MODULE: ECONOMICS

COHORT: 2018BLEND
SUBMISSION: INDIVIDUAL ASSIGNMENT
DUE DATE: 26 MARCH 2018
STUDENT NUMBER: 22257446

Student Number: 22257446 Page 1

 SURNAME: Chetty

INITIALS: B STUDENT NUMBER: 22257446

E-MAIL ADDRESS: Brayden.chetty@gmail.com

CONTACT NUMBER: 0845236460

SUBJECT: Economics

NUMBER OF PAGES (excluding this page): 19

DUE DATE: 26/03/2018 GROUP: MBA Blended 2018

LECTURER: Prof André Roux & Dr Nyakomo Marwa

OFFICE USE ONLY

DATE RECEIVED:

Student Number: 22257446 Page 2

 Contents
Introduction ............................................................................................................................................................................ 4
Inflation ................................................................................................................................................................................... 5
Economic Growth.................................................................................................................................................................... 6
Unemployment ....................................................................................................................................................................... 7
Exchange rate.......................................................................................................................................................................... 8
Interest rates ........................................................................................................................................................................... 9
Trade balance and current account balance......................................................................................................................... 10
Money supply and credit growth .......................................................................................................................................... 11
Budget deficit and government debt .................................................................................................................................... 12
Gross fixed capital formation (fixed investment) and gross savings .................................................................................... 13
Human development index................................................................................................................................................... 14
Conclusion ............................................................................................................................................................................. 15
Bibliography .......................................................................................................................................................................... 16
Annexure A............................................................................................................................................................................ 18
Rubric .................................................................................................................................................................................... 19

Student Number: 22257446 Page 3

 Introduction
The Main objective aim of any investment is to achieve the highest possible return with the least amount of risk. It is
common practice for countries, individuals and organizations to invest in other countries’ economies, to achieve
sustainable long term profits. This type of investment (Foreign direct investment) benefits both investors and the
relative countries, as this stimulates economic growth and flow (Kuepper, 2017). Therefor the purpose of this
assignment is to discuss the economic Indicators of three specific countries. This analysis will be on my local country
which is South Africa, a developed country such as Norway, and, a power house economy such as China. Norway was
chosen because it is recognized as the most developed country in the world by Investopedia.

From this analyses I will give my opinion on which is the best country for investment, from these 3, that one can make
based on the economic indicators at this point in time. Thus my problem statement is as follow:
Foreign direct investment affects a both investor and invested country. This type of investment creates employment
opportunities, allows residents to develop technical skills, and, above all else, increase the GDP. However, as an
investor, there are many variables to consider when choosing an investment carrier. One has to truly understand what
each indicator means and what information it depicted, in order to make an informed decision. With other macro
environment factors also playing a role, past information does not necessarily guarantee a future trend.

Objectives and how it will be achieved:

• Understanding of Economic indicator
• Analysis of Past Economic performance and possible reasons thereof
• Future Trend Prediction

In this Assignment I will describe the trends and changes that I observe and list the possible reasons I believe that can be
attributed to a countries performance. In conjunction I will also explain the relationships between each economy and
highlight the differences and the similarities between the economic performances. This will be based on the research I
gather and at the end of each indicator I will also attempt to predict future trends based on the data and lastly, conclude
with my recommendation as to which country I would personally invest in.

Student Number: 22257446 Page 4

 Inflation
China Norway
20 Inflation South Africa
% Increase for the

10
Year

0
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
-10 Year
Inflation is the price increase for goods and services in a country. This is measured on annual change base (Hayes, 2018).
Effects of inflation
Inflation effects all the goods and services that consumers pay for, but the effects go beyond that. Essentially the real
interest rates is dependent on the Nominal Interest rate and inflation. That is to say Real Interest Rate = Nominal
Interest Rate – Inflation. The higher the inflation the less Interest any investment is actually making. However if the
interest rate is negative, then that essentially means an even higher real interest rate. Interest rates can be caused by
the following:
1. The Money Supply: Inflation is affected by the money supply in a country. Essentially the more money in the economy
the less the value.
2. The National Debt: The countries debt also plays a factor. In order to pay off debt, government has 2 options. Either
print more money or raise taxes. An increase in taxes has other long term consequences so generally, governments
increase the money supply.
3. Demand-Pull Effect: As consumers buying power increases, they purchase more goods and services. Thus increasing
the demand. As a result prices tend to increase which increase the inflation.
4. Cost-Push Effect: This states is based on the costs of the input items. As they go up, the increase is passed onto the
consumers to maintain profitability.
5. Exchange Rates: Inflation is worsened when we are exposed to foreign markets. The weaker the home currency the
more money is needed to buy imported goods or services (S, 2018).
Analysis of Countries:
The Inflation has been somewhat erratic until 2011 for both China and South Africa. Norway has been able to maintain
an inflation rate lower than 5% throughout the years. Whilst China has skied through the 10% threshold in the 90’s, they
have kept it fairly consistent in the recent years preceding 2018. However South Africa has had higher inflation than 5%
percent year on year. China and South Africa both have erratic behaviour. With regards to future predictions, I predict
that South Africa’s inflation should be around 5.5% simply due to the Rands strong performance this year under new
President Cyril Ramphosa (Pourcelot, 2017). I also think that Norway would still retain an inflation below 3% based on
past data, which is still relatively high for them (Inflation of Norway, 2018). But that’s due to the price increase in energy.

Student Number: 22257446 Page 5

China’s rate indicates a downward trend, and based on the other economic indicators I would think it would be around
3%.

