Question 2:

The South African rand has depreciated against major currencies over the last 10 years or so which saw the rand slide to about R17 per 1US$ some time in 2020. Obviously, this has a negative effect on all imported goods as they become more expensive. However, exporters tend to benefit from the weaker rand as their exports become more attractive. SAA imports fuel, spare parts and has other debts outside South Africa which are affected by such changes in exchange rates.

a. Use the Aggregate demand/ Aggregate supply model to explain some of the negative effects on South Africa's output and employment levels stemming from the falling value of the local currency (ZAR) [15 Marks]

b. Discuss how a specific macroeconomic policy change in your country has affected your particular enterprise or business unit [10 Marks].