Discuss and Provide Solutions on Inflation, Unemployment, Distribution of Income and Balance of Payments in the S.A. Context

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PROGRAMME:MASTER OF BUSINESS ADMINISTRATION

MANAGERIAL ECONOMICS

SURNAME:FIELIES

FIRST NAME/S:MICHEAL CECIL

STUDENT NUMBER:MBA109062

E-MAIL:mcfielies@telkomsa.net

POSTAL ADDRESS:23 Altenburg Street
Highbury
KUILSRIVERCODE:7580

CONTACTS:

(Home):021 903-6904

(Work):021 904-5802

(Mobile):084 688 7147

LECTURER:

I hereby confirm that the assignment submitted herein is my own original work.

Signature of Student:

Date:18 May 2009

TABLE OF CONTENT

Page Number

Overview……………………………..3

A.Addressing Inflation…………………………….3

Introduction………………………..……3 Definition of Inflation……………………………..3 Types of Inflation……………………………..4 Inflation influencing SA the most ……….……………………6 Solutions for inflation ……….……………………7

B.Addressing unemployment…………………………….8

Introduction…………………………….8 Define unemployment……….……………………8 Different types of unemployment
And the causes thereof…………………………….8 Solutions to unemployment……………………………. 11

Addressing Income Distribution amongst different

sections of the population…………………………….12 Introduction…………………………….12 Measurement of income distribution……………………………. 12 General causes of differences in income distribution ………….…………….. 12 Domestic demand for labour…………………………….13 Domestic supply for labour…………………………….13 Foreign demand and supply for labour…………………………….13 Skill-biased technological causes…………………………….13 Specific causes in the SA context……………………………. 14 How can this be addressed……………………………. 15 Affirmative action…………………………….16 Basic condition of employment…………………………….16

D.Addressing the Balance of Payment Deficit…………………………….17

Introduction…………………………….17
Deficit on the Current Account of the
Balance of payment……………………………. 17 Deficit on the Financial Account of the
Balance of payment………………………..…… 18 Actions to reduce a substantial
Financial account deficit…………………………….. 18

E.Surviving the current economic crunch/turmoil ………….………………… 19 Introduction……………………………..19 Global recession…………………………….. 19 Causes of global recession……………………..……… 19 How far has SA weathered the recession……………..……………… 19 What can be done to weather the recession…………………..……..….. 20 Monetary policy…………………….………. 20 Fiscal policy…………………….………. 20 Inflation…………………………….. 20 Export/Imports……………………………..20

F.Conclusion……………………………..21

G.Bibliography…………………………….. 22

OVERVIEW
South Africa's economic growth performance and outlook has been affected by global developments such as the global recession starting in the US and escalating oil prices in the middle-east causing cost-push inflation and has been revised downwards. In fact, these challenges have moved in tandem with international economic indicator trends and are exacerbated by supply side problems, including domestic unemployment, inflation rates beyond the Reserve Bank targets of between 3 and 6%, skills shortages, a globally less-than-competitive industry, climate change and its negative impact on agriculture and water supplies and a volatile rand. High food and energy prices have been major contributors to consumer price inflation. Increased food prices, together with a shortage of staple foods, have resulted in food stock levels being the lowest in years and therefore creating high food insecurity...
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