Economic Growth

20 Economic Growth (% Increase)) China Norway South Africa

% Increase for

15
the Year

10
5
0

2003
1995

1996

1997

1998

1999

2000

2001

2002

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
-5
Year

Economic growth is the performance of an economy in terms of its ability to produce goods and services, compared
from one period of time to another. Economic=c growth can be due to the discovery of new resources, for example oil.
Or it can be due to a growth in the labour force, who are able to generate more income. Alternatively it can be
generated with the advancement of new technologies or capital goods. The last method, is increased specialization in
the labour workforce.
As we can see from the graphs, the performance of 3 countries are
indicating a slowdown of growth. However, China still is increasing at a rapid
rate. The major dip that occurred in 2008 /2009 was due to the great
recession. South Africa recovered quite quickly but have not had major
growth changes in recent years. Norway also recovered with time but also is
experiencing a decline. These performance are linked because of the
imports and exports. Countries like china predominantly export most of their produced goods. So they are able to
achieve a higher percentage change. Their products are quite diverse and their low labour rate make them ideal for
manufacturing. Norway has the smallest population from these 3, yet has the highest GDP per Capita. Therefor in
persepective, the GDP has actually performed well.
In My opinion, I would say that South Africa can expect low GDP growth. This is due to the Increase in VAT and stricter
Income taxes limiting the consumer buying power. Which would result in lower demand of products. Based on past data
and their new business ventures I would justify China is quite capable to achieve 8% and growing in the years to come
(China Outlook, 2018). Norway is expected to achieve around 1.5% growth due to the recent growth of their oil industry
(Norway Economic Outlook, 2018).

Student Number: 22257446 Page 6

 Unemployment
China Norway South Africa
40 Unemployment (%)
of Total Workforce
Unemployment %

20

0
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Year

The national unemployment rate is defined as the percentage of unemployed workers in the total labor force.
Unemployment can be broken down into voluntary and involuntary unemployment. Voluntary unemployment means
that a person willingly has left his/her job. When it is involuntary, it means that a person has been fired or laid off.
It can be broken down into the following categories. Frictional unemployment, arises when a person is in-between jobs.
Cyclical Unemployment, is a result of the business cycle. Cyclical unemployment rises and declines during periods of
economic changes. Structural Unemployment, is as a result of new technologies. People lose their jobs because their
skills have been outdated (Unemployment, 2018).
As you can clearly see, South Africa’s Unemployment is far above the other 2 countries, and in the last 3 years,
unemployment has seen an increase. China and Norway have managed to maintain a percentage below 5% for the prior
years. China has the biggest population and still maintains a low Unemployment rate, this was due to the internet
economy and entrepreneurship (China says jobless rate lowest in years, but challenges persist, 2017). Working
conditions and low basic wage rates can be seen as factors that enabled China to achieve this.
Each performance is independent of each other but is linked with other performance indicators. Unemployment is
linked to the tax base, of which a country generates its tax revenue. Which in turn dictates their spending and
development.
The significant change that occurred in 1997 for South Africa which resulted in a massive spike is attributed to the
definition of the population group. Which had been updated and revealed a true reflection of the status. Based on the
recent developments in SA and, the new Business minded president, I foresee an improvement in South Africa’s
unemployment (Tandwa, 2018). As for Norway and China I would also predict a constant trend under 5% for the years to
come. This is based on the fact that in the last 19 years. They have managed to keep it within range.

Student Number: 22257446 Page 7

 Exchange rate
China
20 Exchange Rate (%)
Exhange rate of
LCU to $

10

0
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Year

The exchange rate can be loosely defined as the value of one currency for when it is converted to another. The exchange
rate affects inflation and unemployment as follows:

 Changes in the prices of imported goods and services have a direct effect on the consumer price index.
 Commodity prices are generally priced in dollars, so a weaker exchange rate increases the price.
 An exchange rate appreciation causes a slower growth of real GDP because of a fall in net exports due to the
reduced injection and a rise in the demand for imports causes a leakage in the circular flow.
 A reduction in demand and output may cause job losses as businesses seek to control costs (Riley, 2018).

Prior to 2011 the exchange rates were generally quite similar in performance, however after 2011, the rand value
depreciated and we saw a steady increase in the exchange rate. The reason for this I think is due to the political
leadership image, corruption and the decisions made by our former president. Chinas growing economic activity has
allowed them to level out the trend of the exchange rate. Norway however has seen a steep increase in 2014. This was
due to decrease in the price of oil (Norway - Exchange Rate, 2018). Because the economy is so small, changes such as
this have major impact.
I do acknowledge the fact that the rand is extremely volatile. But I strongly believe that the appointment of the new
president would see a lower exchange rate for South Africa in the years to come. I expect the Norway exchange rate to
worsen. This is because oil is a major determinant in the economy’s GDP, and with the world moving to greener
technologies like solar, the demand for oil will lessen. Impacting the GDP in a negative way. China’s economy is growing
so I expect a gradual decrease or in other words strengthening of the Yuan.

