Money stock (M) can be determined endogenously or exogenously (there are two different approaches to determining the value of M)

Economics Dec 14, 2020

Money stock (M) can be determined endogenously or exogenously (there are two different approaches to determining the value of M). Explain which approach is used in the South African macroeconomy.

Expert Solution

South Africa used an endogenously approach to determine the money stock (M). Under this approach, it is expected that the economy's growth is produced within the system due to the internal process. The endogenous approach depicts that enhancing the human capital of a country can lead to economic growth. The development of technologies, effective and efficient production methods also helps enhance the country's economic growth.

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