ECS3703 Assignment 1 (DETAILED ANSWERS) Semester 1 2026 - DISTINCTION GUARANTEED

ECS3703 Assignment 1 (DETAILED ANSWERS) Semester 1 2026 - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED Answers, guidelines, workings and references.. Assume that the Southern African Development Community (SADC) countries operate under flexible exchange rate systems, and they desire to maintain balanced current accounts and reach full employment. (a) Explain which macroeconomic policy these countries should use to achieve this under a scenario of perfect capital mobility and imperfect capital mobility, and why? With the aid of diagrams, briefly explain how the governments of the Southern African Development Community (SADC) can use the relevant policies mentioned in (a) under each scenario Suppose the Southern African Development Community (SADC) region intends to adopt a common currency for its member countries, as it would be economically beneficial for the participants (nations). (a) What is this arrangement called (b) In your view, would the Southern African Development Community (SADC) benefit from this kind of arrangement? Explain your answer. (10) (c) Discuss the risks and benefits associated with the adoption of a common currency