South Africa is currently experiencing an economic downturn with key macroeconomic variables further indicating a cause for concern

One of the South African governments' policies to get out of this undesirable situation include setting price ceilings floors. Price ceilings and floors indicate the highest and the lowest cost of a product in the market, respectively. Some of the macroeconomic factors that may have led to a downturn include inflation, which is the abrupt and rapid increase in product prices. Setting price ceilings and price floors may reduce the downturn and control the situation caused by a rapid price increase.

Another macroeconomic factor that may have lead to a downturn is a decline in interest rates hence leading to a rise in the money supply. An incline in the money supply causes an increase in prices, contributing largely to a decline in the economy. When interest rates are low, people tend to borrow more hence leading to the excess money supply. Limiting the money lending levels and amounts may reduce the downturn caused by a decline in interest rates and an increase in the money supply.