ECONOMICS
1|Page
2024
Learner Activity Book
Grade12
Grd 12 LB V3
SUBTOPIC/SECTION
PAGE
Across
VERBS
3-4
1-2
CIRCULAR FLOW
5
BUSINESS CYCYLES
15
PUBLIC SECTOR
26
FOREIGN EXCHANGE MARKETS
39
PERFECT MARKETS
48
IMPERFECT MARKETS
58
MARKET FAILURES
76
PROTECTIONISM & FREE TRADE
90
ECONOMIC GROWTH & DEVELOPMENT
99
REGIONAL DEVELOPMENT
111
ECONOMIC & SOCIAL INDICATORS
122
3-5
6-7
8-9
TERM 2
1-2
3-4
5-6
TOPIC
MACROECONOMICS
WEEK
MICROECONOMICS
TERM 1
TERM
ECON PURSUITS
7 -8
1
3
4
5
6
CONTEMPORARY
ECON ISSUES
TERM 3
2
ECON GRD 12 LAB
132
INFLATION
142
TOURISM
ENVIRONMENTAL SUSTAINABLITY
P a g e 2 | 162
152
VERBS:
WORD
ACCOUNT
ANALYSE
APPLY
ARRANGE
ARGUE
CALCULATE
CLASSIFY
COLLABORATES
COMMENT
COMPARE
CONCUR
CONTRAST
CRITICALLY EVALUATE
DEFINE
DEMONSTRATE
DERIVE
DESCRIBE
DETERMINE
DISCUSS
DISTINGUISH*
DIFFERENTIATE*
ELABORATE
EVALUATE
EXAMINE
EXPLAIN
GIVE
HOW
IDENTIFY
ECON GRD 12 LAB
MEANING
To answer for - explain the cause of - so as to
explain why
Separate, examine and interpret critically
Use knowledge or skill to solve a particular
problem
To prepare for an event, to put in proper order
Put forward reasons in support of or against a
proposition
Find an answer using mathematical methods
(show the working unless instructed not to do
so)
To divide into groups or types so that things
with similar characteristics are in the same
group - to arrange according to type or sort
To work jointly with, to cooperate with others
Write generally about
To point out or show both similarities or differences
To agree with a position
Stress the differences, dissimilarities, or unlikeness of things, qualities, events or problems
State a point or a fact then argue for or against
Give the concise and clear meaning
To show or make clear - to illustrate and explain
- to prove by reasoning and evidence - can give
examples
Manipulate a mathematical equation to give a
new equation or result
List the main characteristics of something - give
an account of
To resolve, to fix conclusively, resolve, settle,
decide
Examine by means of argument, presenting
both sides and reaching a conclusion
To recognise or understand the difference between two things
Highlight the difference between two things,
linking particular differences
Explain in more detail, in-depth analysis
To make an appraisal or express an opinion/ argue for or against
To look at or closely or carefully and in detail in
order to discover something
To make clear, interpret and spell out the material you present
To state facts without discussions
In what way/ by what means / in what manner
Give the essential characteristics of to name
P a g e 3 | 162
WORD
IMPACT
INTERPRET
INTERVIEW
JUSTIFY
LIST
MENTION
MOTIVATE
NAME
OUTLINE
PERSUADE
PREDICT / FORECAST
PROVIDE
QUOTE
RECOMMEND
STATE
SUBSTANTIATE
SUGGEST / PROPOSE
SHOW
TABULATE
WHAT
WHEN
ECON GRD 12 LAB
MEANING
Implication e.g. Positive or negative
To give an explanation of – to give the meaning
of
To obtain facts or opinions through inquiry or
examinations or various sources
Prove or give reasons for decisions or conclusions, using logical argument
Write an itemised series of concise statements /
words
Refer to relevant points
Support your argument, normally taking a positive or negative stance
To state something – give, identify or mention
Give a summary, using main points and leaving
out minor details
To urge, influence, move, entice, impel by argument
To say what you think will happen – to foretell – to
say in advance
To state facts without discussions
Take the answer verbatim from the case study/ extract/ scenario
To suggest a course of action
To present information plainly without discussion
To validate, authenticate or prove
To propose an explanation or solution
To make clear – to point out – to explain
To put in table form, set up in columns and rows
Contextualise the question like: what benefits…,
what negative impact…; what advice?...
When normally denotes a timeframe, or a particular period
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TOPIC 1:
CIRCULAR FLOW MODEL
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following
questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 . A… is simplified representation of reality
A
Spending
B
Model
C
Flow
D
Production
1.1.2 The circular flow consists of 3 major processes.
A
Production, income, and spending
B
Scarcity, utility, and wealth
C
Resources, production, and spending
D
Spending wants and income
1.1.3 When … the value of the basic flow expands and aggregate production increases
A
Leakages exceed injections
B
S+T+M is greater than I+G+X
C
Injections exceed leakages
D
Expenditure exceeds the money flow
1.1.4 Financial instruments traded in the money market include…
A
labour, capital, and natural resources.
B
equities and long-term borrowing.
C
goods and services.
D
treasury bills, and bank debentures.
1.1.5 An alternative term used to describe the income method of national accounts
A
Gross Value Added
B
Value added approach
C
Factor income approach
D
Conversions
ECON GRD 12 LAB
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1.1.6 An index used to convert current prices to constant prices.
A
GDP deflator
B
Taxes on production
C
Consumption of fixed capital
D
Real GDP
1.1.7 … represents the money value of the cost of employment of factors of
production
A
Basic prices
B
Market prices
C
Factor cost
D
Gross national product
1.1.8 Consumption of fixed capital is used to calculate GDP at …
A
Factor cost
B
Basic prices
C
Market prices
D
Basic cost
1.1.9 A set of internationally agreed standards and recommendations through which national accounting aggregates are prepared.
A
Migration
B
Expenditure method
C
South African Reserve Bank
D
System of National Account
1.1.10 Is used to make provision for any errors or omissions that may have occurred in
the derivation of GDP according to the expenditure method
A
Consumption by households
B
Residual item
C
Consumption spending by government
D
Exports excluding non-factor services
ECON GRD 12 LAB
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Real flow
1.2.2 Multiplier
1.2.3 Marginal Propensity to
Save
1.2.4 Money flow
1.2.5 Leakage
1.2.6 GDP
1.2.7 Factors of production
1.2.8 Factor market
1.2.9 Model
1.2.10 Double counting
COLUMN B
A. The flow of spending
B. The flow of money
C. The portion of an increase in income that is not
consumed.
D. The ration between the eventual change in income
and the initial investment.
E. The flow of goods and services.
F. Savings
G. Inputs into the production of goods and services
H. Total value of all goods and services produced
within the boundaries of a country in a given period
I. Where labour, entrepreneurship, land and capital
is traded
J. Pensions added to the national income figures
K. A simplified representation of reality
1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 Money taken from the economy, for example savings, taxes, and imports.
1.3.2 An initial change in spending results in a much bigger change in national income.
1.3.3 The sector that needs to be included for the economy to be regarded as an open
economy
1.3.4 An economy that does not take part in international trade.
1.3.5 The process whereby a relatively small change in injections results in a
proportionally larger increase in national income.
1.3.6 A model which illustrates the flows between participants in the economy
1.3.7 An economy that includes the foreign sector
1.3.8 The total value of all final goods and services that are produced within the borders
of a country.
1.3.9 The adding of more money to the circular flow, which will increase quantity of
money in the economy.
1.3.10 The movement of money in the form of income and expenditure.
1.3.11 A group of people living together.
1.3.12 All the international transactions that take place across political borders.
1.3.13 Income that the participants prefer not to spend.
1.3.14 The market in which financial securities are traded.
1.3.15 The part of macroeconomics that consist of the accounting records of a country’s
total production, income and expenditure.
ECON GRD 12 LAB
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SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a
sentence but merely few words or a phrase. This MUST be done in bullet form.
These types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1. List the TWO participants in a closed economy.
(2 x 1)
2.2. List TWO methods by which the gross domestic product can be calculated (2 x 1)
2.3. List the TWO examples of injections in the circular flow.
(2 x 1)
2.4. List the TWO most important sub-types of financial market
(2 x 1)
2.5. List the TWO sectors that are used to calculate the gross value added at basic prices
2.6. Name TWO real flows between business and government.
(2 x 1)
2.7. Name TWO examples of leakages in the circular flow
(2 x 1)
2.8. Name TWO examples according to which product market can be divided
(2 x 1)
2.9. Name TWO components of compensation of employees.
(2 x 1)
2.10. Name TWO examples of government expenditure.
(2 x 1)
QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
Why is the gross national product of South Africa generally lower than the gross
domestic product?
(1 x 2) (2)
3.2
How does the MPC relate to the multiplier?
(1 x 2) (2)
3.3
How will the multiplier be influenced when a country experience net leakage?
(1 x 2) (2)
3.4
When is the circular flow in equilibrium?
(1 x 2) (2)
3.5
What is the effect of adding the value of intermediate goods when calculating
GDP?
(1 x 2) (2)
3.6
How will savings be affected by an increase in the marginal propensity to
consume?
(1 x 2) (2)
3.7
What determines the size of the multiplier?
(1 x 2) (2)
3.8
What is the effect of adding the value of intermediate goods when calculating
GDP?
(1 x 2) (2)
3.9
How is national income determined in the four-sector economy?
(1 x 2) (2)
3.10 Why is it important to calculate real GDP?
(1 x 2) (2)
ECON GRD 12 LAB
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QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 4.1:
4.1. Study the information below and answer the questions that follow.
4.1.1 Name one production factor
(1)
4.1.2 Give one example of taxes on products.
(1)
4.1.3 How will national income be influenced by the above leakages and injections?
(2)
4.1.4 How would you convert GDP to GNP?
(2)
4.1.5 Calculate the change in national income caused by the investment above.
Show ALL calculations.
(4)
MIDDLE ORDER PARAGRAPH
4.1.6 How can the household, as an important participant in the circular flow model,
contribute to building the economy?
(8)
4.1.7 Discuss the multiplier and its effect on the national income if the marginal
propensity to consume (MPC) is 0,6 and investment increases by R10 bn. (8)
HIGHER ORDER PARAGRAPH
4.1.8 Analyse the importance of calculating real GDP?
(8)
4.1.9 Evaluate the impact on the circular flow if leakages are greater than injections. (8)
ECON GRD 12 LAB
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QUESTION 4.2:
4.2. Study the graph below that depicts a simplified two-sector economy
(where E = C + I) and answer the questions that follow.
E=Y
Expenditure (E)
E¹ = 30+ 0.5Y
30
E∘ = 20 + 0.5Y
20
Income (Y)
40
60
4.2.1 Name the TWO sectors involved in deriving the macro-economic multiplier.
(1)
4.2.2 What is represented by the line E = Y?
(1)
4.2.3 Explain is the relationship between MPC and multiplier?
(2)
4.2.4 Use the formula, k = ΔY/ΔJ, to calculate the multiplier (k) for the above scenario.
(2)
4.2.5 Calculate the multiplier, using the formula, k = 1/ (1 – MPC), when the marginal
propensity to consume (MPC) = 0.8. Show calculations.
(4)
MIDDLE ORDER PARAGRAPH
4.2.6 Explain leakages and injections.
4.2.7 Discuss the role government plays in the circular flow model.
(8)
(4 x 2) (8)
HIGHER ORDER PARAGRAPH
4.2.8 How does business sector contribute to the circular flow?
4.2.9 Why is it important for a country to calculate national income?
ECON GRD 12 LAB
(8)
(8)
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QUESTION 4.3:
4.3. Study the following graph and answer the questions that follow:
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Name any ONE leakage in an economy.
What does the 45 line in the graph above represent?
Briefly describe the term autonomous consumption.
Explain the shift from AE0 to AE1.
Calculate the multiplier when individual spending on consumption is
60%. Show all calculations.
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 Discuss the participants’ interaction in the economy with the product and
foreign exchange markets.
(8)
4.3.7 Explain the interrelationship between households and businesses in the
circular-flow model.
(8)
HIGHER ORDER PARAGRAPH
4.3.8 How has the covid 19 been contributing to a lower gross domestic product in
South Africa in 2021?
(8)
4.3.9 How could an increase in investment contribute towards a higher national income
in the economy?
(8)
ECON GRD 12 LAB
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QUESTION 4.4:
4.4. Study the diagram below and answer the questions that follow.
4.4.1 Identify the value of marginal propensity to save (MPS) in the
diagram above.
(1)
4.4.2 Name the leakage that relates to the foreign sector.
(1)
4.4.3 Briefly describe the term autonomous consumption.
(2)
4.4.4 Explain the importance of savings in the economy.
(2)
4.4.5 Use the marginal propensity to consume (MPC) in the diagram above to
determine the value of the multiplier. Show the formula and ALL calculations.
(4)
MIDDLE ORDER PARAGRAPH
4.4.6 Discuss how the expenditure GDP(E) method is used to determine gross
domestic product.
(8)
4.4.7 Discuss the multiplier effect on the national income.
(8)
HIGHER ORDER PARAGRAPH
4.4.8 How do export and imports affects the economy?
4.4.9 How does gross capital formation impact the economy positively?
ECON GRD 12 LAB
(8)
(8)
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QUESTION 4.5:
4.5. Study Diagram below and answer the questions that follow
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
What is depicted in the diagram above?
(1)
Which participant is the major consumer in the economy?
(1)
Briefly describe the term circular flow.
(2)
Discuss the role of the factor market in the circular flow
(2)
Evaluate the difference between "constant" and "current" prices in calculating
economic growth.
(4)
MIDDLE ORDER PARAGRAPH
4.5.6 Why is the multiplier effect on manufacturing important in the economy? (8)
4.5.7 Discuss the interactions between economic participants in a closed economy.
(8)
HIGHER ORDER PARAGRAPH
4.5.8 How can the households as an important participant in the circular-flow model
contribute to building the economy?
(8)
4.5.9 Highlight how one individual’s spending becomes another person’s income
(the multiplier effect).
(8)
ECON GRD 12 LAB
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarizing). The mark allocations for Section C is as follows:
MARK ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
• A good starting point would be to define the main concept related to the
question topic.
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
• A brief summary of what has been discussed without repeating facts already mentioned
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
[40]
QUESTION 5
•
Discuss in detail the markets within the four-sector model under the following
headings:
• Factor/Resources market (8)
• Money market (8)
• Product/Goods market (10)
(26)
•
Explain how changes in income affect the multiplier.
ECON GRD 12 LAB
(10)
[40]
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TOPIC 2:
BUSINESS CYCLES
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1. Employment figures in the business cycle will increase during a …
A
recession.
B
recovery.
C
depression.
D
trough.
