ECONOMY
GRADE 9
ECONOMIC SYSTEMS
SHORT QUESTIONS
1. Complete the following table:
Type of Economic System
Planned
Market
Who decides?
What to produce?
How to produce?
For whom to produce?
Type of Economic
System
Who decides?
Market
Planned
Government
Individuals and businesses
What to produce?
Government makes all Businesses use supply and
economic decisions
demand and competition between
them to decide
How to produce?
Government decides
how to produce and
services
The government
For whom to produce?
Businesses decide how to produce
goods and services.
Consumers
2. Complete the following table:
Characteristic
Government control
Profit Motive
Ownership of factors of
production
Choice of occupation
Allocation of resource
Distribution of output
Prices
Economic growth
Privatization
Bureaucracy
Interest
Decisions
Private Enterprise
Planned
economy
Market economy Mixed economy
Characteristic
Planned
economy
Central
Market
economy
No control
Mixed economy
No
Yes-the driving
force
Private
Yes – the driving force
People are trained
and educated
according to the
needs identified by
government
Government
decides what the
production targets
are and allocates
resources
accordingly
Government
distributes not only
capital goods but
also consumer
goods
People can
choose their field
of study and
level of
education
Consumers
determine how
resources are
allocated
People may usually
choose their
occupation
In market place
where goods are
exchanged for
money
Fixed – set by
government
Determined by
government
Competition
checks price
Consumer
Privatization
None
Privately owned
Bureaucracy
Very important
because of central
planning and
centralization
Interest
Society
Not much
because
government’s
officials do not
play a
fundamental role
Personal
Market free to operate
according to supply
and demand.
Government has
certain license
requirements
Competition determine
prices
Consumer and
government plays a
role
Privately and publicly
owned. Increases
scope of market
Very little
Decisions
Central
government
Government is
responsible for
production
Government
control
Profit Motive
Ownership of
factors of
production
Choice of
occupation
Allocation of
resource
Distribution of
output
Prices
Economic growth
Private Enterprise
Government
Individuals decentralized
Can produce,
buy and sell as
much as they
like
Semi-control
Private
Government has key
industries for whole
economy. Provincial
incentive schemes.
Personal, society
Individual
Government
Government provided
certain services.
Others by private
individuals
GIVE THE TERM FOR THE FOLLOWING:
1. The way in which a country runs its economy. Economic system
2. A system that a country chooses to allocate its resources and distribute its
goods and resources. Economic system
3. An economic system in which government make all the decisions about the
production and consumption of goods and services. Planned economy
4. An unplanned economy in which land, property and business are owned by
private people not the government. Market economy
5. The government as well as people and businesses owns the land and natural
resources
Mixed economy
6. The increased integration of businesses and governments across the world.
Globalisation
7. Highly qualified people in developing economies move to developed
countries. Brain drain
8. Dump cheap surplus products in developing countries. Dumping
THE CIRCULAR FLOW
SHORT QUESTIONS
1. Study the passage and then answer the questions below.
Dollf Winters is a tourist from the Netherlands who are on holiday in South Africa for two weeks.
Dan Smith and his family sold t-shirts with the South African flag on to Dollf and other tourists
along the beach under the name of "Outrages t-shirts". They have a permit obtained from the
Cape Aghalhus Municipality.
Complete the table below by selecting examples from the passage that
represents the participants in the economic cycle.
HOUSEHOLDS
BUSINESSES
GOVERNMENT
FOREIGN SECTOR
HOUSEHOLDS
Dan Smith and his family
BUSINESSES
Outrages t-shirts
GOVERNMENT
Cape Aghalhus Municipality
FOREIGN SECTOR
Dolff Winters / Netherlands
2. Read the following statements carefully. Then identify whether these countries
have an open or a closed economy.
2.1 South Africa exports iron-ore to China. Open
2.2 Zimbabwe don’t let foreigners buy shares in his companies. Closed
2.3 Japan does not allow its citizens to work in other countries. Closed
2.4 South Africa lend R200 million to Senegal. Open
2.5 Russia does not allow its citizens to work in other countries. Closed
2.6 England have invested money in oil companies in Nigeria. Open
3. Provide a different name for:
3.1 Households. Consumers
3.2 Businesses. Producers
4. What is the remuneration for the following factors of production?
4.1 Natural Resources. Rent
4.2 Labour. Wages/Salaries
4.3 Capital. Interest
4.4 Entrepreneurship. Profit
5. Study the passage and answer the questions that follow.
John's family consists of himself, his father and mother and two younger sisters. His
mother is a teacher who works for the WCED and his father works at Checkers. He
