Assignment 1 specification

Qualification
Module code
NQF level
Semester
Assessor
Copy-editor
Educational advisor
Assignment title
Issue date

Bachelor of Commerce
C_COEC121
Module name
5
Credit value
2/2015
Year
Nerina Bester
Internal verifier
Carol Fofo
Pierre Dietrichsen
Macroeconomics in action
13 17 July
Submission date

Economics 1B
10
1
Anton Briel

24 28 August

Note
Remember to keep a copy of all submitted assignments.
All work must be typed.
*

All work must be submitted to Turnitin and the full report must be submitted with the
assignment.
Each assignment must include a cover page.
Use the cover sheet template for the assignment. This is available from your lecturer.

Students are not allowed to offer their work for sale or to purchase the work of other
students. This includes the use of professional assignment writers and websites, such as
eBay. If this should happen, CTI Education Group reserves the right not to accept
future submissions from a student.

Essential embedded knowledge and skills required of students

Report-writing skills
Ability to analyse scenarios/case studies
Understanding subject field concepts and definitions
Ability to apply theoretical knowledge to propose solutions to real-world
problems
Resource requirements
A device with Internet access for research
A desktop or PC for typing assignments
Access to a library or resource centre

Refer to the CTI Plagiarism Policy, which is available from your lecturer.

Delivery requirements (evidence to be presented by students)

2

A typed assignment
A Turnitin Report

Useful websites

Bookboon at: http://bookboon.com/

Business Open Learning Archive (BOLA) at:
http://business.highbeam.com/137662/arti
cle-1G1-54905587/bola-business-openlearning-archive
EBSCOhost online research databases at:
http://www.ebscohost.com/
Free Management Library: an online
integrated library for personal, professional
and organisational development at:
http://managementhelp.org/
Google Books at:
http://books.google.co.za/

Google Scholar at:

http://scholar.google.co.za/

An online book publishing company that

provides students with free access to ebooks in a wide variety of subject fields,
including Marketing and Human Resources
Management
A database, created by Brunel University
(Business Division), containing newspaper,
magazine and journal articles related to
business studies
A research database containing online
information resources, including 375 full-text
and secondary databases
An online library containing information on
topics related to business, management and
organisational development; each topic has
additional recommended books in the library
A Google service that searches the full text
of books and magazines that Google has
converted into digital format, stored on its
(digital) database
A search engine that indexes the full text of
scholarly (scientific) literature pertaining to
a variety of disciplines and in different
formats, including online journals and
scholarly textbooks

Refer to the CTI Programme Handbook for more guidance (available on e-active).

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A word of caution

Information available on the World Wide Web (WWW) is not necessarily

reliable or of a high academic standard. Therefore, it is essential that
you verify online information by comparing such to information in
reliable information sources, such as accredited (academic) journals and
relevant textbooks written by subject experts.
Criteria assessed
This is the only assignment for this module. The following criteria
are assessed in this assignment:
LO1
AC1.1
AC1.2
AC1.3
AC1.4
LO2
AC2.2

AC2.3
AC2.4
AC2.5

Distinguish the measures available to assess the

performance of an economy
Provide an overview of the current state of the economy in South
Africa
Apply the five macroeconomic objectives in order to evaluate the
performance of an economy
Explain the functioning of each of the five macro-economic
objectives individually
Explore the dynamic relationship between the five
macroeconomic objectives as well as their dependencies
Illustrate the functioning of macroeconomic tools and
their impact on an economy
Demonstrate the way in which national income figures
particularly gross domestic product (GDP) can indicate
economic wellbeing product (GDP) can indicate economic
wellbeing
Appraise the usefulness of aggregate demand (AD) and
aggregate supply (AS) analysis in illustrating the likely impact on
economic growth and inflation
Illustrate the way in which the Keynesian model can be used to
indicate the likely impact of an event on production and,
therefore, income levels of an economy
Explain the importance of the monetary sector for any economy

