Question

In November 2011, the National Planning Commission developed a draft national plan which led to the development of the National Development Plan 2030 with the aim of improving the economic performance of the South African Economy.

Discuss FIVE (5) macroeconomic objectives that could be used in 2030 to assess/ determine how successful the plan was in improving the economic performance of the economy. Include in your discussion an explanation of the implication of not meeting the objective as well as the implication for meeting the objective.

Answer 1

Ans) Macroeconomic objectives that cna be used to assess the success of policy are÷

1. Increase in GDP- increase in GDP shows increased level of output and consumption. If GDP is growing, it implies that the economy is growing while if GDP fails to grow, it shows that government is till struggling with problems of investment and consumption and various sectors are not performing well.
2. Increase in income- Increase in income shows that the productivity in an economy is growing also it ensure high standard of living. Less income shows poverty in the economy.
3. Decrease in unemployment- as a result of increased productivity, unemployment also decreases in the economy which shows that more people are better off. Decrease in employment on other hand shows that the economy is not performing well, there is less productivity.
4. Price stability- price stability shows that demand and supply are justified in the market where the wastage due to excess and shortage is reduced. Also gradual increase in price is welcomed but sharp increase in price shows inflation and an inefficient economy.
5. Balance of payment- It is another criterion to check the level of success in the economy. When the exports exceed imports, the reserves of government increase showing healthy economy but when imports exceed export it shows loss of reserve which is sign of unhealthy economy.