Answer to Question #53704 in Microeconomics for Modulaesi Vena

Question

Graphically illustrate and explain the impact of eskom power cuts on the south african economy?

Answer 1

Eskom power cuts will cause the decrease in aggregate supply, so the AS curve will shift to the left, which will cause in the nearest future the decrease in real GDP and increase in the price level of the south african economy. Such situation will be bad for the economy as a whole.