1.1.2 Estimating unknown data based on a pattern of known data is called …
A
the amplitude
B
a trend
C
extrapolation
D
trough
1.1.3 The point where economic expansion is at its highest is called a …
A
contraction
B
trend
C
peak
D
trough
1.1.4
During an economic recession … will increase
A
employment
B
production
C
spending
D
unemployment
1.1.5 The point where economic contraction is at its lowest is called a …
A
trough
B
peak
C
trend
D
expansion
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1.1.6 A diagram that shows expansion and contraction periods of economic activities is
called a(n) … cycle.
A
business
B
economic
C
productivity
D
inflationary
1.1.7 The new economic paradigm that relates to the smoothing of business cycles is
rooted in … policies.
A
public relation
B
Trade
C
International
D
demand-and-supply side
1.1.8 The peak of a business cycle is characterized by a …
A
high demand for credit.
B
stable inflation rate.
C
high unemployment rate.
D
low output.
1.1.9 The typical fluctuations of a business cycle will be a/an …
A
upswing – downswing – trough – peak.
B
peak – downswing – upswing – trough.
C
peak – upswing – trough – downswing.
D
downswing – trough – upswing – peak.
1.1.10 An indication of long-term growth in the economy is referred to as a(n) …
A
trendline
B
amplitude
C
extrapolation
D
trough
ECON GRD 12 LAB
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Leading indicator
1.2.2 Depression
1.2.3 Keynesian approach
1.2.4 Kuznets
1.2.5 Supply-side policy
1.2.6 Extrapolation
1.2.7 Economic growth
1.2.8 Trough
1.2.9 Monetary policy
COLUMN B
A. A technique used to predict/estimate the unknown from
the known facts or experience.
B. Indicators that change before the economy changes
C. A school of thought which believes the economy is best
controlled by manipulating the demand for goods and
services.
D. The lowest point between the end of an economic contraction and the start of an expansionary period
E. Continuous decrease in the production output and economic activities
F. Successive periods of increasing and decreasing economic activity
G. Last 15 -25 years
1.2.10 Business cycle
H. The policy of the central bank regarding the money supply and interest rate of a country to influence economic
activity
I. An increase in the productive capacity of a country.
J. Policies aimed at increasing aggregate supply
ECON GRD 12 LAB
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 Cycles that are caused by changes in activity in the building and construction
industry.
1.3.2 A summary of the value of different leading indicators into a single value
1.3.3 An indication of the general direction of the economy
1.3.4 Business cycles that are caused by changes in construction activities, lasting for 15
to 20 years.
1.3.5 Predicting the future economic activities using facts or information that is known.
1.3.6 It measures the distance between the peak and the trough of a business cycle.
1.3.7 A negative economic growth rate for at least two consecutive quarters
1.3.8 A fluctuation in economic activities over a period of time
1.3.9 The distance from the trend line to the peak and the trough
1.3.10 A period that consists of both the recession and the depression phases.
1.3.11 A school of thought which believes that controlling the supply of money directly
influences inflation and that by fighting inflation with the supply of money.
1.3.12 The period immediately before and through the upper turning point is known as …
1.3.13 A period that consists of the recovery and prosperity phases.
1.3.14 Factors originating within the market system that lead to the occurrence of business
cycles.
1.3.15 Last 50 years and longer caused by technological innovation, wars, construction of
new roads and discoveries of new deposits.
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. This
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6.
2.7
2.8
2.9
2.10
List any TWO types of business cycles
(2 x 1)
Name any TWO turning points of a business cycle
(2 x 1)
List any TWO instruments used by the government to help stabilise the business
cycle
(2 x 1)
Name TWO phases of business cycle
(2 x 1)
List any TWO types of business cycle indicators used in forecasting economic
activities.
(2 x 1)
Name two turning points of a business cycle
(2 x 1)
List TWO periods in a business cycle
(2 x 1)
Name TWO approaches in the new economic paradigms to smooth out the
business cycle
(2 x 1)
List any two instruments of monetary policy
(2 x 1)
List TWO theories used to explain the causes of the business cycles.
(2 x 1)
ECON GRD 12 LAB
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
How can the South African government use government spending as fiscal
measure to stimulate the economy?
(1 x 2)
What negative effect does loadshedding have on the manufacturing sector?
3.9
3.10
(1 x 2)
How are leading indicators used in the forecasting of business cycles?
(1 x 2)
Why is it important to use moving averages to forecast business cycles? (1 x 2)
How can the reserve Bank use cash reserve requirement to stimulate the
economy?
(1 x 2)
Why does the endogenous school of thought encourage government intervention
in the economy?
(1 x 2)
What is the purpose of a trend line in a business cycle?
(1 x 2)
What can the government do during a period of recession to stimulate the
economy?
(1 x 2)
How accurate are leading indicators?
(1 x 2)
Why is price stability important to prevent extreme fluctuations in business cycles?
3.11
(1 x 2)
How are business cycles measured?
3.3
3.4
3.5
3.6
3.7
3.8
ECON GRD 12 LAB
(1 x 2)
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DATA RESPONSE
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
QUESTION 4.1:
4.1. Read the extract below and answer the questions that follow.
4.1.1 Name the period of business cycle during which the level of economic activities
increases
(1)
4.1.2 Mention ONE type of a business cycle.
(1)
4.1.3 Briefly describe the concept business cycle.
(2)
4.1.4 How can natural disasters influence fluctuations in business cycles?
(2)
4.1.5 How has the Keynesian (endogenous) school of thought influenced business
cycles?
(4)
QUESTION 4.2:
4.2. Study the information below and answer the questions that follow.
4.2.1 Identify the socio-economic challenge that increased when the economy went into
a slump.
(1)
4.2.2 Name the lower turning point of a business cycle
(1)
4.2.3 Briefly describe the term economic recession
(2)
4.2.4 Explain the relationship between GDP and business cycles
(2)
4.2.5 Why does inflation tend to fall during recessions?
(4)
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QUESTION 4.3:
Study the graph below and answer the questions that follow
4.3.1 List ONE example of a lagging indicator.
(1)
4.3.2 Identify the year in which GDP employment and investment were at the lowest?
(1)
4.3.3 Briefly describe the term Juglar business cycles
4.3.4 What economic activities take place during the recession phase?
4.3.5 How can the length be used in forecasting of business cycles?
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(2)
(2)
(4)
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QUESTION 4.4:
4.4. Study the diagram below and answer questions that follow.
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Identify the letter that represent the trend line in the illustration above
Which letter represents a trough in the diagram above?
Briefly describe the term real business cycle.
Explain economic activity during phase EF in the business cycle.
How can the length of business cycles be used in forecasting?
(1)
(1)
(2)
(2)
(4)
QUESTION 4.5:
4.5.
Study the extract below and answer the questions that follow.
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4.5.1 Identify ONE exogenous factor which can cause business cycles in the extract
above?
(1)
4.5.2 Name ONE fiscal policy instrument which the government can use to bolster
economic growth and employment.
(1)
4.5.3 Briefly describe the term real economic growth.
(2)
4.5.4 What is the purpose of a trend line in a business cycle?
(2)
4.5.5 How can the government improve the efficiency of markets to revive the economy?
(4)
HINT: All section B questions have TWO 8 marks questions, numbered according to
questions not like in this document.
Paragraph type questions – Middle Cognitive
QUESTION 5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
Draw a correctly labelled diagram of a business cycle, clearly indicating trend line,
length, the amplitude, and the trough.
(8)
Distinguish between the Keynesian and the Monetarist explanation of the causes of
business cycles
(8)
Briefly discuss lagging indicators as a feature underpinning forecasting
(8)
Illustrate a typical business cycle
(8)
Explain the length and amplitude with the aid of a diagram
(8)
Compare the endogenous and exogenous causes of business cycles
(8)
Use a diagram and briefly discuss the prosperity phase of a business cycle (8)
Discuss the length and amplitude as features underpinning forecasting of business
cycles.
(8)
Explain the coincidence and the lagging indicators used in forecasting of business
cycles.
(8)
Differentiate between amplitude and the trendline as features underpinning
forecasting
(8)
QUESTION
Paragraph type questions – Higher cognitive
6
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate. Content
(covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
6.1
How can South Africa’s fiscal policy contribute to a higher economic growth rate?
(8)
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6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
6.10
Why is price stability important to prevent extreme fluctuations in business cycles?
(8)
How does an increase in investment affect business cycles?
(8)
Evaluate RSA’s efforts in improving the efficiency of inputs
(8)
With reference to the Phillips curve analyze the relationship between inflation and
unemployment
(8)
Recommend measures which the South African government can use to revive the
economy post Covid-19 pandemic
(8)
How effective is SARB’s monetary policy in smoothing out business cycles? (8)
How can the monetary policy be used to slow down an overheating economy?
(8)
Analyze the importance of price stability in preventing extreme fluctuations in
business cycles.
(8)
How can the SARB prevent further recessions in the economy?
(8)
SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document. In the
examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK
ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
• A good starting point would be to define the main concept related to the
question topic.
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
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Max. 2
Max. 26
Max. 10
Conclusion
Any higher-order conclusion should include:
• A brief summary of what has been discussed without repeating facts already
mentioned
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max. 2
40
QUESTION 7
•
Discuss in detail the new economic paradigm in smoothing-out business cycles.
(26 marks)
•
Evaluate the South African government's initiatives to reduce the economic downturn caused by the Covid-19 pandemic.
(10 marks)
[40]
QUESTION 8
•
Discuss in detail the features underpinning the forecasting of business cycles
(26 marks)
•
Why is price stability important to prevent extreme fluctuations in business cycles?
(10 marks)
[40]
QUESTION 9
•
•
Discuss in detail the demand-side policies in smoothing of business cycles.
(26 marks)
How could the Monetarist’s viewpoint on government policies cause a contraction
in the business cycle?
(10
marks)
[40]
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TOPIC 3:
PUBLIC SECTOR
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section, A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct,
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1.
Various options are provided as possible answers to the following
questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1. Public goods that are non-excludable and non-rival in consumption are called …
goods.
A
B
C
D
community
collective
demerit
merit
1.1.2 The government is responsible for … sector provisioning
A
B
C
D
private
foreign
public
financial
1.1.3 This is not one of the macro-economic objectives of the government
A
B
C
D
Economic growth
Full employment
Exchange rate stability
Economic inequality
1.1.4 It shows a relationship between tax rate and tax revenue.
A
B
C
D
Phillips curve.
Laffer curve.
Lorenz curve.
Demand curve.
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1.1.5 A tax system is regressive when low-income earners pay …
A
B
C
D
the same tax as high-income earners.
less tax than high-income earners
no tax
a large proportion of their income than high-income earners
1.1.6 A problem in public sector provisioning is …
A
B
C
D
lack of accountability.
maintaining law and order.
to protect its citizens against foreign threats.
to conserve the natural resources.
1.1.7 It refers to the transfer of functions, activities, and ownership from the private
sector to the public sector.
A
B
C
D
Regulation
Nationalisation
Deregulation
Privatisation
1.1.8 Taxation and government spending are instruments of the … policy
A
B
C
D
national
fiscal
monetary
bank
1.1.9 This is not one of the effects of public sector failure
A
B
C
D
Allocation of resources
Economic instability
Redistribution of Wealth
Social instability
1.1.10 Public sector failure can occur as a result of …
A
B
C
D
supply exceeding demand.
excessive regulations.
nationalisation.
competition.
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-L) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Provincial government
COLUMN B
A. Transfer of ownership from the private sector to the
public sector.
1.2.2 Supplying public goods
B. When a state-owned business is sold to a
1.2.3 Parastatals
1.2.4 Nationalisation
private sector enterprise.
C. A compulsory payment by citizens and business to
the government without any direct benefits.
1.2.5 Deregulation
1.2.6 Corruption
D. Shows the relationship between tax rate and tax
revenue.
1.2.7 Medium-Term Expenditure Framework (MTEF)
E. The rate at which the SARB lends money to commercial banks.
1.2.8 Laffer curve
F. Removal of unnecessary laws, by laws and power
imbalances that inhibit free operations
1.2.9 Taxation
G. Document containing details of the plan for allocating state revenue and expenditure.
1.2.10 Repurchase rate
H. Concerned with issues affecting specific province in
South Africa.
I. Dishonest action taken by people in position of responsibility.
J. One of the reasons for the existence of the public
sector.
K. This shows the income and expenditure estimates
for a three-year period
L. Refers to a company which is partly or wholly owned
by the government
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1.3.
Provide the economic term/concept for each of the following descriptions.
Write only the term / concept next to the question number.
NO ABBREVIATIONS, ACRONYMS OR EXAMPLES WILL BE ACCEPTED.
1.3.1 Goods and services provided by the state for use by all members of society
1.3.2 A transfer of functions and ownership from the public sector to the private sector
1.3.3 A policy that targets taxes and government expenditure to influence economic activity
1.3.4 A business owned wholly or partly by the state and run by a public authority
1.3.5 Goods that are harmful to society, for example cigarettes
1.3.6 The main source of revenue to the state
1.3.7 Money paid by the government to a person/institution without any counter performance.
1.3.8 Goods and services provided by the state for use by all members of society
1.3.9 Dishonest action taken by people in accountable positions.
1.3.10 Demonstrate the relationship between tax rates and tax revenue.
1.3.11 When resources are allocated in such a way that no one can be made better off
without making someone else worse off
1.3.12 A graph that shows the relationship between tax rate and tax revenue
1.3.13 A set of rules and procedures that need to be followed
1.3.14 Removal of unnecessary restrictions by law.
1.3.15 when a state-owned business is sold to a private sector enterprise
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name,” you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6.
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
Give any TWO reasons for the necessity of the public sector.
(2 x 1) 2
Name any TWO composition of the public sector.
(2 x 1) 2
Mention any TWO objectives of the public sector.
(2 x 1) 2
List any TWO examples of indirect tax.
(2 x 1) 2
Give any TWO reasons for public sector failure.
(2 x 1)2
List the TWO main characteristics of fiscal policy
(2 x 1) 2
Give any TWO examples of community goods
(2 x 1) 2
List any TWO reasons that can contribute to inefficiency of the public sector.
(2 x 1) 2
Mention the TWO features of public sector failure.
(2 x 1) 2
Name any TWO effects of public sector failure.
(2 x 1) 2
Name any TWO government pricing policies when supplying public goods and
services.
(2 x 1)2
Name TWO problems of public sector provisioning
(2 x 1)2
Name any TWO examples government sources of income.
(2 x 1)2
Give any TWO reasons for public sector failure.
(2 x 1)2
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
Why is it impossible to charge consumer a price for consumption of
community goods?
(1 x 2) 2
Why should the public sector participate in the management of the economy?
(1 x 2) 2
What benefit will government enjoy from selling non-profitable state-owned
enterprises?
(1 x 2) 2
What effect will a slow economic growth have on the economy?
(1 x 2) 2
Why does the government provide merit goods?
