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 © IMM Graduate School of MarketingAssignment: 2

nd Semester 2009 Macro Economics (MAC) 

ASSIGNMENT 2ND SEMESTER : MACRO ECONOMICS (MAC)

MODULES COVERED : Modules 1 - 5

DUE DATE : 3 p.m. Tuesday, 18 August 2009

TOTAL MARKS : 100

INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS

The complete “Instructions to Students for Completing and Submitting Assignments” must becollected from any IMM GSM office, the relevant Student Support Centre or can be downloadedfrom the IMM GSM website. It is essential that the complete instructions be studied prior tocommencing your assignment. The following points highlight only a few important notes.

1) You are required to submit ONE assignment per subject.

2) The assignment will contribute 20% towards the final examination mark, and the other 80%will be made up from the examination.However the examination papers will count out of 100.

3) Although your assignment will contribute towards your final examination mark, you do nothave to earn credits for admission to the examinations; you are automatically accepted onregistering for the exam.

4) Number all the pages of your assignment (page 1 of 4, page 2 of 4, etc.) and write your nameand surname, student number and subject at the top of each page.

5) The IMM GSM requires assignments to be presented in a typed format, on plain A4 paper.Unless otherwise specified, this assignment must be completed within a limit of 1 500 wordsexcluding the bibliography.

6) A separate assignment cover, which is provided by the IMM GSM, must be attached to thefront cover of each assignment.

7) Retain a copy of each assignment before submitting in case the original does not reach theIMM GSM.

8) The assignment due date refers to the day up to which assignments will be accepted formarking purposes. The deadline is 3:00 p.m. on the 18 August 2009. Late assignments will beaccepted, but 25 marks will be deducted from the maximum mark, if received after 3:00 p.m.on the 18 August 2009 and up to 5:00 p.m. the following day – after which no assignments willbe accepted.

9) If you fail to follow these instructions carefully, the IMM Graduate School of Marketingcannot accept responsibility for the return of the assignment. It may even result in yourassignment not being marked. 

Results will be available on the IMM GSM website: www.imm.co.za on Wednesday, 7 October 2009.

8/10/2019 MAC_Assign_Q_2009_2

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 © IMM Graduate School of MarketingAssignment: 2

nd Semester 2009 Macro Economics (MAC) 

SPECIFIC INSTRUCTIONS

Answer ALL the questions.

QUESTION 1  [30]

Explain, with the aid of the circular flow diagram, how the following macroeconomic

objectives are affected when withdrawals exceed injections:

(i) Economic growth (5) 

(ii) Full employment (5) 

(iii) Internal price stability (5) 

(iv) Income distribution and poverty alleviation. (5) 

10 marks for the diagram

QUESTION 2  [40]

How would you explain to a friend or family member the following information about

the South African economy?

(i) The GDP growth fell by 0.5% during the last quarter (10) 

(ii) The national unemployment rate is 25% (10) (iii) Year-on-year inflation declined by 1% in June this year (10) 

(iv) The country’s gold and foreign exchange reserves increased by about

R1-bn between 2007 and 2008. (10) 

QUESTION 3  [20]

Imagine an economy in a stable long-run equilibrium situation. There is an

unexpected increase in the money supply. Assuming no intervention by the Reserve

Bank, explain with the aid of a diagram the likely effect on the money market.

PRESENTATION [10] 

ASSIGNMENT TOTAL: 100