and his two sisters are both still at school. Their parents' income is spent on food,
clothing, rent, transportation and other expenses that arise. John's father also repair
electrical appliances in his garage to work for extra income, under the name
"Electrocare".
5.1 Identify the following from the passage.
A. The household.
John's family / John, his father and mother and two younger sisters.
B. Businesses.
Checkers/ “Electrocare”.
C. Government.
WCED.
5.2 Why is John's father part of households and businesses?
As part of the family (households) and his business "Electrocare"
(Businesses).
5.3 Give two examples of goods and services from the text that John and his
family need.
Food and clothes
5.4 What factor of production is owned by John's mother and father and what
do they receive as compensation?
Labour - salaries.
5.5 Briefly explain the main function of:
A. Households.
Provide the factors of production.
B. Businesses.
Manufacture goods and services.
6. Give two other names for the government. The state / public sector. (Any relevant
answer)
7. Identify two companies owned by the state. Eskom / Telkom / SABC. (Any
relevant answer)
8. Provide two examples of goods and services provide by the government.
Education, Health. (Any relevant answer)
9. Explain two functions of the government. To make laws. Collecting taxes. (Any
relevant answer)
10. How do the government finance services it provides? Taxation.
11. What levels of government are represented by the following?
11.1 WCED. Provincial
11.2 Theewaterskloof Municipality. Local
11.3 The Minister of Education. National
12. Explain the role of the government as a producer and consumer in the economic
cycle.
Producer: Provide goods and services to households and businesses.
Consumer: Buying factors of production from households and buying goods and
services from businesses.
13. Explain in your own words the concepts “imports” and “exports”.
Imports: Goods bought from a foreign country.
Exports: Goods sold to another country.
14. Who is South Africa's largest trading partner in terms of imports and exports?
China
15. Study the passage and answer the questions that follow.
Peter's father works at Pick and Pay. They buy their groceries at Pick and Pay at the
end of each month.
15.1 Which roleplayers in the cycle are represented by Peter's father and Pick and
Pay?
Peter's Father- Households
Pick and Pay- Businesses
15.2 Explain the flow of goods and services between the roleplayers mentioned in
15.1.
Pick and Pay provides the groceries. Peter and his family receive their groceries
from Pick and Pay
15.3 Which market forms part of the flow mentioned in (5.1.2)
Market for goods and services
15.4 Which factor of production is mentioned in the passage?
Labour
15.5 Explain the flow of the factor of production mentioned in (5.1.3) between the
roleplayers in the cycle.
Peter's father provide his labour to Pick and Pay
15.6 Which market forms part of the flow in (5.1.5)?
Market for factors of production
16.
Complete the table. Read the statements below through carefully and then
make a cross By the right participant.
Flows in the cycle
Receive tax.
B. Pay company tax.
C. Receive wages.
D. Receive payments for goods and services
E. Pay personal income tax.
F. Receive profit from sales of goods
and services.
G. Pay rent.
H. Receive VAT from the sales of goods
and services.
I. Pay teachers' salaries.
J. Rent received on savings.
Households Businesses Government
Flows in the cycle
Households Businesses Government
A. Receive tax.
X
B. Pay company tax.
C. Receive wages.
X
X
D. Receive payments for goods and services
X
E. Pay personal income tax.
F. Receive profit from sales of goods
and services.
X
G. Pay rent.
H. Receive VAT from the sales of goods
and services.
X
X
X
I. Pay teachers' salaries.
J. Rent received on savings.
X
X
GIVE THE TERM
1. A model that describes the movement of money, goods and services and
factors of production in the economy and between participants. Circular flow
2. An economy that don’t interact with other economies or trade with them.
Closed economy
3. An economy that interact with other economies or trade with them. Open
economy
4. A market is the interaction between a buyer and a seller. Market
5. Market for goods and services. Product market
6. Market for factors of production. Factor market
7. Primary consumer of goods and services. Households
8. Owners of the factors of production. Households
9. Uses the factors of production to produce goods and services to sell on the
product market. Businesses
10. Produce goods and services, e.g. education, health and security services.
The government
11. Imports from other countries and Exports to other countries. Foreign sector
12. The flow of goods and services and factors of production. Real Flow
13. The flow of money (payments and income). Money Flow
ECONOMY
GRADE 9
Paragraph type questions
(Remember to include “Accept any relevant answer”, where applicable)
TOPIC: ECONOMIC SYSTEMS
Planned economy
Discuss the characteristics of a planned economy.