(1 x 2) 2
What impact will an increase in the VAT rate have on the standard of living of
the poor?
(1 x 2) 2
How can South Africa’s fiscal policy contribute to a higher economic growth
rate?
(1 x 2) 2
Why is it necessary to calculate a country’s total loan debt
(1 x 2) 2
How can politicians lead to public sector failure?
(1 x 2) 2
Why is it important for the government to establish price stability?
(1 x 2)2
QUESTION 4: DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate. Content
(covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
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QUESTION 4.1:
4.1. Study the following extract and answer the questions that follow
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
Identify ONE parastatal in the extract above.
(1)
Name the main source of the SOES funding.
(1)
Briefly describe the term parastatal.
(2)
Why is the existence of SOEs important to the economy?
(2)
Briefly discuss management and accountability as a reason for public sector
failure.
(4)
QUESTION 4.2:
4.2. Study the following cartoon and answer the questions that follow.
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
Identify any one parastatal depicted in the cartoon above.
(1)
What does the abbreviation SOE stand for?
(1)
Briefly describe the term privatisation.
(2)
Why is efficiency a problem in public sector provisioning?
(2)
How can the government use the fiscal policy to stimulate economic growth in
South Africa?
(4)
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QUESTION 4.3:
4.3. Study the following cartoon and answer the questions that follow.
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Identify the parastatal that is sinking in the above cartoon.
Name any other parastatal in South Africa.
Briefly describe the term state-owned enterprise.
Explain why mismanagement leads to inefficiency.
How does public sector failure impact economic stability?
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 Discuss the reasons for the existence of a public sector
(8)
4.3.7 How can the South African municipalities improve efficiency in service delivery?
(8)
HIGHER ORDER PARAGRAPH
4.3.8 Analyse the problems faced by the South African government in providing public
goods and services.
(8)
4.3.9 Why are state owned enterprises (SOEs) seen as a problem in public sector
Provisioning?
(8)
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QUESTION 4.4:
4.4. Study the cartoon below and answer the questions that follow:
4.4.1 Identify a macroeconomic objective of the public sector in the cartoon.
(1)
4.4.2 Which level (sphere) of government is responsible for handling issues that affect
the country as a whole?
(1)
4.4.3 Briefly describe the term full employment.
(2)
4.4.4 Explain how public sector failure can lead to social instability
(2)
4.4.5 Why is South Africa (the truck) likely to fail to achieve its economic goals? (4)
MIDDLE ORDER PARAGRAPH
4.4.6 Briefly discuss distribution of income (economic equity) and price stability as
macroeconomic objectives.
(2 x 4) (8)
4.4.7 Explain accountability as problems of public sector provisioning.
(4 x 2) (8)
4.4.8 Explain privatization as problems of public sector provisioning.
(4 x 2) (8)
4.4.9 Explain inefficiency as a problem in providing public goods and services. (8)
4.4.10 How effective is the South African government in achieving full employment as a
macroeconomic objective?
(4 x 2) (8)
HIGHER ORDER PARAGRAPH
4.4.11 How effective is the South African government in achieving full employment
as a macroeconomic objective?
(8)
4.4.12 Evaluate the success of the South African Reserve Bank in maintaining price
stability in the economy.
(8)
4.4.13 Why is it important for the government to assess the performance of the economy?
(8)
4.4.14 How can the South African government going about to achieve a more
equitable income distribution?
(8)
4.4.15 To what extent has the South African government achieved the macroeconomic
objectives?
(8)
4.4.16 Evaluate price stability as a main objective of our government.
(8)
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QUESTION 4.5:
4.5. Study the information below and answer the questions that follow.
4.5.1
4.5.2
4.5.3
4.5.4
Identify one example of an indirect tax in the information above.
(1)
Name the main source of government’s tax revenue.
(1)
Briefly describe the term budget.
(2)
Why does the government impose excise duties on certain goods and services.
(2)
4.5.5 How will an increase in company tax impact negatively on economic growth?
(4)
QUESTION 4.6:
4.6. Study the information below and answer the questions that follow.
4.6.1
4.6.2
4.6.3
4.6.4
What does the abbreviation MTEF stand for?
(1)
What will be the negative impact of high tax rates.
(1)
Briefly describe the term balance of payment.
(2)
Identify the accounts of the South African balance of payment which motorcar
exports and direct investments separately appear.
(2)
4.6.5 How can the government reduce the deficit on the balance of payment? (4)
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QUESTION 4.7:
4.7. Study the extract below and answer the questions that follow.
4.7.1
4.7.2
4.7.3
4.7.4
4.7.5
Who present the budget speech in parliament?
(1)
Identify the type of budget in the extract above
(1)
Briefly describe the term budget
(2)
What is the main purpose of levying sugar tax?
(2)
Explain why an increase in vat will have a negative impact on the economy (4)
MIDDLE ORDER PARAGRAPH
4.7.6 Briefly discuss the link between the Medium-Term Expenditure Framework
(MTEF) and the national budget.
(2 X 4) (8)
HIGHER ORDER PARAGRAPH
4.7.7 How can taxation be used to stimulate employment in South Africa?
4.7.8 Evaluate the provisioning of public goods and services in South Africa.
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QUESTION 4.8:
4.8. Study the information below and answer the questions that follow:
4.8.1 Name the level of government under which the municipality of Benoni can be
classified.
(1)
4.8.2 Other than the repairing of roads, name any other function of the municipality.
(1)
4.8.3 Briefly describe the term free riding.
(2)
4.8.4 Explain a benefit of improved road connectivity.
(2)
4.8.5 What impact will a lower budget allocation have on road safety?
(4)
MIDDLE ORDER PARAGRAPH
4.8.6 With the aid of a well-labelled Laffer curve, explain the impact of tax rate
increases on state revenue
(8)
4.8.7 Briefly discuss pricing policy and parastatals as problems of public sector
provisioning.
(2 x 4) (8)
HIGHER ORDER PARAGRAPH
4.8.8 How does corruption influence good governance in South Africa?
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QUESTION 4.9
4.9. Study the table below and answer the questions that follow:
4.9.1 Identify the marginal tax rate for a person earning between R216 201 and
R337 800 per year
(1)
4.9.2 Name the income tax system represented by the table above.
(1)
4.9.3 Briefly describe the term fiscal policy
(2)
4.9.4 Explain the effect of high tax rates on taxpayers in a country.
(2)
4.9.5 Use the information in the table above to calculate the income tax payable if
one receives an annual income of R480 000
(4)
MIDDLE ORDER PARAGRAPH
4.9.6 Discuss how management failure and bureaucracy contribute to public sector
failure.
(2 x 4) (8)
4.9.7 Discuss any TWO reasons for public sector failure.
(2 x 4) (8)
4.9.8 Explain the reasons for public sector failure.
(4 x 2) (8)
HIGHER ORDER PARAGRAPH
4.9.9 How can management failure lead to the poor performance of state-owned
enterprises?
(8)
4.9.10 How do lack of motivation and corruption contribute to public sector failure?
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C are as follows:
MARK
ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
•
A good starting point would be to define the main concept related to the
question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/
Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and
explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
•
A summary of what has been discussed without repeating facts already
mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
• Discuss in detail the main objectives of the public sector in the economy. (26)
• How successful is the implementation of South Africa’s fiscal policy
(10)
QUESTION 6
• Discuss in detail the reasons for public sector failure (link them to typical problems
experienced through public sector provisioning)
(26)
• How can the unfair distribution of income in South Africa be resolved?
(10)
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TOPIC 4
FOREIGN EXCHANGE MARKETS
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section-A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct.
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1.
Various options are provided as possible answers to the following
questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1. The interaction of economies with trade as an important element is known as….
A
B
C
D
Exchange
Commerce activities
International relationships
Globalisation
1.1.2 An increase in the value of an exchange rate in a free- floating exchange rate system is known as …
A
Revaluation
B
Devaluation
C
Appreciation
D
Depreciation
1.1.3 Which ONE of the following can cause a deficit in the Balance of Payments?
A
Inward foreign investment
B
Decrease in mineral exports
C
Increase in foreign currency reserves
D
Decrease in mineral imports
1.1.4 What would cause a decrease in a country’s Balance of Trade?
A
Citizens buy imported instead of locally produced cars
B
Foreign tourists visiting the country spend less money
C
Companies invest in a foreign country
D
Teams of doctors are sent to a country that has experienced an earthquake
1.1.5 The systematic record of a country’s transaction with the rest of the world is known
as the…
A
terms of trade
B
quarterly bulletin
C
balance of payment
D
transactions record
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1.1.6 The ratio of export prices to import prices is known as …
A
exchange rates
B
balance of payment
C
terms of trade
D
change in reserves
1.1.7 Deliberate action by the SARB to lower the value of the rand is known as…
A
devaluation
B
depreciation
C
appreciation
D
revaluation
1.1.8 The subsection of the balance of payment which is used to record financial payments and receipts relating to the flow of goods and services and other income
A
B
C
D
current account
financial account
capital transfer account
payment account
1.1.9 The purchase of shares by a foreigner on the JSE is an example of …investments
A
indirect
B
portfolio
C
direct
D
foreign
1.1.10 South Africa is currently following a…exchange rate system.
A
managed floating
B
free floating
C
fixed
D
pegged
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(2 x10) (20)
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Opportunity cost
1.2.2 Free Trade
1.2.3 Absolute Advantage
1.2.4 Trading blocks
1.2.5 Pegged rate
1.2.6 Transfer Payments
1.2.7 Comparative advantage
1.2.8 Capital Transfer Account
1.2.9 International Monetary Fund
(IMF)
1.2.10 Current Account
COLUMN B
A. When a country is the most efficient producer of a
good or product
B. When a group of countries formally agree to engage
in international trade, e. g. European Union
C. Consumers and producers are free to buy goods and
services anywhere in the world without any restrictions
D. A situation where one country has a relative advantage in the production of goods or services
E. International transactions relating to production, income and expenditure are recorded in this account
F. A financing instrument distributed among member
countries of the IMF
G. Countries who have deficits on their Balance of Payments can borrow money from this institution
H. When a fixed exchange rate pegs one country’s currency to another country’s currency
I. Money received without any productive service rendered, e.g. gifts
J. A benefit or value of something that must be given up
to achieve something else
K. Sub account in the balance of payment
(1x10) 10
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 Expresses a country’s export prices in terms of its import prices.
1.3.2 The worldwide interaction of economies, with trade as a key element.
1.3.3 An international organization that lends money to countries with ongoing balance
of payment problems.
1.3.4 A situation where one country has a relative advantage in the production of goods
and services.
1.3.5 The rate at which one currency is exchanged for another.
1.3.6 A set of accounts that shows a systematic record of the trade and financial
transactions between a country and the rest of the world.
1.3.7 An account in the Balance of Payment that contains information on investments
made by South Africans in other countries.
1.3.8 The market engaged in the buying and selling of foreign currencies.
1.3.9 The value of exports minus imports.
1.3.10 An increase in the price of a currency in terms of other currencies through market
forces.
1.3.11 A decrease in the price of a currency in terms of another currency due to market
forces.
1.3.12 A deliberate decrease in the exchange rate of a currency in terms of other
currencies.
1.3.13 A deliberate increase in the exchange rate of a currency in terms of other currencies.
1.3.14 Exchange rates which can respond to market forces within certain limits.
1.3.15 Pegging the value of the currency to that of another currency.
(1x15) 15
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
List any TWO sub accounts/components of the Balance of Payments.
(2x1)
2.2
Name TWO effects of international trade.
(2x1)
2.3. Name TWO items in the financial account of the balance of payments.
(2x1)
2.4
List TWO supply reasons for international trade.
(2x1)
2.5
List TWO types of exchange rates that a country can use.
(2x1)
2.6. List TWO demand reasons for international trade.
(2x1)
2.7 Name any TWO ways/strategies that can be used to correct the BOP disequilibria.
(2x1)
2.8 Name TWO factors affecting the demand of foreign exchange
(2x1)
2.9 Name TWO factors affecting the supply of foreign exchange
(2x1)
2.10 GIVE TWO examples of merchandise that South Africa exports other than gold.
(2x1)
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
Why is gold exports listed as a separate item in the BOP?
(1x2)
What impact will the depreciation of a currency have on the Balance of Payment
account?
1x2)
3.3
What negative impact will the recent trend in the current account have on
the BOP?
(1x2)
3.4
Why is the exchange market important to tourists?
(1x2)
3.5
What happens to the value of South African rand, when the supply of US dollars
Increases?
(1x2)
3.6
Why would an increase in terms of trade have a positive effect on the welfare
of the country?
(1x2)
3.7
How can world trade improve specialisation?
(1x2)
3.8
How can the appreciation of the rand affect the exports of goods and services?
(1x2)
3.9
Why is it important for a country to have a stable exchange rate?
(1x2)
3.10 Why are unrecorded transaction included in the balance of payment?
(1x2)
QUESTION 4: DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL
THINIKING SKILLS.
Higher order questions are grounded in the content. These
types of questions test critical thinking, where candidates should be able to
apply their knowledge, through logical reasoning and also have an awareness
of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be
assessed as higher-order questions. Answers will not necessarily be found in
textbooks.
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QUESTION 4.1:
4.1 Study the information below and answer questions that follow.
Years
Quarters
Current account
items
Exported goods
Net gold exports
Service receipts
Income receipts
Current transfers
Imported goods
Service payments
Income payments
2018
Q1–4
R bn
Q1
R bn
1176
72
210
97
-35
1223
218
251
1193
56
208
123
-36
1207
221
266
Q2
R bn
2019
Q3
R bn
Q4
R bn
1233
50
213
106
-35
1314
229
230
1258
70
215
117
-36
1284
226
303
1260
93
215
121
-36
1250
230
241
[Adapted from SARB QB, December 2019]
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
Give the economic concept illustrated in the table above.
Which current account item is used for recording donations?
Briefly describe the term trade balance.
Why are net gold export figures positive in South Africa?
Calculate the balance on the current account for the second quarter of 2019.
Show ALL calculations.
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.1.6
How does the income level and the size of the population affect international
trade
(2x4) (8)
4.1.7 Compare a free -floating exchange rate system with a managed floating exchange
rate system
(2x4) (8)
HIGHER ORDER PARAGRAPH
4.1.8 Assess how an increase in import prices and an increase in export prices
(terms of trade) will affect the South African economy
(8)
4.1.9 Discuss changes in exchange rates as a method to correct the balance of
payment disequilibria.
