Suppose that you are hired as an economist to advise South African policymakers on the performance of the economy. In order to evaluate the economic performance, the following data is provided:

Economic indicator 2018

2019

Real GDP 4 134

781 4 237 249

Nominal GDP 5 696118 6

001 135

Gini coefficient

0.60.62

Labour force 5 884 433 6 139265

Population 6.5 million 6.51 million

Number of unemployed

1 588 796

1

780356

Balance on current account

-118234 -153176

Balance of financial account

(+)109961

(+)118457

Note: Monetary values expressed in R millions.

You are required to

evaluate the five main macroeconomic objectives, namely economic growth, full

employment, price stability, external stability and the equitable distribution

of income.

In scenario 1,

data on several economic indicators is provided. Using your knowledge of the five macroeconomic objectives and the appropriate measurement for each, evaluate the performance of the South African economy in the period 2019 by answering the following questions. [Tip: Show all calculations to substantiate your answer.]

1. Calculate

and

discuss the measurement used in assessing economic growth. (3)

2.The consumer price index represents the cost of a "shopping basket" of goods and services of a typical or average South African household. Calculate and discuss an alternative measurement used in assessing price stability. (5)

3.Discuss the value and measurement used in assessing equitable income distribution in South Africa. (2)

4.Explain what the values of the current account and financial account imply for South Africa.