If there is excess supply in the capital market Indien daar oorskotaanboed in

If there is excess supply in the capital market

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If there is excess supply in the capital market… Indien daar oorskotaanboed in die kapitaalmark bestaan Assumption about labour market Aanname oor arbeidsmark Effect on labour market equilibrium Invloed op arbeidsmark ewewig Assumption about capital market Aanname oor kapitaalmark Effect on capital market equilibrium Invloed op kapitaalmark ewewig 7 Student number / Studentenommer: __ __ __ __ __ __ __ __ __
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Question/ Vraag 5 [18] 5.1 In the space above, illustrate the existence of equilibrium in and between the capital market and money market according to the classicial school. Assume that commodity money is used. / In die spasie hierbo, illustreer die bestaan van ewewig in en tussen die kapitaalmark en geldmark volgens die klassieke skool. Neem aan dat kommoditeitsgeld gebruik word. (4) 5.2 Suppose disequilibrium between the two markets is caused by a decrease in savings. Illustrate in the diagrams above how equilibrium will be restored and explain this process (with reference to the diagrams) in the space below: / Veronderstel onewewig tussen die twee markte word veroorsaak deur ‘n vermindering in besparing. Toon aan in die bostaande diagramme hoe ewewig herstel word, en verduidelik hierdie proses (met verwysing na die diagramme) in die spasie hieronder : (6) 9 Student number / Studentenommer: __ __ __ __ __ __ __ __ __ Capital market / Kapitaalmark Money market / Geldmark
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5.3 In the space below, illustrate the existence of equilibrium in and between the capital market and money market if fiat money is used. / In die spasie hieronder, illustreer die bestaan van ewewig in en tussen die kapitaalmark en geldmark indien fiat geld gebruik word. (2) 5.4 If there is an increase in money supply, explain with reference to the diagrams, how the indirect transmission mechanism will ensure that the economy returns to the natural interest rate. / Indien daar ‘n toename in die geldwoorraad is, verduidelik aan die hand van die diagramme, hoe die indirekte transmissiemeganisme sal verseker dat die ekonomie terugkeer na die natuurlike rentekoers . (6) 11 Student number / Studentenommer: __ __ __ __ __ __ __ __ __ Capital market / Kapitaalmark Money market / Geldmark
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Question/ Vraag 6 [13] The diagram below shows the change in the prime overdraft rate in South Africa. Suppose that the prime overdraft rate is representative of market interest rates, and that based on the past, the normal interest rate is 11,5%. From this it can be derived that the critical interest rate is 10,3%. Below this interest rate, economic subjects will make earn a negative return on bonds.
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  • Spring '11
  • Mohammad

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