FORMATIVE ACTIVITY $28$: THE GOVERNMENT AND THE ECONOMY $($REVIEW$)$

Answer the questions below US$242910$ SO$4$ AC$1$

$[$Total: $30]$

$1.$ Explain the differences between real and nominal GDP$.$

$(2)$

$2.$ Why is it important to know the growth in real GDP$?$

$(2)$

$3.$ What is the current real GDP per person in South Africa? How has this changed over the past $10$ years?

$(4)$

$4.$ Using the $$rule of $70$ estimate how long it will take for real GDP to double if the growth rate is $6\%.$

$(2)$

$5.$ What factors have impacted on South Africa$$s economy over the past $10$ years? What impact has this had on GDP$?$

$(5)$

$6.$ South Africa compares relatively favourably to other countries in terms of GDP$.$ What does our government need to do to increase our position in the world ranking?

$(4)$

$7.$ Argue for the proposition $$demand determines the level of national output$.$

$(3)$

$8.$ What is the key indicator used by the Reserve Bank to determine the level of interest rates?

$(3)$

$9.$ Discuss why inflation is a $$destructive economic variable$.$

$(5)$