(8)
4.1.10 Explain how the supply reasons affect international trade
(8)
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QUESTION 4.2:
4.2 Study the information below and answer questions that follow.
Month
January
February
March
SOUTH AFRICA: TERMS OF TRADE 2022
Index of import
Index of
Terms of Trade
prices
export prices
108,2
102,9
95,1
107,9
105,4
97,6
107,7
109,7
A
[Adapted from https://www.statssa.gov.za/publications/P01427/P01427March2022.pdf]
4.2.1 Identify the institution responsible for publishing the data above.
4.2.3 What is the trend in the index of import prices?
4.2.3 Briefly describe the concept terms of trade.
4.2.4 What can bring an improvement in the country’s terms of trade?
4.2.5 Calculate the terms of trade for March 2022 (A). Show ALL calculations
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.2.6 Explain natural resources and climate conditions as supply reasons for international trade
(4x2)
(8)
4.2.7 Explain labour resources as supply reasons for international trade (2X4) (8)
HIGHER ORDER PARAGRAPH
4.2.8 How can the government correct a deficit on the balance of payments account?
(8)
4.2.9 Discuss the components of the current account
(8)
4.2.10 What effect does the terms of trade have on the balance of the current account?
(8)
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QUESTION 4.3
4.3 Study the information below and answer the questions that follow.
BALANCE OF PAYMENTS DEFICIT
B
A
[Adapted from https://ecoaim.in/2020/07/12/how-disequilibrium-can-be-corrected/.
[Accessed on 21 November 2021.]
4.3.1. Which letter represents imports from the above data?
(1)
4.3.2. Which international institution can help countries with funds to correct
fundamental deficit.
(1)
4.3.3. Briefly describe the term balance of payment.
(2)
4.3.4. Explain the relationship between the exchange rate of a country and its balance
of payment.
(2)
4.3.5. Why is it important to analyze a country’s balance of payment data?
(2 x 2) (4)
MIDDLE ORDER PARAGRAPH
4.3.6. Distinguish between devaluation and appreciation of the rand against the dollar.
(2X4) (8)
4.3.7. Explain why south Africa would have a demand for foreign exchange?
(2X4)
(8)
HIGHER ORDER PARAGRAPH
4.3.8 With the aid of a graph explain how an increase in exports to the USA will
affect the value of the rand.
(8)
4.3.9 How can climate change influence international trade?
(8)
4.3.10 Evaluate the effectiveness of the methods to correct the balance of
payment disequilibria.
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction (definition),
Body (headings and full sentences in bullets) additional part and conclusion (summarising). The
mark allocations for Section C are as follows:
MARK ALLOSTRUCTURE OF ESSAY
CATION
Introduction
The introduction is a lower-order response.
Max. 2
• A good starting point would be to define the main concept related to the
question topic.
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ AnaMax. 26
lyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ DeMax. 10
duce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
Max. 2
• A summary of what has been discussed without repeating facts already
mentioned
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
40
QUESTION 5
• Discuss in detail the reasons for international trade.
(26)
• Critically discuss the challenges faced by south Africa in international trade (10)
[40]
QUESTION 6
• Discuss in detail the demand reasons for international trade
(26)
• Evaluate the effects of a currency depreciation in an economy
(10)
[40]
QUESTION 7
• Discuss in detail the supply reasons for international trade.
(26)
• Examine comparative advantage in international trade by using an appropriate
example.
(10)
[40]
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TOPIC 5:
PERFECT MARKETS
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 A perfectly competitive market is a market structure known for the following
except …
A. a large number of producers
B. free barriers to entry
C. differentiated products
D. complete information
1.1.2 In a perfect market price is determined by …
A. individual producer
B. industry
C. individual household
D. tastes of consumers
1.1.3 A close example of a perfect market in South Africa is the …
A. crude oil market
B. International diamond exchange
C. motor car industry
D. Johannesburg Security Exchange
1.1.4 The … curve of an individual firm is horizontal because the firm cannot influence
the market price.
A. demand
B. marginal cost
C. average revenue
D. supply
1.1.5 The supply curve for an individual firm under perfect conditions has a … slope.
A. Negative
B. Positive
C. Horizontal
D. Vertical
1.1.6 The average revenue of a firm in a perfectly competitive market is equal to its …
A. total revenue
B. selling price
C. marginal cost
D. economic profit
1.1.7 A fresh -produce market is a good example of a/an … market structure.
A. Monopolistic competitive
B. Monopoly
C. Perfectly competitive
D. Oligopoly
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1.1.8 The short-run supply curve of the perfectly competitor is that part of the
Marginal Cost curve which is above the … cost curve.
A. Total
B. Fixed
C. Average total
D. Average variable
1.1.9 The minimum earnings that prevent a perfectly competitor from leaving the industry in the long run is known as …
A. Economic profit
B. Normal profit
C. Economic loss
D. Fixed costs
1.1.10 A firm will shut down it cannot meet its … costs.
A. marginal
B. average variable
C. total
D. average fixed
1.2
(10 x 2) (20)
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Perfect competition
1.2.2 Break-even point
1.2.3 Industry
1.2.4 Competition Act
1.2.5 Marginal cost
1.2.6 Short run
1.2.7 Explicit cost
1.2.8 Golden rule
1.2.9 Homogenous products
1.2.10 Complete information
ECON GRD 12 LAB
COLUMN B
A. Promote efficiency of the market
B. It is equal to the average cost at the
lowest cost per unit
C. The period during which at least one
factor of production is fixed
D. Buyers and sellers do not have market
power
E. Profit is maximised at an output which
is determined according to this rule
F. Different businesses that produce the
same product
G. All inputs can be varied
H. A short run rate of output and sales at
which a supplier generates enough
revenue to cover fixed and variable
costs.
I. All buyers and sellers have access to
market conditions, prices and product
quality
J. Actual expenditure of a business e.g.
cost of raw material
K. Producers have an influence over the
market price
L. The product has close substitutes
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1
1.3.2
1.3.3
1.3.4
1.3.5
1.3.6
1.3.7
The cost that remains the same even if the output changes.
A point where a firm cannot meet its average variable cost.
When average revenue is between the shutdown and break even.
All the goods in this market must be identical.
A mechanism that brings together buyers and sellers of goods and services.
The additional revenue earned when sales increase by one more unit.
An institution whose main function is to review orders made by the competition tribunal and amends or confirm these orders.
1.3.8 The profit that the producer receives over and above the normal profit.
1.3.9 It occurs when a firm produces at the output level at which marginal revenue is
equal to marginal cost.
1.3.10 The seller who takes price that is determined by the market forces.
1.3.11 Minimum profits that will prevent the business from leaving the market.
1.3.12 The purchasing of a firm by more than one firm.
1.3.13 Costs that change according to the changes in output.
1.3.14 The sum of payments the firm receives from the sale of its output
1.3.15 The behavior such as price fixing that benefits firms at the expense of buyers
(15 x 1) (15)
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name,” you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. This
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
List any TWO examples of variable costs.
Give TWO types of price takers.
List TWO kinds of profit associated with businesses.
Name TWO actual shut-down point should take place.
Name any TWO goals of competition policy.
Give any TWO conditions of a perfect market.
Name TWO cost curves that are found in a normal profit.
List any TWO benefits of competition to consumers.
Give any TWO examples of industries that are operating under
conditions of perfect competition.
Name any TWO institutions that regulate unfair competition in
South Africa.
ECON GRD 12 LAB
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
(2 x 1)
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
Why is collusion not relevant in a perfect market?
(1 x 2)
When would it be the best option for a business to shut down its operations?
(1 x 2)
3.3
How would a perfect market disadvantage consumers?
(1 x 2)
3.4
How can economic profit increase in a perfect market?
(1 x 2)
3.5
How does the Competition Commission regulate competition in
South Africa?
(1 x 2)
3.6
What is the relationship between short run and long run costs?
(1 x 2)
3.7
How are prices determined in the industry?
(1 x 2)
3.8
What causes economic profit to be eliminated in the long run of a
perfectly competitive market?
(1 x 2)
3.9
What are the long run benefits of running a firm in perfect competition?
(1 x 2)
3.10 How will an individual producer know that his expansion was a success?
(1 x 2)
QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document.
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of
questions test critical thinking, where candidates should be able to apply
their knowledge, through logical reasoning and also have an awareness
of their current economic climate. Content (covered by discuss/examine/describe/ analyse/
explain/ evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order
questions. Answers will not necessarily be found in textbooks.
ECON GRD 12 LAB
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QUESTION 4.1:
4.1. Study the graph above and answer the questions that follow.
Diagram A
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
Diagram B
Identify the diagram that represents a single firm from the above diagram. (1)
Which curve is used to determine the supply of the firm?
(1)
Briefly describe the term marginal revenue.
(2)
Explain price determination for the firm in in diagram B.
(2)
Determine the type of profit made in diagram B when 500 units are being
produced.
Show ALL calculation
(4)
MIDDLE ORDER PARAGRAPH
4.1.6 Explain nature of the product and control over market supply and price in
a perfect market.
(8)
4.1.7 With the aid of industry and individual producer graphs, explain how the
long-run equilibrium in a perfect market will be achieved when an economic
loss was made in the short run.
(8)
HIGHER ORDER PARAGRAPH
4.1.8 Analyse the measures that may be used by the government to promote
competition in the economy.
(8)
4.1.9 Examine the consequences of an increase in the demand for a firm’s products
in a perfect competitive market.
(8)
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QUESTION 4.2:
4.2. Study the graph below and answer the questions that follow.
4.2.1 Identify the shutdown point from the graph above.
(1)
4.2.2 Mention ONE feature which shows that the above graph is of a single firm. (1)
4.2.3 Briefly describe the term marginal cost.
(2)
4.2.4 Explain the reason for a perfect market to make normal profit in the long run.
(2)
4.2.5 Why is the rising part of the mc above point E3 be considered as the
supply curve?
(4)
MIDDLE ORDER PARAGRAPH
4.2.6 Use the graph below to explain how the supply curve of a firm in a perfectly
competitive market is derived.
(8)
4.2.7 With the aid of a graph, explain the economic loss of a firm in a perfectly
competitive market.
(8)
HIGHER ORDER PARAGRAPH
4.2.8 How could the existence of perfect markets impact producers?
4.2.9 How would business prevent reaching the shut-down point?
4.2.10 Outline the challenges that the competition policy in South Africa face in
achieving their goals.
ECON GRD 12 LAB
(8)
(8)
(8)
P a g e 53 | 162
QUESTION 4.3
4.3 Study the information below and answer the questions that follow.
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Identify economic from MARKET B
Which curve indicates an increase of new entrants.
Describe the concept market.
Explain the role of the competition commission.
Why is the LAC curve u-shaped?
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 Broadly outline the objectives of the Competition Act of 1988 in South Africa.
(8)
HIGHER ORDER PARAGRAPH
4.3.7 How can consumers benefit from increased competition in the economy? (8)
QUESTION 4.4:
4.4 Study the information below and answer the questions that follow.
ECON GRD 12 LAB
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4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Identify the role of the competition commission as addressed in the extract.(1)
To whom does the competition commission make its recommendations? (1)
Briefly describe the term merger as used in economics.
(2)
Briefly explain the objective of a competition policy.
(2)
Why is competition in the market good for the economy?
(4)
MIDDLE ORDER PARAGRAPH
4.4.6 With the aid of a graph of total cost (TC) and total revenue (TR) to explain
profit maximisation in a perfect market.
(8)
HIGHER ORDER PARAGRAPH
4.4.7 Why it would be in the interest of the firm to continue production even if it
makes a loss?
(8)
QUESTION 4.5:
4.5 Study the graph below and answer the questions that follow:
ECON GRD 12 LAB
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4.5.2.
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
Which market structure is represented by the graph above?
(1)
Provide the correct label, in full, for 4.5.2 in the above- mentioned graph. (1)
Briefly describe the term industry.
(2)
Explain the implication of a price taker.
(2)
Use the graph above to derive a demand curve of an individual producer. (4)
MIDDLE ORDER PARAGRAPH
4.5.6 With the aid of a well labelled graph (cost and revenue curves), explain
the shut-down point for the individual firm in a perfect market.
(8)
HIGHER ORDER PARAGRAGH
4.5.7 Justify why a perfect market is unrealistic.
(8)
SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALSTRUCTURE OF ESSAY
LOCATION
ECON GRD 12 LAB
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Introduction
The introduction is a lower-order response.
•
A good starting point would be to define the main concept related to
the question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in
the body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a
graph and explain/Use the graph given and explain/Complete the given
graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
• A brief summary of what has been discussed without repeating facts
already mentioned
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
With the aid of three separate graphs, explain the following short-term equilibrium positions in a perfect market.
(26)
• economic profit
• economic loss
• normal profit
How successful is the competition policy in promoting a more competitive
economy?
(10)
[40]
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TOPIC 6:
IMPERFECT MARKETS
SECTION A: TYPICAL EXAM QUESTIONS
The dynamics of imperfect markets with the aid of cost and revenue curves
1.1
Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question number.
1.1.1 Profit maximisation point is where ...
A. MC = AR
B. MC = MR
C. AC = MR
D. AC = AR
1.1.2 As a rule, the firm should shut down when …
A. MC = AVC
B. MC = ATC
C. MR = MC
D. AR = AC
1.1.3 The AR curve is always above the MR curve in the imperfect market
because …
A. AR is more inelastic than MR.
B. MR is more elastic than AR.
C. AR is more elastic than MR.
D. MR is more inelastic than AR.
1.1.4 The … curves resemble the demand curve.
A. MC and AC
B. AR and AC
C. MC and MR
D. MR and AR
1.1.5 Costs that change as production changes are called …
A. Fixed costs.
B. Variable costs.
C. Average costs.
D. Total costs.
1.1.6 A stage in the production process where the long-run average cost curve (LRAC),
neither increase or decreases is known as …
A. economies of scale.
B. diseconomies of scale.
C. no returns to scale.
D. constant economies of scale.
1.1.7 The total cost curves always starts at …
A. 0
B. The same place total fixed cost starts.
C. The same place total variable cost starts.
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D. The same place total revenue starts.
1.1.8 Profit maximisation is where the vertical distance between … and
TC is the biggest.
A. TFC
B. TVC
C. MC
D. TR
1.1.9 Additional cost paid by the firm for every additional unit produced.
A. Marginal profit
B. Marginal revenue
C. Average cost
D. Marginal cost
1.2 Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-F) next to the question number (1.2.1 – 1.2.5) in the ANSWER BOOK.
COLUMN A
1.2.1 Break-even point
A.
1.2.2 Explicit costs
B.
1.2.3 Shut down point
1.2.4 Normal profit
C.
D.
1.2.5 Short run
E.
F.
COLUMN B
Actual expenditure of a business, for
example wages and Interest
Duration where at least one factor of
production is fixed
Total revenue is equal to total cost
A business in a perfect market will consider
closing down if AR = AVC
An example of tacit collusion in an oligopoly
market regarding pricing
Occurs where average revenue is equal to
average cost
1.3 Provide the economic term/concept for each of the following descriptions. Write
only the term/concept next to the question number. No abbreviations, acronyms
or examples will be accepted.