C_COEC121 Assignment specification| V1.0

Question no.
1
2
2
2
Question no.
3

4
5
4

Page 3 of 12

Question 1
Scenario 1
Study the scenario and answer the question that follows.
20 Year Review: South Africas success story 11 March 2014
Compared with many emerging economies, South Africa has a good story to tell based
on its achievements over the past 20 years, President Jacob Zuma said at the launch of
the governments 20 Year Review in Pretoria.
This Review reflects on South Africas progress in reconstruction and development since
1994, and on the challenges facing the country as it enters its third decade of democracy.
President Zuma said South Africa had done well in improving the lives of its people through
pro-poor economic interventions, and in building social cohesion, after inheriting the
apartheid legacy in 1994.
The biggest barrier to further increasing social cohesion is the remaining inequality in
society, which needs to be attended to further, President Zuma said and added: Going
forward, we should commit to working together further to implement the National
Development Plan (NDP) to deal with the remaining challenges and take our country
forward.
President Zuma said that the Reconstruction and Development Programme (RDP) that was
introduced by the democratic government after 1994 had benefitted millions of South
Africans through social security programmes, subsidised housing, and the extension of
services such as electricity and water, quality education and health care.
Human rights
South Africans now enjoyed basic human rights that restored their dignity after the
adoption of the Constitution in 1996. Thanks to our progressive Constitution, we enjoy
freedom of movement and of association; the right to own property; the right not to be
detained without trial; freedom of expression and freedom of the press, religious freedom
and freedom of sexual orientation, President Zuma noted.
Women have equal rights before the law, which did not exist before 1994. Workers have
20 years of enjoying rights, including trade union workplace organising, collective
bargaining, equal pay for equal work, health and safety, affirmative action, skills
development, minimum wages for workers in vulnerable sectors, the right to strike, and
the right to peaceful protest.
Economic growth
On the economy, President Zuma said that despite having inheriting a bankrupt economy in
1994, South Africas growth had averaged 3.2% from 1994 to 2012, a marked improvement
over pre-1994 growth rates, while the number of people in employment grew by
approximately 60%, or 5.6-million people, between 1994 and 2013.
South Africa still faced challenges inherited from apartheid, including the uneven distribution
of land; the after-effects of Bantu education, unemployment and poor economic growth.
However, partnerships between the government, labour and business,

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combined with the integration of the National Development Plan, would go a long way
towards carrying the country forward.
Since the mid-2000s, the government had placed an emphasis on investing in economic
infrastructure such as ports, rails, dams and power stations. Investment in infrastructure,
which has also been identified as a key jobs-driver, had increased dramatically over the
past five years.
Social stability
At the same time, President Zuma said, the country had made progress in providing social
services such as health care, education and housing. Over eight-million school children
were now beneficiaries of no-fee schools, while nine-million were being fed through the
schools feeding scheme.
In addition to free basic healthcare, more than 1 500 healthcare facilities had been built
and existing ones revitalised over the past 20 years. One of the major challenges that
confronted the democratic government was the rapid rise in the HIV epidemic, President
Zuma said. The countrys improved response to HIV and Aids and TB has resulted in
dramatic improvements in health outcomes.
The Reconstruction and Development Programme had resulted in about 2.8-million
government-subsidised houses being distributed and over 875 000 serviced sites being
delivered, with 56% of housing subsidies being allocated to woman-headed households
This had given more than 12-million South Africans access to accommodation, and
increased the proportion of people living in formal housing from 64% in 1996 to 77% in
2011.
We have succeeded because of the hard work of all our people who contributed in various
ways to rebuilding their country, President Zuma said. We are honoured to place before
the country this 20 Year Review, which provides evidence in this regard. We trust that it
will be useful in assessing the path we have travelled thus far, and in moving the country
forward.
Source: SouthAfrica.info. 2015. 20 Year Review: South Africa's success story. [Online]
Available at: http://www.southafrica.info/news/20years-review2.htm#.VRj5P_mUfeI
[Accessed: 30 March 2015]

