Question

The world economy has been facing numerous challenges, amongst them the financial crisis of September 2008, which saw the largest bankruptcies in world history, and is believed to have pushed more than 30 million people into unemployment. Many countries were brought to the edge of insolvency. 2008 financial meltdown reminded Wall Street of the 1929 crash that lead to a great depression. Phil Angellides, the chairman of the Financial Crisis Inquiry Commission called banks and government officials to order during his investigations of the 2008 crash that destabilised the world markets, and even up to now investor monies are still in flight. The meltdown has been an awakening call on monetary and fiscal policy makers to be even more prudent in policy formulation, to advance macroeconomic objectives and at the same time improving investor confidence. ln view of the above insert, list and discuss the 5 (five) key macro-economicobjectivesthat SA policy makers need to pay attention to in their quest to stabilise and enhance the economy.

Answer 1

The five key macro-economic objectives for SA policymakers are achieving economic growth, stabilizing inflation, attaining full employment, ensuring a balanced budget, and maintaining a healthy balance of payments. These goals are essential for improving investor confidence and ensuring continued economic prosperity.

Step-by-step explanation:

In response to the student's question about the five key macro-economic objectives that South African policymakers need to focus on to stabilize and enhance the economy, we can consider the following:

1. Economic Growth: To achieve sustainable economic growth rates that can create jobs and raise the standard of living.
2. Stabilize Inflation: Policymakers must aim at keeping inflation levels low and stable to maintain the purchasing power of the currency.
3. Full Employment: Striving for a high employment level is critical to reduce poverty and inequality.
4. Balanced Budget: Ensuring fiscal responsibility and reducing the budget deficit to prevent escalating public debt.
5. Healthy Balance of Payments: Working towards a sustainable balance of payments to prevent excessive borrowing from the international markets.

These objectives aim to fortify the economic foundation and improve investor confidence, thereby promoting a more resilient economy that can withstand financial shocks and contribute to continued economic prosperity.