Student Number: 22257446 Page 8

 Interest rates
China Norway South Africa
Interest Rate (%)
20
Interest Rate for the

10
YEar

2016
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015
-10 Year

Interest is essentially a leasing charge for the borrower, for the use of an asset. As discussed earlier, there’s 2 types of
interest rates applicable. One is then Nominal interest rate that’s is quoted. But the actual value of the interest rate
comes from the real interest rate, which takes in to account the inflation.
From the graph above it can be seen that all 3 countries have made significant improvement and indicate a downward
trend. This has advantages and disadvantages attached to it however, as low interest rates may benefit the people
within the economy but may provide a poor investment image. South Africa has seemingly stabilized the interest rate as
opposed to Norway and China. Both countries are quite erratic in terms of performance. This was due to inflation
targeting and controlling, which can be achieved by adjusting the interest rate. According to the research of
Eroglu(2017) , The impacts of inflation targeting, are of a macro-economic nature. With the implementation, the
inflation rate is maintained, the growth rate improves, interest rates go down and the exchange rate gain stability. In
2009 this spike is due to “The great Recession“ it’s interesting to note that Norway has had many instances whereby that
they had negative interest and in recent years have almost had no interest charges. China and South have maintained a
rate under 5% in the past 5 years. Based on recent data, I believe the political impact would see a stable interest rate for
the consumers in South Africa. With regards to Norway I expect a negative or low interest rate, as their economy is
growing in a positive trend, and in relation to China I foresee a downward trend as well. Chinas economy is spreading
throughout the world, just recently a Chinese car manufacturer invested and own shares to the value of 10% in
DaimlerChrysler. Which then brings foreign revenue which help grow the economy at a rapid rate.

Student Number: 22257446 Page 9

 Trade balance and current account balance
China Norway South Africa
400
Trade Balance
Trade Balance LCU/

200
Billion

2000

2003

2006
1995

1996

1997

1998

1999

2001

2002

2004

2005

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
-200 Year

500
Current Account Balance China Norway South Africa
Balance LCU.Billion
Current Account

0
1995
1996
1997
1998

1999
2000
2001
2002
2003

2004

2005
2006
2007
2008

2009
2010
2011
2012
2013

2014
2015
2016
-500
Year

The trade balance, also known as the balance of trade (BOT), is the calculation of a country's exports minus its imports.
The current account consists of the balance of trade, which is the net primary income, and other components such as:
Trade in goods and services, Investment incomes and Net transfers (International Aid). A surplus indicates that the
economy is a net creditor other countries. What this simply means is that a country is saving more as opposed to
investing. In other words it is providing resources to other economies, and in return is owed money. A deficit reflects
that an economy that is a net debtor, and is investing more than it is saving. Thus it is using resources from other
countries to meet its investment and domestic decisions (Heakel, 2018).
Its intriguing to see that prior to 2003, all 3 countries were on a similar level. China’s Trade balance and Current
Account balance has sharply risen from 2004. The economic activity that takes place in this country, due to its
production capability, has proven to be a good investment for other countries. However as new labour laws are being
implemented in the other low labour rate countries are becoming better investments (Such as Thailand and India).
South Africa and Norway have significantly smaller accounts, but in the case of South Africa, there is positive growth.
Norway however indicate a downward trend. I predict that China’s balances to continue to decline due to heavy
investment from foreign countries. In recent times there are other countries which pose better productivity and
profitability. I think that Norway would also decline due to dependency on oil. The world is moving away from
Petroleum products and Norway have not adapted to other sustainable dependencies yet. South Africa is in the negative
end of the scale due to its debt. But with the expected better political management I would expect reduction of debt in
the years to come.

Student Number: 22257446 Page 10

 Money supply and credit growth
China Norway
200.00 Credit Growth (%) South Africa
Credit Growth % of

100.00
GDP

0.00 1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Year

China Norway South Africa

Money Supply
160000
150000
Money Supply LCU/Billion

140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
1999

2006
1995

1996

1997

1998

2000

2001

2002

2003

2004

2005

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Year

The most important function of a commercial bank is the creation of credit money. Credit creation refers to the power
that banks have to expand deposits through the process of loans. Money lent is gained back by other deposits.
There are two ways of creating credit, by giving a loan or by purchasing securities (M.Agarwal, 2018). Money Supply is
the total amount of money in circulation. Chinas money supply far outweighs Norway and South Africa. This makes
sense due to the enormous population. Surprisingly based on the exchange rate, they also have the strongest currency.
Their currency has sky rocketed from 1995 and continuing grow. There has been some improvement for South Africa
and Norway as well, just not as fast or as much as China. In terms of Credit Growth however, All 3 countries are similar,
with China being the highest once again. In all instances I predict a future increase for all 3 countries in terms of Money
Supply and Credit Growth. However the rate of change will be far more in the case of china. However even if these
indicators don’t increase it doesn’t necessarily reflect as bad effect. Less money in the system means more value in the
currency, and less credit growth means more stable cash flow.

Student Number: 22257446 Page 11

 Budget deficit and government debt
China Norway
20 Budget Deficit vs GDP (%) South Africa
Budget Defecit %

