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QUESTION 2: MACROECONOMICS 2.1 Answer the following questions. 2.1.1 Name any TWO methods to determine a GDP. (2 x 1) (2) 2.1.2 How can export promotion correct the balance of payment disequilibria? (1 x 2) (2) 2.2 Study the graph below and answer the questions that follow. Price level % AD1 AD AS AS1 A P AD1 AS AD AS1 Real output 2.2.1 What is illustrated in the graph above? 2.2.2 At which point will inflation prevail? 2.2.3 Briefly describe the term new economic paradigm. 2.2.4 What would happen to the output if supply did not respond to the change in demand? 2.2.5 How will the government reduce cost of production to stimulate2.3 Study the table below and answer the questions that follow. NATIONAL INCOME AND PRODUCTION ACCOUNTS OF SOUTH AFRICA (GVA at constant 2010 prices) GROSS VALUE ADDED BY KIND OF ECONOMIC ACTIVITY 2016 (Rm) Primary Sector 298 849 Secondary Sector 550 195 Tertiary Sector 1 945 557 Gross value added at basic prices 2 794 601 Taxation on products 30 600 Subsidies on products 5 900 Gross Domestic Product at market prices A [Adapted from SARB Quarterly Bulletin, March 2017] 2.3.1 Identify the base year used by the SARB above. (1) 2.3.2 Which sector above contributed most towards the gross domestic product of South Africa? (1) 2.3.3 Briefly describe the term gross value added (GVA) at constant prices. (2) 2.3.4 How would the GDP at market prices be converted to GNP at market prices? (2) 2.3.5 Calculate the gross domestic product at market prices (A). (Show ALL calculations.) (4) 2.4 Briefly explain the measures to reduce a deficit on the balance of payments. (4 x 2) (8) 2.5 Why should South Africa follow a policy of free trade? (8) [40]QUESTION 2: MACROECONOMICS 40 MARKS - 30 MINUTES 2.1 Answer the following questions. 2.1.1 Name any TWO member countries of the BRICS trade protocol. (2 x 1) (2) 2.1.2 How can indirect subsidies benefit the export producer? (1 x 2) (2) 2.2 Study the diagram below and answer the questions that follow. BUSINESS CYCLE K .G Index of economic activities D Time 2.2.1 Identify the trend line in the business cycle above. (1) 2.2.2 Which letter represents a trough in the diagram above? (1 ) 2.2.3 Briefly describe the term business cycle. ( 2) 2.2.4 Explain economic activity during phase EF in the business cycle. (2) 2.2.5 How can the length (BF) be used in forecasting of business cycles? (2 x 2) (4)