he bankingregulator saysthevirtual currencythatwill be exchangeableonaone-to-onebasis with

physical cashwouldwork inasimilar way totheexistingmobilemoneyproductinthemarket,with

users able totransfer it betweenwallets oraccounts.

1.1 Read the following extract and answer questions 1.1 and 1.2.

Pay rises offered despite Bank of England plea for restraint over inflation Employers are set to increase wages at their fastest pace in almost a decade this year despite a plea for pay restraint from the governor of the Bank of England. Some 46 per cent of companies struggling to keep hold of workers have already raised the pay of incumbent staff, according to research, and 40 per cent are planning to do so in future. Source: https://www.thetimes.co.uk/article/pay-rises-offered-despite-bank-of-england-plea-for-restraint[1]over-inflation-xhf8dbn5b Accessed: 14/02/222

Which of the following macroeconomic objectives is being pursued by the Bank of England? (4 Marks)

a) Price stability

b) Full employment

c) Economic growth

d) Wage rate stability

1.11 Read the following extract and answer the question. Government takes Huawei South Africa to court over employment equity violations The Department of Employment and Labour has filed court papers against Huawei Technologies South Africa due to non-compliance with employment equity policies. Huawei Technologies South Africa was audited in 2020 and found to be non-compliant in that they employ approximately 90% foreign nationals, which violates the Employment Equity Policy (EAP), the department said in a statement on Friday (11 February)... Source: https://businesstech.co.za/news/technology/557498/government-takes-huawei-south-africa-to-courtover-employment-equity-violations/ Accessed: 14/02/22

The above action by President Cyril Ramaphosa is an example of... (4 Marks)

a) Market participation.

b) Public provision of goods and services.

c) Regulation.

d) Government spending

1.12 Read the following extract and answer the question that follows.

CBK tips new digital shilling to take on high M-Pesa charges The proposed Central bank digital currency (CBDC) will help bring down the transaction fees currently charged on digital payments in what could make it the biggest competitor to Kenya's mobile money sector. The banking regulator says the virtual currency that will be exchangeable on a one-to-one basis with physical cash would work in a similar way to the existing mobile money product in the market, with users able to transfer it between wallets or accounts. Source: https://www.businessdailyafrica.com/bd/economy/cbk-tips-new-digital-shilling-to-take-on-high-m-pesacharges-3715540 Accessed: 14/02/22

The Kenyan Central Bank in its aim above will ultimately... (4 Marks)

a) ... reduce the amount of M2 money.

b) ... reduce the amount of bank notes and coins in circulation.

c) ... increase the amount of M1 money.

d) ... reduce the amount of bank notes and coins.

1.19 Read the following extract and answer questions 1.19 and 1.20.

Rand's remarkable resilience inflicts pain on its doubters The rand seems to no longer follow the rules of the emerging-markets playbook, according to an expert. While many investors expected the rand to buckle in the face of rising US Treasury yields and prospects of a more aggressive pace of Federal Reserve hikes, the currency has done the opposite. The rand is sometimes referred to in currency market circles as "the rattler", because of its habit of snapping back hard in the opposite direction to a big move. There is a reason South Africa's currency is called "the rattler". While many an investor expected the rand to buckle in the face of rising US Treasury yields and prospects of a more aggressive pace of Federal Reserve hikes, the currency has done the opposite. It's just posted its fifth weekly gain, causing pain for those who have bet against it. "In a risk-off and volatile environment, the rand used to be one of the weakest currencies," said Milan-based investor Roberto Bagnato at Immobiliare Quadronno, a market veteran of more than 40 years. "It was easy to short then because the South African Reserve Bank has a tradition of making no intervention to defend the currency."

Commodity play

Lars Merklin, senior analyst at Danske Bank in Copenhagen, said the rand may be getting help from robust commodity prices... Source: https://www.poundsterlinglive.com/zar/15791-south-african-rand-s-dollar-and-commodity-headwindsrisk-lifting-usd-zar-to-15-0 Accessed: 26/08/21

The view held by Roberto Bagnato is that historically the $/ZAR exchange rate is... (4 Marks)

a) A fixed exchange rate.

b) A floating exchange rate.

c) A managed floating exchange rate.

d) A real exchange rate.

1.20 South Africa trades in commodities... (4 Marks)

a) For political pressure

b) Due to its absolute advantage in producing commodities

c) Due to its comparative advantage in producing commodities

d) To invest in the global economy