Instructions
1.1
Summarise the article by SouthAfrica.info and identify the ten
most important facts from the article. Your summary should not
merely list the subheadings. It should highlight the most important
aspects. Also note your summary should be presented in a wellwritten paragraph and not a bulleted list. [AC1.1]
(10 marks)

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1.2
The majority of South African macro-economic variables
indicate that on an economic front progress has been made after two
decades of democracy.
a. Identify two Internet articles that agree with this statement.
These external sources should, however, not be based on the
same government press release. [AC1.1]
b. Provide the bibliographic entry of the two articles, according to the
Harvard referencing method. [AC1.1]
(6 marks)
Question 2
Scenario 2
Study the scenario below and complete the following tasks:
Economic growth alongside reducing poverty
South Africas macroeconomic objectives include economic growth, full employment, price
stability, and balance of payments stability, alongside the key political and economic
objective of reducing inequality in the economy. Achieving these objectives often means
trade-offs.
Source: Republic of South Africa: Department of Environmental affairs. 2007. South
Africa's macro-economic objectives: Economic growth alongside reducing poverty.
[Online] Available at: http://soer.deat.gov.za/337.html [Accessed: 30 March 2015]

Write a report on the five macroeconomic objectives referred to in the

scenario and South Africas current performance in each measure [AC1.2,
AC1.3 and AC1.4].
(36 marks)
The following guidelines should be adhered to when writing your report:

The report should consist of between 1 500 2 000 words.

The report should have both an introduction and conclusion.
All five the macro-economic objectives should be explained theoretically

South Africas current performance in relation to the five objectives

should also be critically evaluated.
Make use of headings and sub-headings to ensure a logical discussion.

All facts that are not common knowledge should be referenced using
the Harvard Method (in-text references used in the report should be
included to bibliography of this assignment).
At least five external information sources should be used.

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The following rubric will be used to assess the report:

Marking rubric for report on macro-economic objectives

Introduction

Economic
growth

Full
employment

Price
stability

No
introduction

No reference
is made to
the topic or
purpose of
the report

Topic and
purpose is
stated but
inappropria
te
Provided an
explanation
of the
objective
including
how to
measure
the
objective
and why
this the
objective is
important
Provided an
explanation
of the
objective
including
how to
measure
the
objective
and why
this
objective is
important
Provided an
explanation
of the
objective
including
how to
measure
the
objective
and why
this
objective is
important

Omitted this
macroeconomic
the
objective

Omitted this
macroeconomic
objective

Omitted this
macroeconomic
objective

Provided a
basic
explanation
or definition
of the
objective

Provided a
basic
explanation
or definition
of objective

Provided a
basic
explanation
or definition
of objective

C_COEC121 Assignment specification| V1.0

3
Topic and
purpose is
stated and
appropriate
Provided an
explanation of
the objective,
including
measurement
and
importance,
as well as
SAs current
data for that
measure

Mark
out of 4

4
Topic and
purpose is
stated and
excellently
described
Provided an
explanation of
the objective,
including
measurement
and
importance,
current data
and own view
or opinion

Provided an
explanation of
the objective,
including
measurement
and
importance,
as well as
SAs current
data for that
measure

Provided an
explanation of
the objective,
including
measurement
and
importance,
current data
and own view
or opinion

Provided an
explanation of
the objective,
including
measurement
and
importance,
as well as
SAs current
data for that
measure

Provided an
explanation of
the objective,
including
measurement
and
importance,
current data
and own view
or opinion

Page 7 of 12

Balance of
payments
stability

Reducing
inequality

Use and intext

reference of
external
information
sources

Omitted this
macroeconomic
objective

Omitted this
macroeconomic
objective

Provided a
basic
explanation
or definition
of objective

Provided a
basic
explanation
or definition
of objective

Provided an
explanation
of the
objective
including
how to
measure
the
objective
and why
this
objective is
important
Provided an
explanation
of the
objective
including
how to
measure
the
objective
and why
this
objective is
important
Used five
external
information
sources
which are
correctly intext
referenced

Provided an
explanation of
the objective,
including
measurement
and
importance,
as well as
SAs current
data for that
measure

