FACULTY OF MANAGEMENT, COMMERCE, AND LAW

COURSE OUTLINE (Basic Macroeconomics)

YEAR: 2024 semester 2

Section A. Faculty Information

Faculty FMCL

DEPARTMENT Economics

PROGRAMME Bachelor of Commerce [Economics, Accounting and

Business studies]
Module Name Basic Macro-economics
Module Code Eco 1241
Module Credit Value 120 credits

National Qualifications NQF level 7

Framework (NQF) Level
Time allocation 50 minutes per lecture/ 3 lectures in a week/ one tutorial class
per week (etutoring)
Date of Approval of
Module / Course by
Faculty:

Date of Review by
Faculty
Name of Lecturer/s Dr Munzhelele and Dr Dagume
Name of tutor etutoring

Section B: Institutional section

 1. Welcome statement The Department of Economics welcomes you to this academic
year of 2024. Eco 1241 is a semester module made up of 10
study units or chapters. The semester has approximately 17
weeks and 70+1 days of lecturing, including tutorial classes.
We believe that both of us will use the time allocated as
profitably as possible.
2. Contact Details Dr Munzhelele T [cell:0721491765/ office: 0159629269]
email: tshilidzi.munzhelele@univen.ac.za
Office A1 new mobile offices. Opposite new clinic.

Dr Dagume M [cell:0834848759/ office: 015 962

8451]mbulaheni.dagume@univen.ac.za.
Office No.8. Opposite Law building.

2.1 Lecturers 1. Dr Munzhelele T

2. Dr Dagume MA
2.2 Consultation Time Dr Munzhelele T [Via email or on Tuesday from 09 to 10
hours
Dr Dagume MA [via email or on Thursday from 9 to 10
hours]

3. Overview of the
Qualification

3.1 Name of the Bcom Econ

Qualification or
Programme

3.2 Rationale for the The degree is an ideal stepping stone to a diverse and exciting
Degree range of business-related careers in South Africa today, such
as
1. Banking and Insurance
2. Economics consulting
3. Business consulting
4. Financial consulting
5. Corporate adviser
6. Teacher
3.3 Purpose of the To produce competitive, knowledgeable, resourceful graduates
Qualification who will be role players in the economic field.

Section C: Teaching and learning

1. Structure of the Chapter 13. MEASURING THE PERFOMANCE OF THE ECONOMY
module  Macro-economic objectives?
• Measuring the level of economic activity: GDP.
• Other measures of production, income and expenditure
• Measuring employment and unemployment
• Measuring prices, the consumer price index
• Measuring the links with the rest of the world: the balance
of payment
• Measuring inequality: the distribution of income.
Chapter 14. MONETARY SECTOR
 The functions of money
• Different kinds of money
• Money in South Africa
• Financial intermediaries
• The South African Reserve Bank
• The demand for money
• The stock of money: how is money created?
• Monetary policy
• Bank supervision
CHAPTER 15.THE GOVERNMENT SECTOR
 The government or public sector
 The role of Government in the economy: an overview.
 Market failure [as justification for government intervention]
 Further reasons for government intervention in the
economy  How does government intervene?
 Government failure
 Nationalisation and privatisation
 Fiscal policy and the government
 Government spending
 Financing of government expenditure
 Taxation
 Tax incidence: who really pays the tax?
CHAPTER 16. THE FOREIGN SECTOR
 Introduction
 Why countries trade
 Trade policy
 Exchange rates
 The terms of trade
CHAPTER 17. A SIMPLE KEYNESIAN MODEL OF THE ECONOMY
 Production, income and spending
 The basic assumptions of the model
 Consumption spending
 Investment spending
 The simple Keynesian model of a closed economy without a
government
 The algebraic version of a simple Keynesian model
 The impact of a change in investment spending: the
multiplier
CHAPTER 18. KEYNESIAN MODELS INCLUDING THE GOVERNMENT
AND THE FOREIGN SECTOR
 Introducing the government into our model
  Introducing the foreign sector into the model: the open
economy
 The impact of the government and the foreign sector: a
brief summary
CHAPTER 19. MORE ON MACROECONOMIC THEORY AND POLICY
 The aggregate demand and supply model The monetary
transmission mechanism
 Monetary and fiscal policy in the AD-AS model 
Other approaches to macroeconomics
CHAPTER 20. INFLATION
 The definition of inflation
 The measurement of inflation
 The effects of inflation
 The causes of inflation  Anti-inflation policy
CHAPTER 21. UNEMPLOYMENT
 Unemployment
 Unemployment and inflation: the Phillips curve
CHAPTER 22. ECONOMIC GROWTH AND BUSINESS CYCLES
 The definition and measurement of economic growth
 The business cycles
 Sources of economic growth  Some fundamental causes
of low economic growth.
2. Level descriptors of the
module

DEPARTMENT OF ECONOMICS
3. Purpose of the The purpose of this module is for students to gain a
basic
module basic knowledge, insight and skills for the analysis
and solution of elementary problems relating to some
of the
general underlying principles of
macroeconomics

4. Learning Once you have studied this module you should be able to:
Outcomes and  Explain what macro-economic all is about
Associated  Demonstrate your understanding of the objectives of
Assessment macroeconomics
 Conceptualize and apply the main economic problem in
Criteria different economic systems and use a diagram to explain
how the economy functions
 Conceptualize and analyze the performance of the
economy.
 Calculate and evaluate the national income, inflation,
 unemployment, and economic growth  Explain different
forms of money.

