Assume that there has been an increase in South Africa's imports from the United States, that has resulted in a depreciation of the Rand against the Dollar.

Graphically illustrate the depreciation of the Rand against the Dollar as mentioned above.

Explain why the increase in the imports will results in a depreciation of the Rand?

Outline the economic effects of a currency depreciation.

Give guidance to the government, with the aid of a graph, on how to avoid such a depreciation of the Rand.

Total 40 marks