QUESTION ONE (35 MARKS)
The patterns in demand can seem mysterious at first, but if you familiarize yourself with the ideas contained in customer demand theory, you can make reliable predictions about customer behavior. Many thinkers over many years developed this theory, and it helps anticipate reactions to changes in the way people market products and services.

Source: Johnston, K. (2023). https://smallbusiness.chron.com/customer-demand-theory-37253.html

Based on the scenario above conduct a critical discussion on the demand determinants. Provide clear commodity examples in your discussion. (20)

Read the extract below and answer the question that follows. (15)

Evidence of the existence of disagreements among economists is plentiful and notorious. Whether their disagreements are more frequent and more serious than those in other fields is a question that needs to be answered. Certainly, their disagreements appear to be greater and this is just enough to justify an enquiry into the causes.

In light of the above extract, explain critically why economists disagree

QUESTION TWO (25 MARKS)

2.1 Discuss with the incorporation of examples the five-macroeconomics objectives and demonstrate
how each can be used to explain a country’s economic performance. (25)

QUESTION THREE (30 MARKS)

Read the following case study and answer the question that follows:

SA banks accused of ‘collusion’
Apart from the multiple allegations of overcharging of black people by the banks, made by commentators, consumers, and their legal representatives alike in recent years, several bank accounts belonging to individuals and companies have also been on the receiving end of unqualified prejudice, after they have been pushed out of the banking system with no apparent rationale or even legal justification.

Whether it can be described as a trend or not, is not the subject of discussion, but the increasing prevalence of this has prompted some individuals and politicians to accuse certain South African banks of being used as a political tool by those who have the financial muscle to influence decision-making to exclude political opponents.
In March 2019, the EFF called for a judicial commission of inquiry with financial forensic capacity, into alleged discriminatory practices by banks against black people.
The party claimed that black homeowners were charged higher interest rates than their white counterparts for home loans.
“The scope and mandate of the commission of inquiry should include the withdrawal of banking licences of banks that discriminate on the basis of race. The scope should also include the commission’s power to instruct the banks to pay back all the monies overcharged to black people.”
In June last year, EFF leader Julius Malema accused banks of being involved in political battles and said his party would engage in campaigns against some of the biggest banks in the country.
At the time, Malema said: “Powerful politicians with the backing of wealthy individuals who have shares in banks use their financial muscle and nonsensical court decision (so) that they can terminate people’s accounts without any due process to fight political battles, because they know if you don’t have an account you will not be economically active and when you are not economically active, there is no way you can be impactful politically.”
Absa and FNB are among the banks that have been accused of perpetuating apartheid-era tactics in
the country’s embattled financial services sector.

Industry experts, civil society and political parties have previously raised these concerns after accounts belonging to black-owned businesses continued to be closed “with impunity”.
Private financial consultant and investigator, Emerald van Zyl, said the apartheid tactics were in full
swing and that black people, as well as their businesses, were viewed as a “risk”.

Director and research head at Firstsource Money and founding executive board member of London- based Monetary Reform International, Redge Nkosi, said it was unimaginable that banks were closing accounts of individuals or firms that depend on them for their real economic activities.
He said the South African banking system was oligopolistic in nature and thus banks tend to act in
“concert”.

He said this was the challenge researchers and academics see in the banking system, and that was why calls for the diversity of banking systems and models were being loudly made.
“It is common knowledge that SA banks are discriminatory in their practices. They do, obviously, not accept this but many people have proven it. But they also exert considerable influence over a number of issues in the economy that are in many ways political in tone.”
Several of the listed companies within the broader Sekunjalo Group have had to communicate to their shareholders and staff that they had received notice of the imminent closure of their transactional accounts. These have been met with either uproar or jubilation – dependent on which side of the
“political” fence the observer sits.

The African Transformation Movement spokesperson, Sibusiso Mncwabe, expressed shock and
dismay at Absa’s and then FNB’s moves, which it said, were unwarranted.

The party also questioned the criteria which banks have used in targeting certain companies to summarily terminate their facilities, and in which law enforcement agencies have not been involved to prove any wrongdoing.
The battle lines are drawn as South Africans take the fight for financial freedom to the courts.

Question: (30)

Describe the type of market structure the above case study is based on.

Thereafter examine in detail characteristics of this market structure in line with the state of the South African banking industry.

Answers to Above Questions on Economics

Answer 1: Demand determinants are significant from the point of view of affecting the quantity of a product or a service that consumers are ready to buy. When it comes to demand determinants, there are several demand determinants and some of these are discussed as follows:

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