1.3.1
1.3.2
1.3.3
1.3.4
1.3.5
Cost that cannot be recovered should the firm leave the market.
The quantity where MR is equal to MC.
The sum of fixed costs and variable costs.
The cost that changes according to the level of production
Profit more than normal profit
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Question 2
2.1 Study the table below and answer the questions that follow.
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
Give formula for calculating total revenue
(1)
At which level of output is the firm maximizing revenue?
(1)
Briefly describe the term marginal revenue.
(2)
Explain how monopolists determine the production level
(2)
Use the information above and calculate average revenue for unit 3.
(2X2) (4)
2.2 Study the table below and answer the questions that follow:
PRICE
10
10
10
10
10
10
10
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
QUANTITY
0
1
2
3
4
5
6
TR
0
10
13
25
30
35
45
TC
10
20
18
22
25
35
30
PROFIT
0
- 10
-5
3
5
0
15
What is the formular for calculating TC?
What is represented by the -5 in the profit column above?
What could be the reason for the 0 at quantity 5?
Why is there a value for TC when production (quantity) is zero?
Present TR and TC on the same set of axes on a graph.
(1)
(1)
(2)
(2)
(4)
QUESTION 3
MIDDLE ORDER PARAGRAPH
3.1
Distinguish between Fixed costs and Variable costs.
(8)
3.2
With the aid of a graph, explain the relationship between marginal revenue
and the demand curve (AR) of a monopoly.
(8)
HIGHER ORDER PARAGRAPH
3.3
Why does the marginal revenue (MR) curve lie below the demand curve in a
monopoly market?
(8)
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MONOPOLIES
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear
correct. The answer will NEVER be two options. Only ONE option is correct. Your
answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions. Choose
the answer and write only the letter (A–D) next to the question number.
1.1.1 Although a monopoly can charge any price it wishes, it chooses …
A. the highest price.
B. the price equal to marginal cost.
C. the price that maximizes profit.
D. competitive prices.
1.1.2 Which of the following is not a barrier to entry for new firms seeking entry into an
industry in which there is currently a monopoly?
A. Supernormal profits
B. Economies of scale
C. Branding
D. An industry regulatory body
1.1.3 A natural monopoly is most likely to exist when there…
A. are extremely large economies of scale.
B. are large barriers to entry.
C. is government regulation of the industry.
D. are long term patents in an industry.
1.1.4 Which ONE of the following will be the result of the large economies of scale
enjoyed by those involved in the production of gas and electricity?
A. Upward sloping long run average cost curve.
B. Flat long run average cost curve.
C. Downward sloping long run average cost curve.
D. “U” shaped long run average cost curve.
1.1.5 Barriers to entry are not economic in nature but are caused by other barriers.
A. Artificial monopoly
B. Legal monopoly
C. Natural monopoly
D. Cartel
1.1.6 The demand curve of a monopoly is the same as …revenue curve.
A. Marginal
B. Average
C. Total
D. Average variable
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1.1.7 A pure monopoly is unlikely to achieve
equilibrium …
A. price is not equal to marginal cost.
B. profit is not equal to normal profit.
C. cost is rising due to diseconomies of scale.
D. output is not at the lowest point of the AC curve.
allocative
efficiency
because
1.1.8 Monopoly is faced with a ….
A. horizontal DD curve.
B. downward sloping DD curve.
C. kinked demand curve.
D. vertical DD curve.
1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A – G) next to the question number (1.2.1 – 1.2.6) in the
ANSWER BOOK, for example 1.2.7.H
COLUMN A
COLUMN B
1.2.1 Nature of product
A. Legal right of a holder to exclusively manu1.2.2 Artificial monopoly
facture a product
B. More than one business in the market con-
1.2.3 Competition
1.2.4 Monopoly curve
1.2.5 Sunk costs.
trols the supply of goods and services
C. No close substitutes
D. Electricity in South Africa is provided by the
government enterprise
1.2.6 Dead weight loss
E. Faces a downward sloping demand curve
F. Reduction in economic welfare caused by a
reduction in both consumer and producer surplus
G. Cannot be recovered should the firm leave
the market
1.3 Provide the economic term/concept for each of the following descriptions. Write
only the term/concept next to the question number. NO ABBREVIATIONS, ACRONYMS OR EXAMPLES WILL BE ACCEPTED.
1.3.1 A form of legal protection to prevent copying, for commercial purposes, original
works of authorship, including books and music.
1.3.2 Economic conditions in the industry, for example, economies of scale or control
of a critical resource, that limit effective competition.
1.3.3 A government rule that gives the inventor the exclusive legal right to make, use,
or sell the invention for a limited time.
1.3.4 When an existing firm uses sharp but temporary price cuts to discourage new
competition.
1.3.5 Removing government controls over setting prices and quantities in certain industries.
1.3.6 Market forces that prevent potential competitors from entering a market.
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QUESTION 2
HINT: All section B questions have TWO data interpretation questions – each total 10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
2.1 Study the graph below and answer the questions that follow:
2.1.1 Identify the letter in the graph above that represents the loss minimising point.
2.1.2
2.1.3
2.1.4
2.1.5
(1)
What is the selling price of the business above?
Briefly describe the term monopoly.
Why is the equilibrium position above typical of the short run?
Determine the loss for this business. Show ALL calculations
ECON GRD 12 LAB
(1)
(2)
(2)
(4)
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2.2 Study the cartoon below and answer the questions that follow.
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
Identify the type of monopoly depicted in the cartoon.
(1)
How many firms usually dominate this type of market?
(1)
Describe the nature of the product produced by a monopoly.
(2)
How are natural monopolies created?
(2)
Why will this monopolist always make economic profit in the long run?
(2 x 2) (4)
Question 3
MIDDLE ORDER PARAGRAPH
3.1
Distinguish between natural and artificial monopolies
(8)
3.2
Discuss downward slopping demand curve and the control on price as characteristics of a monopoly in detail
(8)
3.3
3.4
HIGHER ORDER PARAGRAPH
Evaluate the effects of monopolies on the economy.
How does inefficiency occur in a monopoly?
(8)
(8)
OLIGOPOLIES
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
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1.1.1 Kinked demand curve theory was devised by ….
A. Philips
B. Arthur Laffer
C. Paul Sweezy
D. Adam Smith
1.1.2 The market structure in which strategic considerations are most important.
A. Monopolistic competition
B. Oligopoly
C. Monopoly
D. Pure competition
1.1.3 Which of the following is most likely to be oligopolistic.
A. The market for corn
B. The market for colas
C. The market for aluminium
D. The market for ground coffee
1.1.3 The market structure in which there is interdependence among firms is.
A. Oligopoly
B. Monopolistic competition
C. Monopoly
D. Perfect competition
1.1.5 The oligopoly model
inflexible is the…model.
A. Cournot
B. Stackelberg
C. Dominant firm
D. Kinked demand
that
predicts
that
oligopoly
will
tend
to
very
1.1.6 Suppose that three oligopolistic firms are currently charging R12 for their product.
The three firms are about the same size. Firm A decides to raise its price to R18 and
announces to the press that it is doing so because higher prices are needed to restore
economic vitality to the industry. Firms B and C go along with Firm A and raise their
prices as well. This is an example of …
A. Price leadership
B. Collusion
C. The dominant firm model
D. The Stackelberg model
1.1.7 In the dominant firm model, the smaller fringe firms behave like
A. an increase in output level and a decrease in price
B. a decrease in output level and an increase in price
C. a decrease in output level and no change in price
D. neither a change in output level nor a change in price
1.1.8 Which of the following is true about demand curve facing the dominant firm?
A. It is identical to market demand.
B. It equals market demand minus fringe firms supply curve.
C. It equals market demand minus demand facing the fringe firms.
D. It is horizontal.
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1.2 Choose a description from COLUMN B that matches the item in COLUMN A. Write
only the letter (A – E) next to the question number (1.2.1 – 1.2.5) in the ANSWER
BOOK, for example 1.2.9 G.
COLUMN A
1.2.1 Price leadership
1.2.2 Pure Oligopoly
COLUMN B
A. Collusion that is open and oligopolies meet formally to decide on prices and production.
B. A change in price causes a smaller percentage
1.2.3 Inelastic demand
1.2.4 Explicit collusion
1.2.5 Non price competition
change in the quantity demanded.
C. Two firms dominate the market.
D. This market sells homogeneous products and
dependence between sellers exists.
E. Doing business over the internet
F. One firm fixes the price and other accept as a
market price.
1.3 Provide the economic term/concept for each of the following descriptions. Write only
the term/concept next to the question number. NO ABBREVIATIONS, ACRONYMS
OR EXAMPLES WILL BE ACCEPTED.
1.3.1 A market where there are only two oligopolies in the market.
1.3.2 The market structure in which strategic considerations are imperative.
1.3.3 The behaviour by firms is motivated by an arrangement that is not formal.
1.3.4 The demand curve is not a straight line but has a different elasticity for higher
and lower prices.
QUESTION 2
HINT: All section B questions have TWO data interpretation questions – each total 10 marks. Section B consist of Questions 2-4 not as numbered in this document.
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
2.1 Study pictures below and answer the questions that follow.
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2.1.1 Identify the non-price competition strategy above
(1)
2.1.2 Which market structure practices non-price competition?
(1)
2.1.3 What will be the impact of the above strategy on the revenue of the business?
(2)
2.1.4 Why are oligopolists reluctant to compete on price to get a greater market share.
(2)
2.1.5 How do restaurants use non-price competition to make their products or service
more price inelastic?
(2X2) (4)
2.2 Study the extract below and answer the questions that follow:
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
Identify the institution that is responsible for investigating anti-competitive
behaviour.
(1)
Name the type of collusion explained in the extract above.
(1)
Briefly describe the term oligopoly.
(2)
What is the impact of price fixing on the market?
(2)
How does the existence of monopolies influence the supply of goods and
services?
(2x2) (4)
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QUESTION 3
MIDDLE ORDER PARAGRAPH
3.1
With the aid of a correctly labelled graph, briefly explain why it is advisable for
oligopolies to sell at market price.
(8)
3.2
Distinguish between price leadership and a cartel.
(8)
HIGHER ORDER PARAGRAPH
How do oligopolists minimize the level of competition and uncertainty regarding
prices?
(8)
3.4
How can the government discourage firms from engaging in anti-competitive behaviour?
(8)
3.3
MONOPOLISTIC COMPETITION
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section, A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct,
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
ECON GRD 12 LAB
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1.1.1 A market with few entry barriers and with many firms that sell differentiated products
is.
A.
Purely competitive
B.
A monopoly
C.
Monopolistic competition
D.
oligopolistic
1.1.2 The most important factor in determining the long-run profit potential in monopolistic
competition is.
A.
Free entry and exit.
B.
The elasticity of the market demand curve
C.
The elastic of the firm’s demand curve
D.
The reaction of rival firms to a change in price
1.1.3 Which of the following is NOT regarded as source of inefficiency in monopolistic
competition?
A.
The fact that price exceeds marginal cost.
B.
Excess capacity
C.
Product diversity
D.
The fact that long-run average cost is not minimized.
1.1.4
A.
B.
C.
D.
Monopolistic competition firms have monopoly power because they
Face downward sloping demand curves
Are great in number.
Have freedom of entry
Are free to advertise.
1.1.5
A.
B.
C.
D.
A monopolistic competition firm in long-run will make will …
negative profit.
zero profit.
positive profit.
both positive and negative.
1.1.6
A.
B.
C.
D.
Which of the following is true for both perfect and monopolistic competition?
Firms produce a differentiated product.
Firms face a downward sloping demand curve.
Firms produce a homogeneous product.
There is freedom of entry and exit in the long run.
1.1.7 Which of the following is true in long-run equilibrium for a firm monopolistic competition.
A.
MC=ATC
B.
MC>ATC
C.
MC<ATC
D.
MC=ATC
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1.1.8
A.
B.
C.
D.
A characteristic of monopolistic competitors is that they …
produce a homogeneous product.
obtain economic profits in the long run.
have full control over the price.
can easily enter and exit the market.
1.2 Choose a description from COLUMN B that matches the item in COLUMN A. Write
only the letter (A – F) next to the question number (1.2.1 – 1.2.5) in the ANSWER
BOOK, for example 1.2.9 F.
COLUMN A
COLUMN B
1.2.1 Branding
A. Occurs when MC = MR
1.2.2 Non-price competition
B. Is used to differentiate the firm’s product.
1.2.3 Monopolistic competition
C. Occurs when sellers focus on their prod-
1.2.4 Profit maximisation
1.2.5 Hybrid structure
uct’s features than on price.
D. Many buyers are selling to many sellers.
E. Type of competition that occurs often in
the retail sector of the economy.
F. Firms make positive economic profit.
1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. NO ABBREVIATIONS,
ACROYMS OR EXAMPLES WILL BE ACCEPTED
1.3.1
1.3.2
1.3.3
1.3.4
The purpose is to increase sales and profit.
A market structure in which many sellers each produce similar, but slightly
differentiated products.
A marketing tool that the firm can use to create a certain perception in the
minds of its customers.
Agreements among sellers to raise or fix prices.
QUESTION 2
HINT: All section B questions have TWO data interpretation questions – each total 10 marks. Section B consist of Questions 2-4 not as numbered in this document.
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
Study the extract below and answer the questions that follow:
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2.1.1 Name other examples of a monopolistic competition
(1)
2.1.2 What characteristics does monopolistic competition have in common with
a monopoly?
(1)
2.1.3 Briefly describe the term “small cartel”.
(2)
2.1.4 Why should the government regulate monopolistic competition?
(2)
2.1.5 Explain why you would consider operating in a monopolistic competitive industry.
(2x2) (4)
2.2 Study the picture below and answer the question that follow:
2.2.1 Identify ONE example of a monopolistic competitor from the picture above. (1)
2.2.2 What is the number of firms expected in the market shown on the picture above?
(1)
2.2.3 Briefly describe the term hybrid structure.
(2)
2.2.4 Explain why product differentiation is an important aspect of competition
between businesses.
(2)
2.2.5 How does free entry affect the demand curve of the monopolistic competition?
(2 x 2) (4)
QUESTION 3
MIDDLE ORDER PARAGRAPH
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3.1
3.2
With the aid of the graph explain monopolistic competition in the long run
(8)
Why do firms in monopolistic competition make economic profit in the
short run only?
(8)
HIGHER ORDER PARAGRAPH
3.3 How would competitors in monopolistic competition ensure their operational
success in the market?
(8)
SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALSTRUCTURE OF ESSAY
LOCATION
Introduction
The introduction is a lower-order response.
Max. 2
• A good starting point would be to define the main concept related to
the question topic.