Provided an
explanation of
the objective,
including
measurement
and
importance,
current data
and own view
or opinion

Provided an
explanation of
the objective,
including
measurement
and
importance,
as well as
SAs current
data for that
measure

Provided an
explanation of
the objective,
including
measurement
and
importance,
current data
and own view
or opinion

Used five
external
information
sources which
are correctly
in-text
referenced
and can be
found in
Bibliography

Used more
than five
external
information
sources which
are correctly
in-text
referenced
and can be
found in
Bibliography
Both coherent
and linked to
introduction
with clear own
opinion

Used less
than 5
external
information
sources

Used 5
external
information
sources

Conclusion

No
conclusion

No link to
introduction
and
incoherent

Either
incoherent
or not
linked to
introduction

Both coherent
and linked to
introduction

Technical
quality of
report:
length, use
of
subsections,
coherence
and flow

Poor

Fair

Average

Good

Excellent

Total mark for Question 2

C_COEC121 Assignment specification| V1.0

36

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Question 3
Case study
Read the case study and complete the questions that follow:
Not by bread alone: Growth in national income is a poor predictor of welfare
16 March 2013
If you look at countries social and economic progress since 1990, you will find that, in
most cases, the economic progress is in line with their historic performance with some
important exceptions. According to the United Nations Development Programme (UNDP),
over 40 countries have done much better than their recent history alone would have
suggested. This large group, says the UNDP, really represents the rise of the South, not
the BRICS, Chindia or some more exclusive club.
The distinctive feature of the calculations is that they are based on the UNDPs human
development index, (HDI) which includes social indicators, e.g. health and education. It is
a broader measure of welfare than gross domestic product (GDP), which is based on
income. As measured by the HDI, some countries with a good, but not outstanding, record
of GDP growth perform exceptionally well. Mexico, Algeria and Brazil, for example, saw
their incomes per person rise at modest annual rates of 11.7% in 1990 2012. But
measured by the rise in the HDI they were among the top 15 performers. Bangladesh did
as well as India on HDI, even though its economic growth lagged behind that of its giant
neighbour.
Booming economies (in the GDP-derived sense) still did well. China, where income per
head rose by 9% a year from 1990 to 2012, came third by the HDI measure. But South
Korea, where income per head rose less than half as quickly, came first. Four of the top
ten HDI performers had annual income growth of less than 3% a head.
The lesson, says the UNDP, is that whereas GDP growth matters, countries cannot rely on
it alone for broad-based development. The best performers by the HDI measure also have
the most energetic social policies. Turkey, for example, number nine in the HDI top ten
almost trebled spending on anti-poverty programmes in 200210, introduced a conditional
cash-transfer scheme in 2003 and cut the share of the population living below the official
breadline from 30% in 2002 to 4% in 2010.
Perhaps the most telling lesson is that countries that did best according to the broad-based
measure also integrated more into the world economy. All but five of the 45 countries that
most improved their HDI scores also increased the share of trade in their economies, often
dramatically. Cutting yourself off and spending lots of money on social protection (as
Venezuela did) produces poor results.
Source: The Economist. 2013. Not by bread alone: Growth in national income is a poor
predictor of welfare. [Online] Available at:
http://www.economist.com/news/international/21573613-growth-national-income-poorpredictor-welfare-not-bread-alone [Accessed: 30 March 2015]

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Instructions
It is evident from the scenario that the United Nations Development
Programme (UNDP) is of the opinion that national income figures are not a
good indicator of economic wellbeing.
Suppose you applied for a position as a junior economist at the UNDP. As an
interview question, you were asked to explain and support the statement:
The lesson, says the UNDP, is that whereas GDP growth matters,
countries cannot rely on it alone for broad-based development.