10

0
1997

2014
1995

1996

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2015

2016
-10
Year

China Norway
60 Government Debt South Africa
Government Debt % of

40
20
GDP

0
2000

2013
1995

1996

1997

1998

1999

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2014

2015

2016
Year

A budget deficit occurs when the spending outweighs the revenue generated for the year. This is also known as deficit
spending. The National/Government debt is the accumulation of the deficit. When revenue exceeds spending, a surplus
is left over which can be used to pay of some debt. This is a good indicator of financial health. The debt affects the deficit
in three ways. First, the debt gives an outlook of the true deficit each year, by which you can analyze in comparison to
last years. Second, the interest on the debt is accumulated on a yearly basis. Third, the debt decreases tax revenue in
the long term. That further increases the deficit. In the short term, deficit spending boosts economic growth. This is due
to the liquidity that’s being pumped into the economy. In the long term however, this debt damages the economy by
raising the interest rates (The Difference Between the Deficit and the Debt, 2018).
The greatest danger from the debt is to Social Security. As this debt comes due when Baby Boomers retire, funds will
need to found to pay them. Not only could taxes be raised, which would slow the economy, but the loan from the Social
Security Trust Fund will stop. More and more of the government's spending will need to be devoted to pay for this
mandatory cost. This would provide less stimulation, and could further slow the economy. Finding data for this was
rather difficult however as I assume that this type of information is rarely published. Even with this incomplete data, it
can still be seen that Norway has a positive deficit which indicates that don’t they have excess money year on year and
so I can say that they would probably not have a lot of debt. China in recent years have overspent for the yearly GDP,
but seem to be growing on their debt nonetheless. South Africa has been exponentially misspending in the years
preceding to 2018. With the increase in the budget Deficit, the government becomes more reliant on credit and its debt
grows. If the borrowing credit continues to increase, it gives a poor public investment image which, in turn has an effect

Student Number: 22257446 Page 12

 on the other economic variables. Based on the trends I see, I would say that China will continue to grow in debt.
However South Africa has a massive gap to close, which I believe it will, eventually based on the new political leadership
and tax generating methods they are using.

Gross fixed capital formation (fixed investment) and gross savings

China Norway South Africa
10000 Gross Savings
Gross Savings
LCU/Billion

5000

0
1997

2004

2011
1995

1996

1998

1999

2000

2001

2002

2003

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016
Year
China

6000
Gross Fixed Capital Norway
Gross Fixed Capital

4000
LCU/Billion

2000

0
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Year

Gross Domestic Savings is the savings that is held by the household sector, and is different from the GDP. Gross fixed
capital formation is in essence the net increase of investment in terms of assets, for a particular period. From both
graphs its can clearly be seen, that China’s performance far outweighs South Africa’s and Norway.
The exploded view shows that during the period of 2002 -2014, there has been a rise savings. However, with the

Norway Norway
Gross Fixed Capital South Africa Gross Savings South Africa
150 150
LCU/ Billion
LCU/Billion

100 100

50 50

0 0
1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015
1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

Year Year
exception of China, who is leveling, the remaining countries have shown a decline. This simply means that the countries
are now tapping into their reserves. From my research, it has shown that Norway’s price change of the oil commodity
has impacted the saving abilities of the country. For South Africa, the decline of the mining industry and lack of demand
for export, deemed the necessity of utilizing the saving reserve. These 2 indicators are linked to the GDP, consumer
expenditure, and government expenditure, in the sense that all these factors affect the saving capacity of a country. In

Student Number: 22257446 Page 13

my view point, I would say that Norway’s savings will continue to decline as they have not found another
commodity/service to substitute for oil. South Africa however would in all likelihood, improve on its savings. New
president Cyril Ramphosa, is fighting corruption on a national level, thus freeing reserves and better controlling the
finances.. China shows signs of an upward trend which I will continue.

Human development index

Human Development Index

1
HDI

0.5 China
Norway
0
1996

1999

2002

2005
1995

1997
1998

2000
2001

2003
2004

2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
South Africa

Year

The HDI is a measure that measures people and their capabilities to establish the progress of a country (Human
Development Index (HDI), 2018). It does only take into account economic growth. The Human Development Index (HDI)
is a measure of key elements such as Life expectancy, knowledge and standards of living. Positively noted, there is
growth, but rates of growth differ from country to country. Norway has the highest HDI from these 3 countries. In fact
they have voted number 1 for 12 years in a row.

China has, in recent years improved its GDP per Captia to $7575 as well life expectancy to 74.8 and reduced the level of
illiteracy (China's Human Development Index gains highlight great strides, 2016).

South Africa is the only country that experienced a stage of decline. As highlighted by the UNDP, South Africa has made
significant progress but there are still key issues that loom. The focus going forward needs to address poverty and
inequalities (UN Human Development Reports points to gender imbalance in paid and unpaid work in South Africa,
2016).

In all 3 countries I expect a positive growth trend, but would further describe the rate of growth for South Africa to be
slower in comparison. Furthermore, I think China will reach 0.8 by 2025.

Student Number: 22257446 Page 14

 Conclusion
Analyzing the above data presents certain characteristics of each country. To recommend a country depends on the type
of investor. South Africa, has been mismanaged for a long period of time. There have high levels of debt, low levels of
Growth, High levels of Unemployment, and stagnant levels of Human Index all have indicated a poor investment.
However with new political leadership there may be significant turnaround and a financially prosperous investment.
Norway is a developed country, it has low economic growth but, the standards of living are much higher as compared to
the others up for consideration. However Norway seemed to be very dependent on oil, which I feel is unsustainable in
the long run. A secure investment but I wouldn’t personally expect high yielding profits. China is a massive economy that
seems to supersede the other 2 countries in many areas. Therefore it would remain a safe investment. There is
tremendous potential for advancement, especially in the area of new technologies. The threats however, are other
countries who pose better investments for labour (Lomas, 2017) considering all the above indicators, as well as the
macro environment information I was able to gather, depending on the reader’s nature towards of risk, I would suggest
the following: Risk Averse and Risk Neutral– China; Risk Loving – South Africa; Long term - Norway or China; and Short
term - South Africa. All in all, each country would be a good investment.

