Managerial Economics:

FORMATIVE ASSESSMENT 2 [100 MARKS]

Answer ALL the questions in this section.

Question 1 (20 Marks)

As a policy analyst employed by the International Monetary Fund (IMF), you are required to prepare the report that is focused on the rapidly rising worldwide public debt levels. The report will cover several countries in both the developing and the developed world (South Africa, Japan, USA, China, Sri Lanka and Greece). Critically evaluate the possible (short and long term) impact of rising public debt levels on South Africa's economic trajectory and performance.

Comment:

• In-text referencing required
• Every discussion or argument to be followed by citation

Question 2 (15 Marks)

South Africa's public debt to GDP ratio pales in comparison to that of countries such as Japan and the USA. Analyse the reasons why Japan and the USA are able to sustain such high levels of debt to GDP

Comment:

• In-text referencing required
• Every discussion or argument to be followed by citation

Question 3 (15 Marks)

South Africa's State Owned Enterprises are responsible for the large debt levels (around R700bn as of May 2022) and this has contributed to South Africa's credit ratings being downgraded. Analyse the feasibility and possible impact of TWO (2) solutions that can be applied to address the SOE public debt.

Comment:

• In-text referencing required
• Every discussion or argument to be followed by citation

Question 4 (20 Marks)

Assess the impact of the structural adjustment programmes on Greece's economy for the period 2012 - 2017

Comment:

• In-text referencing required
• Every discussion or argument to be followed by citation

Question 5 (30 Marks)

5.1 Sri Lanka in May 2022, defaulted on its debt repayment obligations. Briefly discuss the main issues that led to Sri Lanka's inability to meet its repayment schedule. (10 marks)

Comment:

• In-text referencing required
• Every discussion or argument to be followed by citation

5.2 Discuss the measures that the government of Sri Lanka could take to ensure economic recovery and growth (20 marks

Comment:

• In-text referencing required
• Every discussion or argument to be followed by citation