Question 1 (15 marks)

There was a discovery of the new species of Homo Naledi in South Africa in the year 2017. This resulted in an increase in international tourists visiting South Africa. 1.1 Use a foreign exchange diagram to illustrate and explain the effect of this discovery on the rand-dollar exchange rate, ceteris paribus. (10)

1.2 Explain how your result in Question 1.1 could have affected import prices and inflation in South Africa. (5)