5. Content Outline Chapter13. Measuring the performance of the economy

Chapter 14. The monetary sector
Chapter 15. The government sector
Chapter 16. The foreign sector
Chapter 17. A simple Keynesian model of the economy
Chapter 18. Keynesian models including the government and the
foreign sector
Chapter 19. More on macroeconomic theory and policy
Chapter 20. Inflation
Chapter 21. Unemployment
Chapter 22. Economic growth and business cycles.

6. TeachingLearning Online via moodle and face to face.

Methods

7. Assessment Summative assessment: Semester examination

Methods Formative assessment: one test 50 marks each
1 written test/ One assignment 50 marks Students must obtain
50 marks to pass both test and assignment

8. Learning Activities Learning activities in a form of quizzes and calculations will

be provided during the course of the semester.
9. Resources/ The prescribed text book for this module is
Prescribed 1. Mohr, P and associates 2015. Economics for South
textbooks African students (5th edition), available in any van
Schaik book shop nationwide.
Recommended textbooks for this module is
1. Parkin, M et al 2013. Global and Southern African
Perspectives Economics 2nd edition.
2. McConnel and Brue. Any edition. Introduction to
Economics. Shelf no 330 in the Library.
3. Mankew. Any edition. Introduction to Economics 4.
For references you can use any Micro-economics text book.

10. Laboratory work / N/A

Practical work /
Experiential
learning
/Cooperati
ve Education
11. Roles 12.1. Students are expected to attend classes always.
and 12.2. They must participation in class activities
responsibilities of 12.3. They must interact with other students in group/team
the Learner work responsibilities
12.4. Students must observe or keep to submission dates for
assignments.
12.5. They must participate in student evaluation of the
lecturer of the module provided by the CHETL department in
your Moodle LSM account.
12.7. Engage in self-directed learning
12.8. Identifying own Learning style
12.9. Identifying reading ability and improving it through the
University support services
 12. Roles Will take up all scheduled lectures and alternative
and arrangements will be made and communicated to the
responsibilities of class and the Programme Coordinator should this be
the Lecturer impossible to do.
13.2 Undertake to give feedback on assessment tasks
timeously and before the next assessment task is due
13.3 Provide the necessary guidance and support to help you
succeed in your course
13.4 Point you to the relevant support service structures
within the University
13.5 Liaise with the CHETL for the evaluation of the module.

13. Assessment Assignment and Math note Submission.

information Date: 22 August 2024

13.1. Assessment plan 1.Test 1. 31 August 2024 E-Block

2. Special test will be announced and will cover all the

chapters.

13.2. Assessment timetable Same as above

Two tests weigh 100% and one assignment weigh 100%

13.3. Rules and towards your examination.
requirements
during
assessment
activities

13.4. Self-assessment To be provided during tutorials by the tutor

activities
 13.5. Assignment details See the attached document at the end of this outline

14. Learner Support

15.1 List of handouts / All the study materials will be provided via Moodle including
support material for the your prescribed textbook.
course / module

15.4 Guidance and Psychologists are available at the University if you seek
Counselling Services counseling.

15.5Using the Library Students are advised to consult with the Faculty Librarian
Vho- Ivy Khangale inside the library offices.

16 Readings

16.1 Compulsory readings by Phillip Mohr

by Parkin . see the above list of recommended reading

16.2 Additional Readings

Assessment Instructions. (assignment) Due date 22 August 2024 in class

Instructions

Make a group of ten members. Submit the list to the class representative, who will assign a group
number for your group. Please do not include the fictitious student numbers in order to make your
group to be ten members (groups that include members who are not registered for eco 1241 will
be penalized.). Eco1241 has 100 students. It is not the lecturers' responsibility to find a group for
you. It is the responsibility of the students to mingle, socialize, interact, and perhaps share some
life experiences in order to form friendships. Read the following article from Business Tech and
answer the following questions.
Assignment.