Student Number: 22257446 Page 15

 Bibliography
China Outlook. (2018, February 20). Retrieved from Focus Economics: https://www.focus-
economics.com/countries/china

China says jobless rate lowest in years, but challenges persist. (2017, Ocotober 22). Retrieved from Reuters:
https://www.reuters.com/article/us-china-economy-jobs/china-says-jobless-rate-lowest-in-years-but-
challenges-persist-idUSKBN1CR01F

Eroglu, I. (2017). An evaluation of the effectiveness of an inflation targeting strategy in Turkey. Economic Research-
Ekonomska Istraživanja , 10.

Hayes, A. (2018, March 21). Inflation: What is Inflation? Retrieved from Investopedia:
https://www.investopedia.com/university/inflation/inflation1.asp

Inflation of Norway. (2018, January 10). Retrieved from Focus Economics: https://www.focus-economics.com/country-
indicator/norway/inflation

Kuepper, J. (2017, January 01). Should You Invest in Foreign Countries? Retrieved from The Balance:
https://www.thebalance.com/should-you-invest-in-foreign-countries-1978967

Norway - Exchange Rate. (2018, March 20). Retrieved from Focus Economics: https://www.focus-
economics.com/country-indicator/norway/exchange-rate-EUR

Norway Economic Outlook. (2018, February 20). Retrieved from Focus Economics: https://www.focus-
economics.com/countries/norway

Pettinger, T. (2016, December 14). Gross Fixed Capital Formation. Retrieved from Economics Help:
https://www.economicshelp.org/blog/6536/economics/gross-fixed-capital-formation/

Pourcelot, J.-P. (2017, October 27). South Africa: Inflation edges higher in September. Retrieved from Focus Economics:
https://www.focus-economics.com/countries/south-africa/news/inflation/inflation-edges-higher-in-september

Riley, G. (2018, March 21). Exchange Rates - Macroeconomic Effects of Currency Fluctuations. Retrieved from Tutor2U:
https://www.tutor2u.net/economics/reference/exchange-rates-macroeconomic-effects-of-currency-
fluctuations

S, P. (2018, March 21). What Is Inflation Definition – Causes of Inflation Rate and How to Fight the Effects. Retrieved
from Money Crashers: https://www.moneycrashers.com/what-is-inflation-definition-causes-inflation-rate/

Tandwa, L. (2018, February 20). Ramaphosa's fight against unemployment begins at home. Retrieved from News24:
https://www.news24.com/SouthAfrica/News/ramaphosas-fight-against-unemployment-begins-at-home-
20180220

Times, T. E. (2018, March 16). Definition of 'Gross Domestic Saving'. Retrieved from The Economic Times:
https://economictimes.indiatimes.com/definition/gross-domestic-saving

Unemployment. (2018, March 21). Retrieved from Investopedia:

https://www.investopedia.com/terms/u/unemployment.asp

World Development Indicators.(2018). Inflation. Retrieved from https://data.worldbank.org/indicator

World Development Indicators.(2018). GDP growth (annual %). Retrieved from https://data.worldbank.org/indicator

Student Number: 22257446 Page 16

World Development Indicators.(2018). Official exchange rate (LCU per US$, period average). Retrieved from
https://data.worldbank.org/indicator

World Development Indicators.(2018). Real interest rate (%). Retrieved from https://data.worldbank.org/indicator

World Development Indicators.(2018). Unemployment, total (% of total labor force). Retrieved from
https://data.worldbank.org/indicator

World Development Indicators.(2018). Net trade in goods and services (BoP, current US$). Retrieved from
https://data.worldbank.org/indicator

World Development Indicators.(2018). Current account balance (BoP, current US$). Retrieved from
https://data.worldbank.org/indicator

World Development Indicators.(2018). Central government debt, total (% of GDP). Retrieved from
https://data.worldbank.org/indicator

World Development Indicators.(2018). Broad money (% of GDP). Retrieved from https://data.worldbank.org/indicator

World Development Indicators.(2018). Domestic credit to private sector (% of GDP). Retrieved from
https://data.worldbank.org/indicator

World Development Indicators.(2018). Gross savings (% of GDP). Retrieved from https://data.worldbank.org/indicator

World Development Indicators.(2018). Gross fixed capital formation (current US$). Retrieved from
https://data.worldbank.org/indicator

UNDP .(2015). Human Development Data (1990-2015). Retrieved from https://data.worldbank.org/indicator

Student Number: 22257446 Page 17

 Annexure A

Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
China 16.90 8.32 2.81 -0.84 -1.41 0.26 0.72 -0.77 1.16 3.88 1.82 1.46 4.75 5.86 -0.70 3.31 5.41 2.62 2.63 2.00 1.44 2.01
Inflation (%) Norway 2.46 1.26 2.58 2.26 2.33 3.09 3.02 1.29 2.48 0.47 1.52 2.33 0.73 3.77 2.17 2.40 1.30 0.71 2.13 2.03 2.17 3.55
South Africa 8.68 7.35 8.60 6.88 5.18 5.34 5.70 9.16 5.86 1.39 3.40 4.64 7.10 11.54 7.13 4.26 5.00 5.65 5.75 6.07 4.59 6.33

China 10.95 9.93 9.23 7.84 7.67 8.49 8.34 9.13 10.04 10.11 11.40 12.72 14.23 9.65 9.40 10.64 9.54 7.86 7.76 7.30 6.90 6.69
Economic growth (%) Norway 4.15 5.03 5.28 2.62 2.01 3.21 2.09 1.44 0.92 3.96 2.62 2.40 2.99 0.48 -1.69 0.69 0.97 2.72 1.04 1.98 1.97 1.09
South Africa 3.12 4.31 2.65 0.52 2.36 4.15 2.74 3.67 2.95 4.55 5.28 5.60 5.36 3.19 -1.54 3.04 3.28 2.21 2.49 1.70 1.30 0.28

