1.1. A fiscal surplus occurs when

1.2. In November 2018, the South African Monetary Policy Committee decided to increase interest rates by 0.25% to 6.75%. This decision affected the currency of South Africa, the Rand.

Analyse the likely impact of an increase in interest rates on the currency of South Africa.

1.3. US President Donald Trump introduced lower business taxes in the hope of making the US more competitive globally. In 2017, business taxes in the US were 35% and a new lower rate of 21% was introduced in 2018. Donald Trump has plans to lower this to 15% in the future.

With reference to the data above and your knowledge of economics, assess the likely effectiveness of lower business taxes in stimulating investment in a country such as the US.