The one province that has ‘officially entered into a recession’ in South Africa
Malcolm Libera
·9 Jul 2024

The Eastern Cape is in a technical recession due to sharp declines in the construction,
manufacturing, and mining industries, which have put employment on a knife’s edge.
This is according to the Eastern Cape Socio-Economic Consultative Council (ECSECC),
which showed that although South Africa’s economy contracted in the first quarter of 2024,
some provinces were harder hit by poor economic conditions than others.
In the first quarter of 2024, the South African economy shrank by 0.1%, a decrease from the
0.3% growth recorded in the previous quarter.
This growth is lower than the 0.9% rate projected by the IMF for 2024.
Comparing year-on-year, the national GDP decreased by 0.7 percentage points from 0.6% in
the first quarter of 2023.
As the national GDP contracted in the first quarter, four out of nine provinces experienced
positive growth.
The Western Cape and KwaZulu Natal both saw an increase of 0.2%, while the Northern
Cape and Free State recorded a growth of 0.1%.
However, the Mpumalanga province contracted by 0.5%, and the North West and Eastern
Cape provinces experienced decreases of 0.4% and 0.3%, respectively, during the same
period.
Despite most provinces experiencing economic contractions, the Eastern Cape economy
contracted for the third consecutive quarter, entering into a recession in the first quarter
of 2024.
The provincial economy declined by 0.3% in 2024Q1, following a 0.1% and 0.3% contraction
in 2023Q4 and 2023Q3, respectively.
The Eastern Cape’s GDP, at market prices, declined from R368.8 billion in 2023Q4 to R366.9
billion in 2024Q1.
In comparison to other provinces, the Eastern Cape accounted for 7.9% of the national GDP,
while Gauteng (33.9%), KwaZulu Natal (16.6%), and Western Cape (14.2%) were the most
significant contributors.
Only two industries in the Eastern Cape, agriculture and electricity, recorded positive growth.
The largest negative contributors to the negative growth in GDP in the first quarter were
construction (down by 2.9%), manufacturing (down by 1.5%), mining (down by 1.2%), and
transport (down by 0.7%).Limpopo's GDP was a bit sluggish and decreased by -0.2 % in 2024
• Limpopo's GDP growth in 2022 was 1,0 %, down from 5,2% in 2021
• Limpopo contributed 7.7% to the country’s GDP in 2022
• CPI March 2024 Limpopo = 4.3

Questions
1.1. Give a detailed description of GDP. (5)
 1.2. What is a technical recession? (2)
1.3. The IMF projected a 0,9 % increase in GDP for RSA; what do you understand by the
term projected growth? (2)
1.4. What happens during the contraction phase of the Business cycle? (5)
1.5. Explain and use examples to elaborate on GDP at market prices. (5)
1.6. What are the reasons for the decrease in LP GDP? (5)
1.7. What contributed to the negative growth in the Eastern Cape’s construction,
Manufacturing, Mining and Transport. (6)
1.8. As an economist, suggest a solution to the Eastern Cape recession. (5)
1.9. Draw and label the business cycle, then match every province according to the four
business cycle phases. (10)

Total: 45
5 mark for peer participation level
Grand total: 50.
Math note: Due date 22 August 2024 in class
Test 1 will be on the 31 of August 2024 E-block at 8:00am
Make a group of ten and answer the following questions. Answers must be typed.
1. Calculate the equilibrium level of income if C = R100 million + 0,8Y and Ī = R125 million. [5]
2. Consider the following numerical example of the simple Keynesian model with no government spending, taxes or a
foreign sector (all figures in R millions):
C = 100 + 0,9Y
I = 50
Answer the following questions.

a. What is the value of the marginal propensity to consume (MPC) in this model? [2]
b. Use a graph to illustrate the equilibrium level of output. [5]
c. Calculate the equilibrium level of output.[5]
d. In equilibrium, what is the value of consumption spending? Use this number to verify that the sum of C and I
in equilibrium equals the value for equilibrium output you obtained [2] above.
e. What is the value of the multiplier in this economy?[1]
f. Suppose the level of output that creates full employment in the economy is 1 800. Using the multiplier,
determine the level of investment spending that would create full employment in this economy.[3]
3. Explain how the inflation rate, that is usually reported every month in the media, is obtained. Use
hypothetical figures for calculations. [5]

4. Calculate
a. the unemployment rate [6]

Statistics South Africa reported the following data for 2012. Labour force. 17 948 000. Employment, 13
422 000, working age population, 32 786 000.

5. The people at Univen buy only fish and chips. The CPI basket contains the quantities bought in 2024.
The average household spent R60 on fish and R30 on chips in 2023 when the price of fish was R2 per kg
and the price of chips was R5 a packet. In the current year, 2024, fish is R4 per kg and fish is R6 a
packet.
Calculate
a. CPI per basket [3] and
b. the inflation rate[3].
6. UK’s real GDP was 1 360 trillion pounds [£] in 2009 and 1 434 trillion pounds in 2024. UK’s population
was 191.5 million people in 2023 and 193.3 million in 2024.
Calculate.
a. the economic growth rate.[3]
b. The growth rate of real GDP per person [5]
c. The approximate number of years it takes for real GDP per person in the UK to double if the 2010
economic growth rate and population growth rate are maintained.[4]

Grand total : 50.