Question
South Africa has been adversely affected by Covid-19 since November 2019. According to a report by the Parliamentary Monitoring Group (PMG) from May 2021, the
South Africa has been adversely affected by Covid-19 since November 2019. According to a report by the Parliamentary Monitoring Group (PMG) from May 2021, the Department of Small Business Development (DSBD) gave the Small Enterprise Finance Agency (SEFA) the mandate to administer the SMME Debt Relief Fund as a direct lending facility. DSBD allocated R513 million towards the Relief Fund. a) According to economic theory, what type of fund is this? Discuss, by using supply and demand curves [10 marks] b) Suppose you own one of these businesses. What pricing decisions will you make regarding your products after receiving the fund? What will you base these pricing decisions on? Use diagrams to support your answers [20 marks] c) What impact will this fund have on your output. Use the PPF curve to illustrate [10 marks]
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