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4.1.1 Name any TWO financial incentives used by the South African government to improve industrial development - NSC Economics - Question 4 - 2024 - Paper 1
Question 4
4.1.1 Name any TWO financial incentives used by the South African government to improve industrial development. 4.1.2 Why does the government strive to keep public ... show full transcript
Worked Solution & Example Answer:4.1.1 Name any TWO financial incentives used by the South African government to improve industrial development - NSC Economics - Question 4 - 2024 - Paper 1
Step 1
Name any TWO financial incentives used by the South African government to improve industrial development.
Answer
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Small Business Support Program: This initiative provides financial assistance to small businesses to enhance their growth and sustainability.
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SEDA Technology Program: This program offers support to entrepreneurs through technology transfer and innovation, aiming to boost the industrial sector.
Step 2
Why does the government strive to keep public debt to at least 60% of gross domestic product (GDP)?
Answer
The government aims to control public debt levels to reduce the burden on taxpayers, as high debt can lead to increased interest repayments. Additionally, by maintaining debt levels below 60% of GDP, the government ensures that more resources can be allocated to essential services and development initiatives.
Step 3
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Step 5
Step 6
How can the government directly intervene in the foreign exchange market when the local currency is undervalued?
Answer
The government can intervene by instructing the central bank to sell foreign currency reserves in the market. This action increases the supply of the foreign currency and helps the local currency appreciate.
Step 7
Draw a correctly labelled graph to show the effect of an increase in demand for US dollars in South Africa.
Answer
To illustrate the increase in demand for US dollars:
- Label the x-axis as Quantity of Dollars and the y-axis as Price of Dollars.
- The initial demand curve (D) will shift to the right (D1), causing the equilibrium price to increase from P to P1, resulting in a new equilibrium at Q1.