(5x2) (10)
Government owns the land, natural resources, factories and the farms
People are not allowed to own property
Government decides what should be produced and how it should be sold for
Workers don’t have a choice about what they want to do
Government gives workers everything they need to live, including their food
Examples of countries with planned economies are Cuba, Libya, India, China,
North Korea, Iran, Saudi Arabia
Market economy
Discuss the characteristics of a market economy.







(5x2) (10)
Aim of business is to make a profit
Entrepreneurs decide what goods and services to produce
Businesses and people borrow money from banks
Workers can choose what work to do and who they want to work for
Consumers, government and businesses spend money on goods and services
Workers and businesses makes money from producing goods and services
Government makes money from taxes
Mixed economy
Discuss the characteristics of a mixed economy.







(5x2) (10)
Private individuals own and control the factors of production
Entrepreneurs decide what to produce
Entrepreneurs decide how to produce
Individuals decide which goods and services will be used
Capital comes from banks, shareholders and the government through spending
of taxes
Government spends taxes on education, housing and clean water
South African economy is a mixed economy
TOPIC: CIRCULAR FLOW
Briefly discuss the role of the participants in the circular flow.
(5x2) (10)
Households





All people that live together and make economic decisions
Primary consumer of goods and services
They are the owners of the factors of production and have an influence on what
businesses produce
They receive an income (rent, salaries, interest and profit) by making the factors
of production available to businesses and the government
Households pay taxes to the government
Businesses





Businesses use the factors of production to produce goods and services.
They sell the goods and services on the product market.
Economically active members of households provide the factors of production
Businesses provide and produce usable goods and services for shops, offices,
factories and mines
Businesses pay taxes to the government
The government





Levels of government: Central, Provincial and Local government
Produce public goods and services, for example education, health and security
services
Make use of the factors of production
The government buy goods and services from businesses, for example, motor
vehicles
The government provides public goods and services to households and
businesses
Foreign sector