China 2.90 3 3.1 3.1 3.1 3.1 3.6 4 4.3 4.2 4.2 4.1 4 4.2 4.3 4.1 4.1 4.1 4 4.1
Unemployment (% of
Norway 6.30 5 4.7 3.7 3.2 3.5 3.7 4 4.2 4.3 4.4 3.4 2.5 2.6 3.1 3.5 3.2 3.1 3.4 3.5 4.3 4.7
Total Workforce)
South Africa 4.5 5.1 5.4 25 25.4 23.3 26.2 26.6 27.1 24.7 23.8 22.6 22.5 22.4 23.5 24.7 24.6 24.7 24.6 24.9 25.2 26.6

China 8.35 8.31 8.29 8.28 8.28 8.28 8.28 8.28 8.28 8.28 8.19 7.97 7.61 6.95 6.83 6.77 6.46 6.31 6.20 6.14 6.23 6.64
Exchange rate ($) Norway 6.34 6.45 7.07 7.55 7.80 8.80 8.99 7.98 7.08 6.74 6.44 6.41 5.86 5.64 6.29 6.04 5.60 5.82 5.88 6.30 8.06 8.40
South Africa 3.63 4.30 4.61 5.53 6.11 6.94 8.61 10.54 7.56 6.46 6.36 6.77 7.05 8.26 8.47 7.32 7.26 8.21 9.66 10.85 12.76 14.71

China -1.42 3.36 6.91 7.35 7.21 3.71 3.73 4.68 2.64 -1.28 1.61 2.11 -0.31 -2.33 5.45 -1.06 -1.47 3.52 3.69 4.73 4.25 3.09
Interest Rate (%) Norway 4.40 2.32 3.13 10.56 0.89 -5.63 6.94 10.58 1.81 -1.70 -4.34 -3.75 3.49 -2.86 10.01
South Africa 6.99 10.77 11.17 13.01 10.21 5.20 5.73 3.13 8.66 4.47 4.91 4.62 3.97 5.78 3.91 3.27 2.32 3.29 2.22 3.17 4.21 3.22

China 11.95759 17.551 42.824 43.837 30.641 28.87353 28.084 37.38309 35.82113 51.17438 124.6268 208.9189 308.036 348.8325 220.1304 223.0239 181.9037 231.8449 235.3796 221.2992 357.8708 249.9139
Trade balance (LCU/
Norway 9.210227896 14.35616 13.12294 2.783429 11.62821 28.63475 28.95915 25.80712 29.25643 35.08804 49.3466 58.41274 54.05126 79.7705 47.00982 50.46093 66.94733 66.09393 55.98534 44.43458 21.86365 3.160073
billion)
South Africa 1.027227365 2.192239 1.710207 1.729665 3.45974 3.920384 4.867805 4.362353 4.046567 -0.41037 -0.63334 -4.555 -3.97644 -4.94623 1.477377 4.781757 3.441603 -5.71793 -8.82674 -6.17068 -3.46389 0.515064

China 1.61839 7.243 36.963 31.472 21.115 20.51838 17.401 35.422 43.05158 68.94096 132.3785 231.843 353.1827 420.5685 243.2566 237.8104 136.0968 215.3917 148.2039 236.0466 304.1644 196.3802
Current Account
Norway 5.232528309 10.96892 10.03595 0.006108 8.858629 25.07884 27.54573 24.26904 27.69771 32.99999 49.96749 55.91307 49.73237 72.91506 45.169 50.25813 66.45356 63.59536 53.44979 54.96466 31.10558 14.30117
Balance ($/ Billion)
South Africa -2.49324787 -1.67819 -2.22736 -2.19913 -0.67525 -0.19056 0.342639 1.009384 -1.54157 -6.41375 -8.01542 -12.0756 -16.1712 -16.4109 -7.90682 -5.49224 -9.31883 -20.3149 -21.6385 -18.6826 -13.911 -9.47863

China 6074.35 7609.53 9186.781 10556.01 12104.21 13596.02 15641.19 17696.51 21101.28 24242.61 28301.23 34560.36 40344.22 47516.66 61022.45 72585.18 85159.09 97414.89 110652.5 122837.5 139227.8 155006.7
Money Supply (LCU/
Norway 523.295 559.453 567.521 655.322 666.463 724.201 843.455 906.0869 925.5421 988.9395 1093.019 1167.09 1378.369 1420.916 1433.685 1526.429 1624.446 1697.474 1812.037 1922.808 1820.391 2024.976
Billion)
South Africa 274.145 313.29 369.097 419.4896 465.2444 498.8121 599.5216 709.1513 803.8272 909.5546 1097.809 1346.167 1668.32 1914.2 1947.911 2082.98 2256.727 2373.439 2513.865 2696.862 2975.276 3156.157

China 84.21 89.45558 96.72582 105.1932 110.3835 111.123 110.0446 117.4987 125.6714 118.6361 111.8429 109.1584 105.7327 101.9171 124.2071 126.3003 122.7537 128.4962 133.8045 140.1474 152.5516 156.7061
Credit Growth (% of
Norway 54.83 56.92315 62.07878 68.9574 67.17724 64.34246 96.28988 102.5863 106.8847 105.3811 107.011 97.57389 107.4806 119.8569 127.9809 128.2089 125.6118 123.2965 124.8062 128.8608 138.3695 144.8013
GDP)
South Africa 116.00 116.7189 113.3614 115.1679 131.0482 130.3122 138.7925 110.7184 115.8622 126.9323 138.1594 156.9762 160.1248 140.3499 145.9412 148.9814 139.6023 146.4798 149.2416 151.0256 147.6634 144.4185