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to discuss in
the body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically disMax. 26
cuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a
graph and explain/Use the graph given and explain/Complete the given
graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Max. 10
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
Max. 2
•
A brief summary of what has been discussed without repeating facts
already mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
40
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QUESTION 4
• Examine the monopoly as a market structure without the use of the graph.
(26)
•
Why has Eskom, as a monopoly, not achieved economic profit in the
long run, as expected of a typical monopoly.
(10)
[40]
QUESTION 5
• With the aid of graphs, discuss monopoly in detail.
(26 marks)
• Why does the performance of natural monopolies contradict (deny) the long run
equilibrium position of a monopoly?
(10 marks)
[40]
QUESTION 6
• Examine oligopoly in detail.
(26 marks)
• Why do the oligopolist not compete on price to increase his/her market share.
(10 marks)
[40]
QUESTION 7
• Compare and contrast perfect competition and monopolistic competition in detail
in terms of the following headings:
•
Number of businesses
Nature of product
Control over prices
Demand curves
Entry
Information
Examples
Economic profit/loss
Decision-making
Collusion
Productive/Technical efficiency
Allocative efficiency
(26 marks)
In contrast to the perfect competition, why do monopolistic competitors need to advertise their products?
(10 marks)
[40]
QUESTION 8
• Compare and contrast a perfect market and an oligopoly in detail under the
following headings:
-
Number of businesses
Entry into and exit from the market
Control over prices
The nature of the product
Demand curve
Economic profit/loss
Availability of information
Examples
ECON GRD 12 LAB
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-
Collusion
Productive/Technical efficiency
Allocative efficiency
(26 marks)
• How successful is the competition policy in promoting a more competitive
economy?
(10 marks)
[40]
QUESTION 9
• Compare and contrast in detail the market structure of a monopoly with that of a
perfect competitor under the following headings:
- Control over prices
- Demand curve
- Economic profit/losses
- Number of businesses
- Nature of the product
- Information
- Entry
- Examples
- Decision making
- Collusion
- Technical efficiency
- Allocative efficiency
(26 marks)
• Draw a clearly labelled graph to explain why a perfect competitor will stop producing goods at a certain point.
(10 marks)
[40]
QUESTION 10
• Compare and contrast in detail the market structure of a monopoly with that of a
monopolistic competitor under the following headings:
- Control over prices
- Demand curve
- Economic profit/losses
- Number of businesses
- Nature of the product
- Information
- Entry
- Examples
- Decision making
- Collusion
- Technical efficiency
- Allocative efficiency
(26 marks)
•
What positive impact will an increase in suppliers of electricity have on South
Africa?
(10 marks)
[40]
QUESTION 11
• Compare and contrast in detail the market structure of a monopoly with that of an
oligopoly under the following headings:
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•
Control over prices
Demand curve
Economic profit/losses
Number of businesses
Nature of the product
Information
Entry
Examples
Decision making
Collusion
Technical efficiency
Allocative efficiency
(26 marks)
How successful is the competition policy in promoting a more competitive economy?
(10 marks)
[40]
QUESTION 12
•
•
Compare and contrast oligopoly with monopolistic competitor in detail under the
following headings:
Control over prices
Demand curve
Economic profit/losses
Number of businesses
Nature of the product
Information
Entry
Examples
Decision making
Collusion
Technical efficiency
Allocative efficiency
(26 marks)
How will a monopolistic competitor, like KFC, compete with other fast food chicken
outlets to increase its market share?
(10 marks)
[40]
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TOPIC 7: IMPERFECT MARKETS
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 Goods highly in demand in the general welfare of the people, but not highly rated
by the market is called … goods
A
demerit
B
merit
C
non-durable
D
semi-durable
1.1.2 When businesses fail to deliver goods and services at the lowest possible
cost is known as … inefficiency.
A
productive
B
allocative
C
demand
D
summative
1.1.3 A situation where the best available production outcome has not been achieved is
known as market …
A
power .
B
failure.
C
equilibrium.
D
waste.
1.1.4 The rationale behind cost benefit analysis is …
A
efficient resource allocation
B
high prices
C
redistribution of wealth
D
determining wealth
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1.1.5 When two identical products are sold at different prices to different consumers it is
known as price …
A
differentiation
B
stability
C
discrimination
D
comparison
1.1.6 Goods with an external benefit would be … provided in the market.
A
under
B
freely
C
over
D
equally
1.1.7 Goods which are non-excludable and non-rival are known as … goods.
A
consumer
B
capital
C
community
D
scarce
1.1.8 When a business does NOT produce at the lowest possible cost, it relates |
to … inefficiency.
A
allocative
B
consumer
C
goods
D
productive
1.1.9 The use of a cost-benefit analysis allows … decision-making.
A
subjective
B
complex
C
biased
D
objective
1.1.10 An example of a positive externality is…
A
education.
B
pollution.
C
alcohol abuse.
D
smoking.
1.1.11 With cost-benefit analysis a project will be accepted when…
A
social costs exceed social benefits.
B
private benefit exceeds private cost.
C
private costs exceed private benefit.
D
social benefits exceed social costs.
1.1.12 To limit costs without limiting production refers to…
A
productive inefficiency.
B
productive efficiency
C
opportunity cost.
D
surplus production.
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1.1.13 Prices set by government to ensure affordability to the poor is called … prices.
A
maximum
B
normal
C
minimum
D
limited
1.1.14 Social benefits exceeding private benefits are characteristics of … goods.
A
public
B
demerit
C
primary
D
tertiary
1.1.15 When a production unit does not produce goods at the lowest possible cost,
it is called …
A
technical efficiency.
B
allocative inefficiency.
C
productive inefficiency.
D
selective efficiency.
1.1.16 Goods such as parks, beach facilities and streets are known as … goods.
A
private
B
collective
C
consumer
D
producer
A
B
C
D
Public goods are provided and funded by …
markets.
factories.
governments.
companies.
A
B
C
D
A social benefit is the sum of private benefit and …
external benefit.
internal benefit.
private cost.
marginal cost
1.1.17
1.1.18
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Maximum price
COLUMN B
1.2.2 Allocative inefficiency
A. The best available production outcome has
not been achieved.
1.2.3 Welfare loss
B. Good with a negative externality
1.2.4 Demerit goods
C. A situation where no allocation is available
that make one individual better off without
making another worse off.
1.2.5 Negative externality
1.2.6 Subsidy
1.2.7 Productive inefficiency
1.2.8 Pareto efficiency
1.2.9 Minimum price
1.2.10 Positive externality
D. When goods are not produced in the right
proportions to reflect consumer preferences.
E. Third party effects of production that have a
good effect on people that were not involved
in these activities.
F. A price set by the government which is
above market price.
G. The change in social welfare as a result of
an externality.
H. A cost to a third party which is not included
in the market price of a good.
I. A price that is set below the equilibrium
price to make good affordable.
J. Allowance given to producers to lower cost
of production.
K. A situation where there is demand for a
product but no supply
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 The best available production outcome has not been achieved.
1.3.2 Prices set by government above equilibrium to benefit the producer
1.3.3 Consumption by one person does not reduce the consumption by another
individual
1.3.4 People enjoy watching TV without paying for it
1.3.5 Goods with negative externalities e.g. alcohol
1.3.6 Shows different combinations of the production of two goods, given available
resources and technology
1.3.7 Benefits exceed payment by individuals and the community e.g. clean water
and health care
1.3.8 The process of comparing social costs and social benefits of a project.
1.3.9 The lowest amount that can be given to a worker e.g. domestic workers.
1.3.10 Good that society feels are beneficial to consume but are undersupplied by
the market
(10 x 1)
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. This
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
Give TWO causes of market failure
(2 x 1) (2)
List (Name) 2 types of inefficiencies
(2 x 1) (2)
Name TWO types of externalities
(2 x 1) (2)
Give any TWO examples of positive externalities
(2 x 1) (2)
List any TWO examples of negative externalities, caused by
industrial development
(2 x 1)(2)
2.1.6 List TWO consequence of market failures
(2 x 1)(2)
2.1.7 Give any TWO examples of community goods.
(2 x 1)(2)
2.1.8 Give TWO examples of merit goods
(2 x 1)(2)
2.1.9 Give TWO reasons for a cost-benefit analysis
(2 x 1)(2)
2.1.10 List any TWO types of subsidies on goods.
(2 x 1)(2)
2.1.11 Give TWO characteristics of public goods
(2 x 1)(2)
2.1.12 List any TWO examples of merit goods
(2 x 1)(2)
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1. Why is the demand for skilled labour difficult to adjust in South Africa?
(2)
3.1.2 Why does the government sometimes set minimum prices (price floors) for
certain products?
(2)
3.1.3 Why will debtors benefit from price increases?
(2)
3.1.4 Why are merit goods normally undersupplied by the market?
(2)
3.1.5 How will a national minimum wage influence the supply of labour?
(2)
3.1.6 How will the producer react if the government implements a maximum price
on his product?(2)
3.1.7 How will producers benefit from minimum prices that are implemented
by the government?
(2)
3.1.8 Why are allocative and technical efficiency important for the economy?
(2)
3.1.9 How is CBA related to market failure?
(2)
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QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate. Content
(covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 4.1:
4.1. Study the graph and answer the questions that follow
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
Give an example of a negative externality.
(1)
Name the shaded area (A) in the graph above
(1)
Briefly describe the term social cost.
(2)
Explain a lack of information to entrepreneurs as a cause of market failure. (2)
Why is the socially optimal output more beneficial to society?
(2 x 2) (4)
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MIDDLE ORDER PARAGRAPH
4.1.6 Explain externalities as a cause of market failures without using a graph
4.1.7 Discus (Explain) imperfect competition as reason for market failure
(8)
(8)
HIGHER ORDER PARAGRAPH
4.1.8 Analyse productive inefficiency without the aid of a graph .
4.1.9 Why does the government produce certain goods and services?
(8)
(8)
QUESTION 4.2:
4.2
Read the extract below and answer the questions that follow
4.2.1What is the official unemployment rate in South Africa?
(1)
4.2.2 Identify a reason for market failure mentioned in the extract above.
(1)
4.2.3 Briefly describe the term minimum wage.
(2)
4.2.4 How can the market failure mentioned in the extract above be resolved?(2)
4.2.5 Explain why more labourers are being excluded from the labour market.
(2 × 2) (4)
MIDDLE ORDER PARAGRAPH
4.2.6 Explain by means of a neatly drawn graph the impact of minimum wages
4.2.7 Explain public goods as reasons for market failure.
(8
(8)
HIGHER ORDER PARAGRAPH
4.2.8 What are the effects of the implementation of minimum wages in South Africa?
(8)
4.2.9 Analyse productive inefficiency with the aid of a production possibility curve.
(8)
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QUESTION 4.3:
4.3 Study the graph below and answer the questions that follow.
4.3.1
4.3.2
Identify the minimum price in the graph above.
(1)
Provide an example of a minimum price recently implemented in the
South African labour market.
(1)
4.3.3 Briefly describe the term price floors.
(2)
4.3.4 Why are governments most likely to intervene in the market by setting minimum
prices in the agricultural sector?
(2)
4.3.5 Evaluate the effect of minimum prices on the economy.
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 Explain, with the aid of a neatly labelled graph, the impact of maximum prices on
the market.
(8)
4.3.7 Discuss the uses of cost-benefit-analysis.
(8)
HIGHER ORDER PARAGRAPH
4.3.8 Analyse why freely operating markets would fail to produce enough products
(8)
4.3.9 How does the government discourage and encourage externalities?
(8)
4.3.10 Examine taxes and subsidies as ways of government intervention to counter
market failures.
(8)
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QUESTION 4.4:
4.4. Study the graph below and answer the questions that follow
4.4.1What is the equilibrium price in the graph above?
4.4.2 Identify the quantity of goods above which will be supplied if a maximum
price of R70 is implemented.
4.4.3 Briefly describe the term market failure.
4.4.4 Why will a government implement maximum prices of certain goods?
4.4.5 Use the graph to explain the impact of maximum prices on the market.
(2 x 2) (4)
(1)
(1)
(2)
(2)
MIDDLE ORDER PARAGRAPH
4.4.6 Explain how the immobility of factors of production can cause market failure.
(8)
4.4.7 Explain by means of a neatly drawn graph the impact of minimum wages
(8)
HIGHER ORDER PARAGRAPH
4.4.8 How has the implementation of minimum wages advantaged the worker in
South Africa?
(8)
4.4.9 Analyse productive inefficiency with the aid of a production possibility curve.
(8)
4.4.10 How can Cost Benefit Analysis reduce market failure?
(8)
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QUESTION 4.5:
4.5 Study the illustrations below and answer the questions that follow.
4.5.1 What type of inefficiency is evident in the illustrations above?
4.5.2 What market situation is created when supply is less than demand?
4.5.3 Briefly describe the concept productive inefficiency.
4.5.4 Explain the effect on price following this situation in the illustration.
4.5.5 How can subsidies be used to remedy the situation?
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.5.6 Briefly discuss merit and demerit goods as a cause of market failure.(2 x 4) (8)
4.5.7 Explain with the aid of a well-labelled graph, the effect of providing subsides to
producers as a form of government intervention during market failure. (2 x 4) (8)
HIGHER ORDER PARAGRAPH
4.5.8 Why is a Cost Benefit Analysis (CBA) necessary for public sector projects?
4.5.9 How can Cost Benefit Analysis reduce market failure?
4.5.10 How can inefficiencies cause market failures?
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(8)
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QUESTION 4.6
4.6
Study the data below and answer the questions that follow.
4.6.1 Identify ONE private cost from the data above.
(1)
4.6.2 Which institution normally conducts cost-benefit analysis?
(1)
4.6.3 Briefly describe the concept cost-benefit analysis.
(2)
4.6.4 What alternative measure could the government consider instead of building
a new road?
(2)
4.6.5 You are the adviser to the Minister of Transport. How would you advise
the minister on the project?
(4)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALSTRUCTURE OF ESSAY
LOCATION
Introduction
The introduction is a lower-order response.
Max. 2
•
A good starting point would be to define the main concept related to
the question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in
the body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically disMax. 26
cuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a
graph and explain/Use the graph given and explain/Complete the given
graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Max. 10
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
Max. 2
•
A brief summary of what has been discussed without repeating facts
already mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
40
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QUESTION 5
• Discuss how the following factors can lead to the misallocation of resources in the market.
1.
Missing markets
2.
Imperfect competition
3.
Lack of information
(26 Marks)
•
With the aid of a graph explain the effect of a negative externality on
production levels.
(10 Marks)
[40]
QUESTION 6
• Discuss, in detail, without drawing graphs, state intervention as a consequence of market failures.
(26 marks)
•
How can market inefficiency be reduced by global markets (globalisation)?
(10 marks)
[40]
QUESTION 7
•
Discuss how the following factors can lead to the misallocation of resources in the market.
