{Inflation Rate} = \frac{109.5 - 107}{107} \times 100 \approx 2.34% ]
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3.3.4 Why is tourism growth important to the government?
Answer
Tourism growth is vital for the government because it:
- Expands the tax base which enhances revenue collection through hotel taxes, tourism levies, and increased consumption tax.
- Creates employment opportunities which reduce unemployment rates.
- Promotes international relations and investments that diversify the economy.
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3.3.5 How can crime as a socio-economic issue negatively influence the tourism sector?
Answer
Crime can negatively influence the tourism sector by:
- Diminishing the perception of safety for tourists, leading to decreased visitor numbers.
- Reducing the profits of tourism businesses, which may lead to layoffs and reduced services.
- Affecting overall economic growth as tourism is a major contributor to the local economy.
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3.4 Discuss the reasons for the growth of the tourism industry in South Africa.
Answer
Several reasons contribute to the growth of the tourism industry in South Africa:
- Increased disposable income allows more individuals to spend on tourism activities.
- Flexible working hours enable people to travel more frequently.
- Enhanced awareness of attractions encourages domestic travel.
- Improvements in transport and accommodation make travel easier and more accessible.
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3.5 How would an increase in the prices of imported key inputs, such as oil, affect the domestic economy?
Answer
An increase in the prices of imported key inputs like oil would:
- Raise the cost of production for manufacturers, which can lead to higher consumer prices.
- Result in inflationary pressures within the economy as businesses pass on costs to consumers.
- Potentially increase unemployment as businesses adjust to rising operating costs through layoffs or reduced hiring.