China -2.97 -2.48 -3.09 -4.87 -6.18 -7.8 -6.91 -4.64 -3.7 -0.91 -0.47 0.82 2.94 1.26 0.13 1.48 1.53 1.27 0.76 0.84 -0.88
Budget Deficit (% of
Norway 3.15 6.16 7.49 3.25 5.87 15.1 13.19 9.05 7.25 10.92 14.82 18.02 17.11 18.67 10.33 10.99 13.43 13.83 10.77 8.75 6.06 4
GDP)
South Africa -1.74 -3.85 -3.14 -2.96 -3.19 -3.27 -4.06

China 21.447 21.259 20.448 20.496 21.688 22.809 24.384 25.711 26.574 26.168 26.098 25.382 29.036 27 34.346 33.742 33.638 34.269 36.997 39.92 41.066
Government Debt
Norway 49 46.7 41.53 41.29 27.4 29.1 29.7 27.27 31.8 35.3
(LCU)
South Africa 279.487 310.407 336.184 377.656 390.438 417.454 0 0 0 0 0 0 0 616.394 0 0 0 0 0 0 0 0

China 243.7809313 280.4814 305.9565 347.2773 365.3097 405.0022 459.8706 529.1401 651.9802 793.4203 925.1505 1093.929 1380.903 1842.099 2294.325 2744.743 3399.69 3874.986 4372.706 4721.377 4841.477 4799.632
Gross fixed Capital
Norway 32.59376184 35.68405 38.0011 40.87686 38.08211 33.9476 33.975 37.98555 43.16149 51.80809 62.77842 72.28681 94.41544 104.3133 89.82412 88.94411 107.1816 114.3649 123.2383 118.9325 91.9392 89.34417
(LCU/ Billion)
South Africa 26.3659673 25.38227 26.78754 24.91941 22.04239 21.29442 18.86029 17.53616 28.00865 37.68306 44.43915 51.44003 61.74132 67.50088 63.9359 72.30491 79.69199 76.20592 74.73773 72.33392 64.88467 57.74033

China 243.7809313 280.4814 305.9565 347.2773 365.3097 405.0022 459.8706 529.1401 651.9802 793.4203 925.1505 1093.929 1380.903 1842.099 2294.325 2744.743 3399.69 3874.986 4372.706 4721.377 4841.477 4799.632
Gross Savings (LCU/
Norway 32.59376184 35.68405 38.0011 40.87686 38.08211 33.9476 33.975 37.98555 43.16149 51.80809 62.77842 72.28681 94.41544 104.3133 89.82412 88.94411 107.1816 114.3649 123.2383 118.9325 91.9392 89.34417
Billion)
South Africa 26.3659673 25.38227 26.78754 24.91941 22.04239 21.29442 18.86029 17.53616 28.00865 37.68306 44.43915 51.44003 61.74132 67.50088 63.9359 72.30491 79.69199 76.20592 74.73773 72.33392 64.88467 57.74033

China 0.547 0.557 0.565 0.574 0.583 0.592 0.6 0.61 0.622 0.634 0.646 0.659 0.672 0.682 0.691 0.7 0.703 0.713 0.723 0.734 0.738
Human Development
Norway 0.883 0.888 0.895 0.906 0.911 0.917 0.916 0.918 0.924 0.929 0.931 0.934 0.936 0.936 0.936 0.939 0.941 0.942 0.945 0.948 0.949
Index (HDI)
South Africa 0.653 0.651 0.647 0.641 0.635 0.629 0.62 0.613 0.611 0.609 0.609 0.612 0.616 0.622 0.63 0.638 0.644 0.652 0.66 0.665 0.666