Imports from other countries.
Exports to other countries.
Make payments for imports (expenditure).
Receive money for exports (income).
Note to teacher:
o The participants can be asked separately, e.g. “Briefly discuss the role of
households/businesses/the government/foreign sector in the circular flow.”
o Headings = 1 mark each
o Examples = 1 mark each
ECONOMY:
GRADE 9
SECTION A:
ECONOMIC SYSTEMS:
1.
Education is provided by government and private institutions in a …
A
B
C
D
2.
South Africa’s economic system is an example of...
A
B
C
D
3.
Mixed economy.
Traditional economy.
Planned economy.
Market economy.
The market economy originates from the theories of …
A
B
C
D
5.
Globalisation
Planned economy
Mixed economy
Market economy
All economic activities are driven by profit motive in …
A
B
C
D
4.
Mixed economy.
Market economy.
Planned economy.
Traditional economy.
Adam Smith.
Karl Marx.
Friedrich Engels.
Fidel Castro.
The way in which the economies of most of the countries in the world are
interconnected,
making the world virtually one big marketplace, is called...
A
B
C
D
Capitalism
Marxism
Globalisation
Communism
6.
The economic system of the USA is an example of a …
A mixed economy.
B market economy.
C planned economy.
D globalisation.
7.
A planned economy is where…
A. economic decisions are made by both the government and private
individuals.
B. there is no government and no private ownership of resources.
C. all economic decisions are made by the government.
D private individuals are responsible for making all economic decisions.
8.
A market economic system is where…
A private individuals are responsible for making all economic decisions.
B all economic decisions are made by the government.
C the tribe manages the economy according to their needs.
D bartering is used by the government to provide for the needs of the
population.
9.
Which of the following characteristics define a mixed economy?
A Government controls the factors of production.
B Profit earned is kept by private individals.
C Government decide what to produce.
D all economic decisions are made by the government
10. Which of the following questions define an economic system?
A What,how much, how and for whom are goods being produced?
B How much tax will be paid?
C What is the price of the products?
D How many people live in a country?
THE CIRCULAR FLOW:
1.
In the economic cycle wages, rent, interest and profit are exchanged for...
A
B
C
D
2.
investments.
money.
factors of production.
goods and services
The three participants in a closed economy are:
A
B
C
D
government, foreign sector, businesses
government, foreign sector, households
businesses, households, foreign sector
government, businesses, households
3.
The factor market determines the price at which the factors of production are
sold. These factors are...
A
land, labour, capital and goods
B
land, labour, capital and entrepreneurship
C
rent, wages, salaries and profits
D
land, rent, natural resources and businesses
4. Circular flow is a simplified model that describes the…..
A
B.
C
D
inflation rate.
interdependence of participants, markets and flows in an economy.
income of the state.
business cycle of the economy.
5. A country has a closed economy when….
A
B
C
D
they buy goods from other countries.
they sell goods to other countries.
they don’t trade with other countries.
there is monetary flow in and out of the country.
6 A country has an open economy when…
A
B
C
D
they don’t trade with other countries.
there is no monetary flow in and out of the country.
they don’t buy goods from other countries.
they trade with other countries.
7. Who is not a participant in the circular flow?
A
B
C
D
Households.
Businesses.
Trade Unions.
Government.
8. The real flow is the……
A
B
C
D
the flow of payments of goods and services
the flow of goods and services and factors of production.
the flow of payment of taxes.
the flow of payment for factors of production.
9. The money flow is….
A
B
C
D
the flow of income and payment.
the flow of goods.
the flow of factors of production.
the flow of services.
10. Activities on the factor market include…..
A
B
C
D
selling goods and services.
selling of factors of production.
buying of goods and services.
buying of equipment.
ECONOMY
Grade 9
Matching
Economic systems
Column A
Column B
Economic Systems
Set rules to determine how the resources
will be allocated
China
A country which have a Centrally planned
economic system
South Africa
A country which follows a Mixed
economic system
Centrally planned economic system
An economic system in which
government make all the decisions about
the production and consumption of goods
and services.
Free market economic system
An unplanned economy in which land,
property and business are owned by
private people not the government
Globalisation
The increased integration of businesses
and governments across the world.
The Internet is one of the main driving
forces behind this phenomenon
Globalisation
Mixed economic systems
Combine government and private
business enterprises to ensure economic
growth
Brain drain
Highly qualified people in developing
economies move to developed countries
Dumping
Die verkoop van goedere aan ander
lande teen 'n prys laer as die
produksiekoste.
The circular flow
Column A
Column B
Real flow
The movement of goods and services
Factor market
Labour, entrepreneurship, land and
capital are traded in this market
Circular flow model
Illustrates the flows between participants
in the economy
Households/Consumers
Primary participants and owners of the
factors of production
Closed economy
An economy that does not include the
foreign sector
Market
A place or mechanism through which
buyers and sellers meet to do business
Business Sector
Use factors of production to produce
goods and services
Open Economy
An economy where goods and services
are imported and exported.
Factors of production
Natural resources, Capital and labour
Money flow
The flow of payments between
participants in the economy
ECONOMY
GRADE 9
ECONOMIC SYSTEMS
Indicate whether the following statements are TRUE or FALSE. Write only the word
true or false in the space provided.
1.1.1
STATEMENT
ANSWER
An economic system is the way in which people decide to organise
the production, distribution and consumption of goods and
services.
True
1.1.2
What, how and for whom to produce are the basic economic questions
that every society must answer.
True
1.1.3
All societies answer the three basic questions in the same way.
False
1.1.4
In a command economy, a central authority makes the decisions
regarding what, how and for whom to produce.
True
1.1.5
The global economy is characterized by free trade.
True
1.1.6
In a market economy, only the government decides what goods and
services are produced.
False
1.1.7
In a command economy, the aim of businesses is to make a profit.
False
1.1.8
In a command economy, the government decides how the goods
and services that are produced will be distributed.
True
1.1.9
In a market economy, decisions regarding production and
consumption result from the interaction of consumers and
producers.
True
1.1.10
The USA is an example of a command economy.
False
THE CIRCULAR FLOW
Indicate whether the following statements are TRUE or FALSE. Write only the word
true or false in the space provided.
STATEMENT
ANSWER
1.1.1
An economy that interact with other economies or trade with them is
a closed economy.
False
1.1.2
Technology is a factor of production.
False
1.1.3
Interest is the remuneration for Capital.
True
1.1.4
A factor market is a market for goods and services.
False
1.1.5
Households are the primary consumer of goods and services.
True
1.1.6
The government receives VAT from the sale of goods and services.
True
1.1.7
The flow of goods and services is a real flow.
True
1.1.8
The government is made up of the central and local government.
False
1.1.9
Businesses pay taxes to Households.
False
1.1.10
The government provides general goods and services to
households and businesses.
False