1.
Immobility of factors of production 2.
Imperfect distribution of income and wealth
3.
Externalities
(26 Marks)
•
Evaluate the effectiveness of implementing a national minimum wage
in the labour market.
(10 Marks)
[40]
QUESTION 8
•
Discuss in detail state intervention as a consequence of market failures,
with the aid of relevant graphs
1. Maximum prices
2. Taxation
3. Redistribution of wealth
•
(26 marks)
Explain the supply of undesirable goods in South Africa and how the government
can deal with it.
(10 marks)
[40]
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TOPIC 8:
PROTECTIONISM AND FREE TRADE
SECTION A: TYPICAL EXAM QUESTIONS
Section A – Short Questions
QUESTION 1:
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if you
do not read the question carefully the nearly correct answer will also appear correct.
The answer will NEVER be two options. Only ONE option is correct. Your answer will
immediately be marked incorrect if you write TWO options.
1.1
Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 A trade protocol that is meant to improve trade relationships between the United
States of America and Africa is called the …
A
B
C
D
European Union.
Southern African Customs Union.
African Growth and Opportunity Act.
Multilateral Monetary Area.
1.1.2 A form of economic integration that allows free movement of labour, capital and
money between member countries is known as a/an …
A
B
C
D
free trade area
economic union
customs union
common market
1.1.3 When there are no restrictions to trade such as taxes on goods or bans on imports, it is called …
A
B
C
D
dumping
protectionism
free trade
diversification
1.1.4 Interfacing and interaction of economies, with trade as a key element, is
known as …
A
B
C
D
free trade.
communication.
industrialisation.
Globalisation.
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1.1.5 n An argument in favour of the protection of local industries is...
A
B
C
D
unstable wage levels.
economies of scale
the prevention of dumping
fewer job opportunities.
1.1.6 An advantage of import substitution is … in the domestic economy
A
B
C
D
less competition
more diversification
less protection
fewer job opportunities
1.1.7 The use of tariffs by government to discourage imports is known as …
A
B
C
D
protectionism.
import substitution.
export promotion.
globalisation.
1.1.8 To reap the benefits of efficient markets, countries rely on the principle
of…advantage.
A
Nominal
B
Competitive
C
Relative
D
Comparative
1.1.9 As from 1995, General Agreement on Tariffs and Trade was re-placed by the…
Southern African Customs Union.
A
Free Trade Area.
B
World trade organization.
C
Nepad.
1.1.10 The international trade policy that discourage the import of certain goods
and services is known as (a/an)…
A
Protectionism.
B
Import substitution.
C
Export promotion.
D
Economic growth.
(10 x2) (20)
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1.2 Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the ANSWER BOOK.
1.2.1
1.2.2
COLUMN A
Diversification
Embargo
A
B
1.2.3
Trade liberalisation
C
1.2.4
1.2.5
1.2.6
1.2.7
Specific import duties
Ad valorem
Excise duties
Import control
D
E
F
G
1.2.8
1.2.9
1.2.10
Surety
Economies of scale
Boycott
H
I
J
K
COLUMN B
A tariff as percentage of the value of imported goods
Calculated as a certain amount per unit, mass or size
of a good
A deliberate government policy to protect domestic industries against foreign competition
Custom duties and quotas
The removal of trade barriers
Production of a wide range of goods and services
An official state ban on the import of certain goods
and services
Ban on the import goods or service
Charging below the cost of production
Reduced cost of production associated with producing a large quantity of output
Third party guarantees that a loan agreement will be
repaid by signing the contract
1.3 Provide the economic term/concept for each of the following descriptions. Write only
the term/concept next to the question number. No abbreviations, acronyms or examples will be accepted.
1.3.1
1.3.2
1.3.3
1.3.4
1.3.5
1.3.6
1.3.7
1.3.8
1.3.9
1.3.10
Selling goods in a foreign market at prices that are below the cost of production in the country of origin.
Government policy of encouraging domestic producers by means of incentives and facilities to increase their output
Total reduction in the total tax payable.
Money paid to businesses to decrease their cost of production
A ban on the import of goods or services
Charging very low prices that are below the cost of production
Increased output at lower cost
Trade agreements that lay down the rules governing the level of trade
The organization that replaced GATT and promotes the reduction of all trade
barriers.
Goods that were previously imported are replaced with locally produced
goods.
(10 x 1 = 10)
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SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. This
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
Name any TWO forms of economic integration.
(2 x 1) (2)
Name any TWO methods of protectionism.
(2 x 1) (2)
Name any TWO reasons for export promotion
(2 x 1) (2)
List any TWO reasons for import substitution
(2 x 1) (2)
Name TWO of South Africa’s international trade policies
(2 x 1) (2)
Name TWO arguments in favour of protectionism
(2 x 1) (2)
List any TWO arguments for free trade
(2 x 1) (2)
List any TWO members of Southern African Custom Union
(2 x 1) (2)
List any TWO benefits of free trade
(2 x 1) (2)
Name TWO main operating principles of the world trade organization
(2 x 1) (2)
QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that their answer
addresses the question asked
3.1
3.2
3.3
3.4
3.5
How are wages of local workers negatively affected by dumping?
(2)
What effect will quotas have on imports?
(2)
What effect will quotas have on import prices?
(2)
How is ad valorem tariff applied?
(2)
Why it is unlikely that a free international trade policy will be successful in
South Africa?
(2)
QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS
REQUIRE THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING
SKILLS.
Higher order questions are grounded in the content. These types of
questions test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate.
Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
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4.1 Study the cartoon below and answer the questions that follow.
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
Identify the international trade policy depicted by the cartoon above.
(1)
What does the abbreviation WTO stand for?
(1)
Briefly describe the term import substitution.
(2)
Why is it necessary for infant industries to be protected?
(2)
How can South Africa benefit from free trade?
(2X2) (4)
MIDDLE ORDER PARAGRAPH
4.1.6 Briefly discuss subsidies and incentives as methods of export promotion.
(4 x 2=8)
4.1.7 Discuss the advantages of import substitution.
(4 x 2=8)
HIGHER ORDER PARAGRAPH
4.1.8 How can exports benefit the South Africa economy?
(4 x 2=8)
4.1.9 How successful are the methods implemented by South Africa to promote
exports of goods and services?
(4 x 2=8)
QUESTION 4.2:
4.2
Study the extract below and answer the questions that follow.
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4.2.1 Identify the commodity that is a major foreign exchange earner in South Africa.
(1)
4.2.2 Name any other BRICS member country, apart from China.
(1)
4.2.3 Briefly describe the term trade liberalisation.
(2)
4.2.4 Explain the impact of a decrease in mineral prices on the South African economy.
(2)
4.2.5 How does South Africa benefit from being a member of BRICS? (2x2) (4)
MIDDLE ORDER PARAGRAPH
4.2.6 Explain specialization and economies of scale as arguments in favour of free
(4X2=8)
4.2.7 Explain tariffs as a method for import substitution.
(4X2=8)
HIGHER ORDER PARAGRAPH
4.2.8 How is the South African economy influenced by the effects of international trade?
(4X2=8)
4.2.9 Evaluate the effectiveness of export promotion policy in South Africa .
(4X2=8)
QUESTION 4.3:
study the following information and answer the questions that follow:
AFRICAN CONTINENTAL FREE TRADE AREA (AFCFTA)
The AfCFTA is a framework.
agreement covering trade in
goods and services including the
following protocols: Trade in goods
Trade in Services, Intellectual
Property Rights, Competition
Policy, Investment and DisputeSettlement.
The AfCFTA agreement aims to
progressively reduce and eventu
ally eliminate customs duties and
non-tariff barriers on goods and
allow free provision of services in
priority sectors. Concerning trade
in goods, the goal is set for 90%
of products at zero duty across
the continent
Source :https://africa
- -partnership.org/en/afcfta
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4.3.1 Who does South Africa have free trade agreements within Southern Customs
Union (SACU)?
(1)
4.3.2 How many countries have ratified the African Continental Free Trade Agreement?
(1)
4.3.3 Briefly describe the term new partnership for African development (NePad).
(2)
4.3.4 What are the challenges with implementing the AfCFTA?
(2)
4.3.5 Explain the relationship between AfCFTA and tariffs?
(2X2) (4)
MIDDLE ORDER PARAGRAPH
4.3.6 Discuss the different forms of economic integration.
4.3.7 Discuss the reasons for export promotion.
(4 x 2) (8)
(4 x 2) (8)
HIGHER ORDER PARAGRAPH
4.3.8 Why is it important for government to keep on protecting their key strategic
industries against industrial take-overs?
(4 x 2) (8)
4.3.9 How has South Africa attempted to encourage the export of its products to
foreign markets?
(4 x 2) (8)
QUESTION 4.4:
Study the following information and answer the questions that follow:
Producers and consumers are free to buy goods and services from anywhere in the
world, without the interference of government.
Regionalisation, in the form of trade blocs, makes use of free trade and protection with
one another. Member countries pursue free trade with one another but apply trade restrictions outside the bloc e.g. NAFTA and Mercusor
Source: Linkedin.com
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Which Trade Policy is referred to in the cartoon above?
Name any member country of the Mercusor trade bloc
Briefly describe the term free trade
Explain innovation as an argument in favour of free trade.
How will protection of natural resources favour local industries?
MIDDLE ORDER PARAGRAPH
4.4.6 Explain quotas and tariffs as methods of import substitution.
4.4.7 Discuss methods to promote exports.
(1)
(1)
(2)
(2)
(2x2)(4)
(4 x 2) (8)
(4 x 2) (8)
HIGHER ORDER PARAGRAPH
4.4.8 Why should developing countries ensure survival of labour-intensive industries
in a global economy?
(4 x 2) (8)
4.4.9 How harmful can protectionism become if implemented wrongly? (4 x 2) (8)
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QUESTION 4.5:
4.5. Study the following illustration and answer the questions that follow:
SOURCE: INTERNET PICTURE
4.5.1 List ONE argument in favour of protectionism.
(1)
4.5.2 What is the name of the international organization that was created to monitor
and liberalize international trade?
(1)
4.5.3 Briefly describe the protectionism
(2)
4.5.4 What is the impact of dumping on the RSA’s economy?
(2)
4.5.5 How successful has protectionism as a trade policy protected industries
against foreign competition?
(2x2) (4)
MIDDLE ORDER PARAGRAPH
4.5.6 Explain economies of scale as argument in favour of trade.
4.5.7 Distinguish between free trade and protectionism
(4x2) (8)
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.5.8 How can governments effectively promote exports in international markets. (8)
4.5.9 Assess how an increase in import prices and an increase in export prices
(terms of trade) will affect the South African economy.
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK
ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
• A good starting point would be to define the main concept related to the question
topic.
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to discuss in the body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
• A brief summary of what has been discussed without repeating facts already
mentioned
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
Max. 2
Max. 26
Max. 10
Max. 2
TOTAL
40
QUESTION 5
• Discuss in detail arguments in favour of protectionism.
• Explain what you regard as the correct (mix trade and protectionism)
(26 marks)
(10 marks)
40
QUESTION 6
• Discuss in detail export promotion:
• Reasons (4)
• Methods (6)
• Advantages (8)
• Disadvantages (8)
(26 marks)
Evaluate the success of South African trade policy in protecting the local textile
industry against foreign competition.
(10 marks)
40
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TOPIC 9:
ECONOMIC GROWTH AND DEVELOPMENT
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct,
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 The main objective of the Skills Support Programme is to …
A
reduce government expenditure
B
encourage greater investment in training
C
build five million houses.
D
provide electricity to all households
1.1.2 The demand-side policy relates to …
A
a reduction in costs.
B
improving the efficiency of inputs.
C
the influence on inflation and unemployment
D
improving the efficiency of markets.
1.1.3 An increase in the real value of production in a country is known as economic …
A
development.
B
growth.
C
integration.
D
prosperity.
1.1.4 Which strategy failed in its objective to halve poverty and unemployment by 2014?
A
New Growth Path (NGP)
B
Reconstruction and Development Plan (RDP)
C
Accelerated and Shared Growth Initiative for South Africa (AsgiSA)
D
National Development Plan (NDP)
1.1.5 An example of a monetary policy approach used to promote economic
growth and development are known as …
A property subsidy.
B open market transactions.
C wealth taxes.
D land redistribution
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1.1.6 Money paid by the government to businesses as incentives to decrease their cost
of production is known as …
A
subsidies.
B
tariffs.
C
sureties.
D
investments.
1.1.7 Economic development …
A
lead to an increase in poverty
B
is the same as economic growth
C
is an increase in the level of economic welfare
D
is an increase in unemployment
1.1.8 A development policy which works with Sectoral Education Training Authorities
is …
A
Joint Initiative on Priority Skills Acquisition.
B
Export Processing Zones.
C
Reconstruction and Development Programme.
D
Expanded Public Works Programme.
1.1.9 An example of benefit in kind is …
A
B
C
D
old-age pensions.
disability grant.
child support.
education.
1.1.10 Aggregate supply can be stimulated through a government policy of …
A
B
C
D
lowering the production capacity of the factors of production.
limiting the efficiency of inputs.
limiting the efficiency of markets.
reducing production cost.
(10 x 2) (20)
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Fiscal policy measure
1.2.2 Monetary measure
1.2.3 Demand-side approach
1.2.4 North-South divide
1.2.5 Reconstruction and
Development Programme
1.2.6 Human capital
COLUMN B
A The focus is on attempts to increase aggregate demand in an economy
B Refers to the developed countries in the
Northern hemisphere and the developing
countries in the Southern hemisphere
C Increased or decreased interest rates
1.2.7 Deregulation
1.2.8 Globalization
1.2.9 Moral suasion
D A development policy to improve service delivery to the poor and create an environment for
human development
1.2.10 JIPSA
E cutting personal taxation
F People and their skills required for Production
G The process of increased international
cooperation and communication leading to
international trade
H The reduction of laws of controls over
economic activities
I A tool used by the SARB where banks use
their discretion to act in a certain manner
J Official rules and regulations that can hinder
service delivery
K Focus on the acquisitions of skills
(10 x 1) (10)
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 The increases in peoples’ standard of living
1.3.2 The return of land to those that have lost it due to discriminatory laws in the past
1.3.3 Tax levied on gains earned on the sale of capital goods, such as properties and
shares
1.3.4 Grants like old age pension, child support grants to provide for the poor
1.3.5 Increase in capacity of a country to produce goods and services
1.3.6 Adding value to raw materials by processing it locally into finished products for
consumers
1.3.7 The policy implemented in 1994 in South Africa to redress inequalities of the past.
1.3.8 Monetary policy to decrease economic activities
1.3.9 It is a national strategy in South Africa to develop the economy with an outlook
towards 2030
1.3.10 Higher-income earners are taxed at higher rates than lower-income earners
(10 x 1) (10)
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3
2.4
2.5
2.6.