Student Number: 22257446 Page 18


Appendix C: Good
Assignment
Evaluation Form
Excellent
INTRODUCTION
Background and The introduction provides a lucid
problem statement background and problem statement.
The topic is well-defined and clearly
demarcated.
(8)
Objectives and Research objectives are well
proposed layout articulated and precise.
It is made very clear how the paper
will achieve the objectives and reach
a conclusion.
(7)
CONTENT
Integration of The paper demonstrates that the
knowledge author fully understands and has
applied the appropriate concepts. The
concepts are integrated into the
writer’s own insights. The analysis
shows a proper synthesis of ideas.
(10)
Depth of discussion In-depth discussion and elaboration
throughout the paper.
(10)
Motivation of Excellent and well-founded
statements motivation of statements/
conclusions, substantiated by data/
theories, and reflecting high level
critical evaluation of theories,
concepts and assumptions, creativity
and independent thinking.
(10)
Cohesiveness Ties together information from all
sources. The paper flows from one
issue to the next in a fluid fashion.
The author’s writing demonstrates an
understanding of the relationship
among material obtained from all
sources.
(10)
Development of ideas Explores ideas vigorously. Shows
critical thinking which moves beyond
simple summary, description, or
personal views. A thorough analysis
that goes beyond the obvious.
(10)
Student Number: 22257446
Rubric
Needs Unacceptable Score
improvement
The background and The topic is introduced, Only the topic is introduced; there is no
problem statement are but the background and background and problem statement.
contained in the problem statement are (1)
introduction. covered superficially
(5-7) (2-4)
Clear research objectives Research objectives are Objectives are not clear enough; they
are provided. too broad and/or not are confusing.
It is generally clear how adequately linked to No description of the paper. Or, the
the paper will achieve the context. The flow of the paper is described inaccurately.
objectives and reach a paper is described in a (1)
conclusion. rather vague and generic
(4-6) fashion.
(2-3)
The paper demonstrates The paper demonstrates The paper demonstrates that the
that the author, for the that the author, to a author has not fully understood and
most part, understands certain extent, applied the appropriate concepts.
and has applied the understands and has (1)
appropriate concepts. applied the appropriate
(6-9) concepts.
(2-5)
In-depth discussion and Pertinent content Superficial discussion in all sections of
elaboration in most parts omitted. Quotations from the paper, or brief discussion in only a
of the paper. others outweigh the few sections.
(6-9) writer’s own ideas. (1)
(2-5)
Clear motivation of Limited motivation of Arguments not motivated or poorly
statements/ conclusions statements with little motivated or unsubstantiated/ invalid
based on appropriate evidence of findings and conclusions.
data and/or theories, and conclusions supported by (1)
reflecting some critical data/theories.
evaluation of theories, (2-5)
concepts and or
assumptions.
(6-9)
For the most part ties Sometimes ties together Rarely ties together information from
together information information from all all sources. Paper does not flow and
from all sources. Paper sources. Paper does not appears to be created from disparate
flows with only some flow – disjointedness is issues. Author’s writing rarely
disjointedness. The apparent. Author’s demonstrates an understanding of the
author’s writing writing does not always relationship among material obtained
demonstrates an demonstrate an from all sources.
understanding of the understanding of the (1)
relationship among the relationship among
material obtained from material obtained from
all sources. all sources.
(6-9) (2-5)
Supports ideas with clear Ideas presented in Most ideas unsupported; reasoning is
analysis, but ideas are general terms; support flawed
general or obvious. for ideas is inconsistent; (1).
(6-9) reasoning is unclear.
(2-5)
Page 19
Sources More than 10 current sources are
used, all of which are reputable,
credible, and relevantly current. All
web sites used are authoritative.
(10)
STYLE
Technical Excellent overall technical quality of
the document, in terms of
referencing, contents page, headings
& sub-headings, appendices,
legibility of the text and diagrams,
etc.
(5)
Linguistic All sentences are complete and
grammatical. All words are chosen
for their precise meanings. All new
or unusual terms are well-defined.
Key concepts and theories are
accurately and completely
explained. Good, clear examples are
used to illuminate concepts and
issues. Information (names, facts,
etc.) is accurate. Paper has been
spell-checked and proofread, and
has no errors, and no rhetorical
questions or slang.
(5)
CONCLUSION
Resonance Conclusions are exceptionally well
developed and show considerable
with
originality. They form an integrated
research part of the overall argument and/or
discussion, reflecting commanding
grasp of theory, evidence and/or
literature and appropriate forms of
conceptualisation.
(8)
Plausibility Paper uses the conclusion to tie up
loose ends. Example - considers
and
objections to the argument to which
credibility it is acknowledged there is no space
or expertise to respond. Or, briefly
considers the implications of the
acceptance of the conclusion for a
larger argument, or for a larger issue
or problem. Or explains what further
work may need to be done in this
area.
(7)
TOTAL
Student Number: 22257446
10 current sources are used,
all of which are reputable,
credible, and relevantly
current. All web sites used are
authoritative.
(6-9)
Good overall technical quality
of the document.
(3-4)
Most sentences are complete
and grammatical. Most words
are chosen for their precise
meanings. Most new or
unusual terms are well-
defined. Key concepts and
theories are explained.
Examples are clear.
Information (names, facts,
etc.) is accurate. Paper has
been spell-checked and
proofread, and has very few
errors, and no rhetorical
questions or slang.
(3-4)
Sound conclusions are drawn
which are clearly derived from
evidence and/or theory
and/or literature.
(5-7)
The paper uses the conclusion
to tie up some loose ends, but
combines this with a
restatement of the
introduction.
(4-6)
Fewer than 10 current sources are
used, or fewer than 4 of 10 are
reputable, credible, and relevantly
current. All web sites used are
authoritative.
(2-5)
Overall technical quality of the
document unsatisfactory with
numerous areas for improvement.
(1-2)
A few sentences are incomplete
and/or ungrammatical. Words are
not chosen for their precise
meanings. New or unusual terms
are not well-defined. Key concepts
and theories are not explained.
Examples are not clear. Information
(names, facts, etc.) is mostly
accurate. Paper has several spelling
errors, rhetorical questions and/or
uses of slang.
(1-2)
Limited attempt to draw together
arguments.
(2-4)
The conclusion is merely a
restatement of the introduction.
(2-3)
Fewer than 10 current sources
are used, or fewer than 6 of 10
are reputable, credible, and
relevantly current. Not all web
sites used are authoritative
(1).
Poor overall technical quality
of the document.
(0)
Many sentences are
incomplete and/or
ungrammatical. The author
does not acknowledge that key
words have precise meanings.
Information (names, facts, etc.)
is inaccurate. Paper has many
spelling errors, rhetorical
questions and/or uses of slang.
(0)
The conclusion contains largely
irrelevant arguments that are
unrelated to the research
objectives and subsequent
analysis
(1)
The conclusions are far-fetched
and/or irrelevant
(1)
Page 20