Refer to both theory and the arguments made in the article in

your explanation. [AC2.2]

(10 marks)

Question 4
Case study 4
Study the scenario and complete the following tasks:
Big chance for May rate hike, warns economist
27 March 2015
Cape Town There is a 35% probability of an interest rate hike in May from around
15% before the South African Reserve Banks Monetary Policy Committee meeting and a
75% chance of a hike in July, according to Peter Attard Montalto, emerging markets expert
at Nomura.
We do not change our July hike baseline yet, however, and will watch the data. We attach
a 35% probability to a May rate hike from around 15% before the meeting and
maintain 75% for July, said Montalto in reaction to the South African Reserve Banks
(Sarbs) decision on Thursday to keep the repo rate unchanged at 5.75%. Nomura expects
no increase this time round.
The growth story remains the same for the Sarb, while its inflation view has turned a
corner and is now shifting higher. The path is still for a hike in July and we retain the view
of terminal rates at 7.5% mid-2016, said Montalto.
However, some of the rhetoric at the press conference does suggest that there may be a
much higher probability of a rate increase in May, but we await data and Fed expectations
before shifting our baseline. The market is under-pricing the timing and extent of the
cycle. The MPC growth forecasts and growth narrative are broadly unchanged, even with
a continuation of load shedding.
The MPC is much more publicly making the case that it can hike because there is no help from
weak growth for core inflation. On inflation the MPC has shifted its view on food price

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inflation remaining low to be quite a bit higher as local prices have jumped and reached
towards import parity, said Montalto.
The Sarb now expects headline CPI inflation to average 4.8% in 2015, compared with
3.8% previously, and to average 5.9% in 2016 compared with 5.4% previously. Equally, it
has pencilled in the currently weaker Rand, but kept oil prices unchanged.
Source: Smith, C. 2015. Big chance for May rate hike, warns economist. [Online] Available
at: http://www.fin24.com/Economy/Rate-hike-more-likely-in-May-economist-20150326
[Accessed: 30 March 2015]

Instructions
The article reports the view of emerging markets expert, Peter Montalto, that
an interest rate hike might take place in either May or June this year.
Analyse the article carefully. Illustrate and explain the effect of such an
interest rate hike on the real and monetary sectors of the economy, using
both AD/AS analysis and an Md/Ms graph. [AC2.3 and AC2.5]
(10 marks)
Question 5
Study the graph below and complete the question that follows:

Source: Roos, A. (editor), Mahadea, D., Mangondo, K., Snowball, J., & Viljoen, K. 2008.
Economics an introduction. Sandton: Heinemann.

Instructions
5.1
Explain why the slope of the aggregate expenditure line
decreases in a multi-sector economy as shown by the graph above.
[AC2.4]
(8 marks)
Assignment total

C_COEC121 Assignment specification| V1.0

[80 marks]

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Negative marking for insufficient or incorrect referencing

Encircle one option per category and add up the total penalty to be applied.
Category A: Minimum Reference Requirements (5 resources)
a.

No additional readings have been used or referenced.

b.

Only 1 additional reading has been used and referenced.

c.

Only 2 additional readings have been used and

referenced.
d. Only 3 additional readings have been used and
referenced.
e. Only 4 additional readings have been used and
referenced.
Note: A further deduction of 1% may be made in addition to
the penalty indicated, if the referencing method has been
incorrectly applied.

Deduct
mark
Deduct
mark
Deduct
mark
Deduct
mark
Deduct
mark

5% of final
4% of final
3% of final
2% of final
1% of final

Total deduction Category A

Category B: Plagiarism sliding scale

Overall % of plagiarism

Penalty

a.
b.

No penalty

Less than 25% of the body of assessment

*More than 25% of the body of assessment (first
offence):
i. If after re-submission less than 25% of the body of
assessment
ii. If after re-submission still more than 25% of the
body of assessment

c. *More than 70% of the body of assessment (first

offence):
i.
If after re-submission less than 25% of the body of
assessment
ii.
If after re-submission more than 25% of the body of
assessment
iii.
If after re-submission more than 70% of the body of
assessment

Re-submission
No penalty
Award 0%

No penalty
Award 0%
Award 0% and
disciplinary hearing

Total deduction Category B

TOTAL DEDUCTION (CATEGORY A & B)

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