2.7
2.8
2.9
2.10
Name TWO growth policies in South Africa.
Name any TWO characteristics of countries of the South.
Name TWO fiscal measures to stimulate the economy.
Name TWO current redress measures in South Africa.
Name TWO monetary policy instruments.
Name any TWO aims of the NDP.
Name any TWO development policies in South Africa.
Name any TWO strategies of JIPSA.
Name TWO benefits that a country obtain from foreign direct
investments (FDI’s).
Name TWO policies used for wealth distribution.
ECON GRD 12 LAB
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
What is the effect of affirmative action on the Black labour force in South
Africa?
3.2
How can an increase in household income affect economic growth?
3.3
How can SMMEs contribute to economic growth in South Africa?
3.4
What effect will a huge increase in electricity costs have on small
businesses in South Africa?
3.5
How can the cost of doing business influence the supply of goods
and services?
3.6
How does economic growth relate to economic development?
3.7
How do countries in the North contribute to the destruction of the
environment?
3.8
Why does the South African government focus on small businesses to
promote economic growth?
3.9
What is the effect on increased investment spending on the economy?
3.10 What is the relationship between lower interest rates and the availability
of credit?
ECON GRD 12 LAB
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
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DATA RESPONSE
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
QUESTION 4.1:
4.1. Study the cartoon below and answer the questions that follow.
Source: internet images
4.1.1
4.1.2
4.1.3
4.1.4
What message is portrayed in the cartoon above?
(1)
What type of policy is applied through Treasury to influence the economy? (1)
Briefly describe the term economic growth.
(2)
Why does economic growth not necessarily lead to economic
development?
(2)
4.1.5 What fiscal measures can be applied to stimulate economic growth in
South Africa?
(2X2) (4)
PARAGRAPH TYPE QUESTIONS – MIDDLE COGNITIVE
4.1.6 Differentiate between economic growth and economic development. (4 x 2) (8)
4.1.7 Briefly discuss the demand-side policies used in promoting growth and
development.
(4 x 2) (8)
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PARAGRAPH TYPE QUESTIONS – HIGHER COGNITIVE
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate)
can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
4.1.8 Evaluate the use of demand-side measures in promoting economic growth
and development in SA.
(4 x 2) (8)
4.1.9 How can investment spending be utilised efficiently to stimulate economic
development?
(4 x 2) (8)
QUESTION 4.2:
4.2.
Study the cartoon below and answer the questions that follow.
Source: internet images
4.2.1 Which man, according to the cartoon, represents the countries of the North?
(1)
4.2.2 List ONE characteristic of a country of the North.
(1)
4.2.3 Briefly describe the term globalisation.
(2)
4.2.4 What is the aim of the G20 countries?
(2)
4.2.5 What impact will the activities in the North (North-South divide) have on
the world environment?
(4)
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PARAGRAPH TYPE QUESTIONS – MIDDLE COGNITIVE
4.2.6 How can countries in the South solve the problem of underdevelopment?
(4 x 2) (8)
4.2.7 Discuss economic growth and literacy rate as criterion to distinguish between
the countries in the North and countries from the South.
(4 x 2) (8)
PARAGRAPH TYPE QUESTIONS – HIGHER COGNITIVE
4.2.8 How can economic integration reduce the economic gap in the world? (4 x 2) (8)
4.2.9 How can the development of small businesses benefit the country?
(4 x 2) (8)
QUESTION 4.3:
4.3. Study the graph below and answer the questions that follow.
NDP: TARGET VS ACTUAL UNEMPLOYMENT
30
Percentage
25
28,48
25,4 24,69
25,16
20
20
14
15
10
6
5
0
2010
2015
2020
2030
Year
NDP target
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Actual
What is the trend of the actual unemployment rate since 2010?
In what year was the NDP implemented in South Africa?
Briefly describe the term economic development.
What is the Vision 2030 of the NDP in South Africa?
Deliberate whether the NDP can reach its intended target of 6% for
unemployment in 2030?
ECON GRD 12 LAB
(1)
(1)
(2)
(2)
(4)
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PARAGRAPH TYPE QUESTIONS – MIDDLE COGNITIVE
4.3.6 Briefly discuss the objectives of the National Development Plan (NDP).
(4 x 2) (8)
4.3.7 Explain progressive personal income taxes and wealth taxes as instruments
to reduce income inequality.
(4 x 2) (8)
PARAGRAPH TYPE QUESTIONS – HIGHER COGNITIVE
4.3.8 How could recent labour laws contribute towards wealth creation in South Africa?
(4 x 2) (8)
4.3.9 How does corruption influence good governance in South Africa? (4 x 2) (8)
QUESTION 4.4:
4.4. Read the extract below and answer the questions that follow.
SOUTH AFRICA ECONOMIC OUTLOOK: APRIL 2023
In the immediate term, the growth outlook for South Africa is bleak, and a scenario of
flat to no growth is a real possibility for 2023. The country could already be in a technical recession in Q1 2023. To minimize further deterioration and create conditions
for future growth, urgent action is needed to address supply-side constraints to the
country’s growth
Adapted source: https://www2.deloitte.com/za/en/insights/economy/emea/africa-economic-outlook.html
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Which government department drives fiscal policy in South Africa?
What does the acronym JIPSA stands for?
Briefly describe the term technical recession.
How can business efficiency influence economic growth?
What urgent supply side measures is needed to stimulate the economy?
(1)
(1)
(2)
(2)
(4)
PARAGRAPH TYPE QUESTIONS – MIDDLE COGNITIVE
4.4.6 Briefly discuss cost of doing business to achieve economic development
in South Africa.
(4 x 2) (8)
4.4.7 Discuss interest rate changes and open market transactions as monetary
policy instruments to influence aggregate demand.
(4 x 2) (8)
PARAGRAPH TYPE QUESTIONS – HIGHER COGNITIVE
4.4.8 How can taxation be used to stimulate employment in South Africa.
4.4.9 How can the Expanded Public Work Programmes be used to reduce the
the unemployment rate?
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QUESTION 4.5:
4.5.
Study the cartoon below and answer the questions that follow.
Source: adapted internet images
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
What does the acronym BEE stands for?
Name one criteria for someone to qualify for BEE.
Briefly describe the term economic growth.
Distinguish between BEE and affirmative action?
How can BEE contribute towards economic growth?
(1)
(1)
(2)
(2)
(2X2) (4)
PARAGRAPH TYPE QUESTIONS – MIDDLE COGNITIVE
4.5.6 Explain Black Economic Empowerment (BEE) as a development initiative.
(4 x 2) (8)
4.5.7 What is ASGISA and explain the aims of ASGISA.
(4 x 2) (8)
4.5.8 Explain the main objectives of the New Growth Path.
(4 x 2) (8)
PARAGRAPH TYPE QUESTIONS – HIGHER COGNITIVE
4.5.9 Evaluate the Growth, Employment and Redistribution (GEAR) approach as a
development policy in South Africa.
(8)
4.5.10 Evaluate BBBEE as a measure to redress inequalities in South Africa.
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C are as follows:
MARK ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
•
A good starting point would be to define the main concept related to the
question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
•
A brief summary of what has been discussed without repeating facts already
mentioned
•
Any opinion or value judgement on the facts discussed.
•
Additional support information to strengthen the discussion/analysis.
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
• Examine monetary and fiscal policies as factors in the demand-side approach
to growth and development.
(26 marks)
• How can economic growth lead to economic development?
(10 marks)
QUESTION 6
•
•
Discuss the aims and objectives following growth and development policies.
– Reconstruction and Development Programme
– Growth Employment and Redistribution
(26 marks)
Evaluate the success of these two policies.
(10 marks)
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QUESTION 7
•
Discuss the following economic growth and development policies in South Africa
by focusing on their aims and/or objectives:
-
•
Accelerated Growth Initiative for South Africa (ASGISA)
Joint Initiative on Priority Skills Acquisitions (JIPSA)
New Growth Path (NGP)
National Development Skills Strategy (NDSS)
Expanded Public Works Programme (EPWP)
National Development Plan (NDP)
(26 marks)
Evaluate the successes of each of these policies
ECON GRD 12 LAB
(10 marks)
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TOPIC 10:
REGIONAL DEVELOPMENT
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct,
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 … focuses on improving competitiveness in manufacturing and involves cross cutting issues.
A
B
C
D
National Research Development Strategy
Industrial Policy Action Plan
Integrated Manufacturing Strategy
National industrial Policy Framework
1.1.2 An …is one where business activities in a particular area/region are concentrated.
A
B
C
D
industrial development
industrial development strategies
regional development
industrial hub
1.1.3 The SDI programme consists of …local SDIs.
A
B
C
D
14
9
3
18
1.1.4 The … is Africa’s first automotive city, located in the country’s capital city of
Tshwane, Gauteng.
A
B
C
D
TASEZ
ASEZ
ELSEZ
SBSEZ
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1.1.5 A purpose-built industrial estate is physically enclosed and linked to an international
port or airport is known as a/an
A
Spatial Development Initiatives.
B
Industrial Development Zone.
C
Special Economic Zones.
D
Industrial Policy.
1.1.6 Which of the following is an aim of regional development?
A
B
C
D
Attracting new investment opportunity in export orientated industries
Promotes higher levels of economic efficiency and productivity
Developing the inherent economic potential in underdeveloped areas
To prevent new imbalances from emerging and thereby increase the
standard of living in those areas
1.1.7 The … is an investment that makes an additional industrial investment allowance
available to projects in research development fields.
A
B
C
D
Strategic Investment Programme (SIP)
Services to Business Processes
Customs-free incentives
Foreign Investment Grant
1.1.8 Economic activities which create value-added products in all sectors are known
as…development.
A
social
B
productive
C
employment
D
industrial
1.1.9
Which institution conducted that ‘black South Africa’s hold at least 23% of top 100
companies?
A
B
C
D
Statistics South Africa
Johannesburg Security Exchange
South Africa Revenue Services
South Africa Reserve Bank
1.1.10 Corruption, nepotism and mismanagement of public funds have occurred in many
provinces and municipalities resulting in…
A
provisioning of resources
B
partnerships
C
poor governance
D
competitiveness
(10 x 2 ) (20)
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Industrial development
COLUMN B
A A strategy to strengthen institutional capacity to deliver
services that will facilitate development
1.2.2 Corridors
1.2.3 Regional development
1.2.4 Industrial development
B Efforts by governments to move manufacturing and
other businesses from metropolitan areas to rural area
C Track of land that forms passageway allowing access
from one area to another
1.2.5 Integrated manufacturing
strategy
D Concentrates on export-oriented manufacturing
1.2.6 Industrial Development
Zones (IDZs)
E organised economic activity to create manufacturing,
mining and services sectors
1.2.7 Financial incentives
F Businesses that produce the same type of products
1.2.8 Special economic zone
1.2.9 Industrial Policy Action
Plan (IPAP)
G A purpose built industrial estate linked to an airport
or seaport with export as the main objective
/ industrial estates that are physically enclosed
and adjacent to a harbour or airport
1.2.10 Industry
H aims to reduce the centralisation of industries
I developed a new support programme for clothing
and textiles
J An inter-government organisation that aim to promote
socio-economic cooperation and integration
K help with start-up and running costs
(10 x 1 ) (10)
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1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 The track of land that forms a passageway allowing access from one area to
another
1.3.2 Efforts by governments to move manufacturing and other businesses from metropolitan areas to rural areas
1.3.3 Geographically enclosed area identified for the development of specific economic
activities
1.3.4 An organization for the promotion of accelerated socio-economic integration of the
African continent.
1.3.5 A passageway allowing access from one area to another
1.3.6 Industrial estates that are physically enclosed and near to a harbor or airport
1.3.7 Efforts by governments to move manufacturing and other businesses from metropolitan areas to rural areas
1.3.8 A strategy to strengthen institutional capacity to deliver services that will facilitate
development
1.3.9 A purpose built industrial estate linked to an airport or seaport with export as the
main objective
1.3.10 Changes in technology which causes a mismatch between the skills that
employees can offer and the skills that employers require
(10 x 1 ) (10)
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
List any TWO incentives used by the South African government to improve
industrial development
(2 x 1) (2)
Name TWO aspects of regional industrial development policy
(2 x 1) (2)
Provide TWO industrial development strategies used in South Africa (2 x 1) (2)
Name TWO industrial Development Zones in South Africa
(2 x 1) (2)
List TWO South Africa’s regional development policies in terms of benchmark
criteria
Name TWO South Africa’s industrial development policies
(2 x 1) (2)
Name any TWO reasons for industrial development
(2 x 1) (2)
Name any TWO aims of the National Industrial Policy Framework
(2 x 1) (2)
Provide any TWO growth sectors of Integrated manufacturing strategy (2 x 1)(2)
Name any TWO Special Economic Zones
(2 x 1) (2)
Name any TWO industrial development strategies
(2 x 1) (2)
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QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
Why are shops at airports duty free?
(1 x 2)2
How can Black Economic Empowerment benefit the development of industries in
rural areas?
(1 x 2)2
3.3
What negative effect does unskilled labour have in the workplace?
(1 x 2)2
3.4
How much importance has the economic regional integration become to keep
each country’s economy competitive?
(1 x 2)2
3.5
Explain competitiveness as international best practices in terms of regional
development.
(1 x 2)2
3.6
Why is it important for South Africa to focus on industrial development?
(1 x 2)2
3.7
Why the is IDZ regarded as a duty free incentive?
(1 x 2)2
3.8
What is the purpose of the government in the adoption of regional development
policies?
(1 x 2)2
3.9
How will South Africa benefit from the car manufacturer’s investment?
(1 x 2)2
3.10 How do Special Economic Zones (SEZs) contribute to industrial development?
(1 x 2)2
QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate)
can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
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QUESTION 4.1:
Study the extract below and answer the questions that follow
DUBE TRADEPORT AFRICA’S GLOBAL MANUFACTURING
AND AIR LOGISTICS PLATFORM
Dube Tradeport Industrial Development Zone (IDZ), is a world-class development offering globally integrated logistics and manufacturing infrastructure, and
support for a range of airport related activities, including cargo operations,
warehousing, agriculture, and commercial real estate for office, retail, and hospitality.
The benefits offered to businesses operating within the Industrial Development
Zone (IDZ) are geared towards promoting business growth, revenue generation, employment creation, the export of value-added commodities, and the attraction of both foreign and local investment – all enhancing South Africa’s manufacturing and export capabilities.
4.1.1
In which provincial government is the Dube Trade Port IDZ
located?
(1)
4.1.2
Identify ONE reason for industrial development
(1)
4.1.3
Briefly describe the term industrial development zone
(2)
4.1.4
Why is manufacturing important for industrial development?
(2)
4.1.5
How does the existing infrastructure promote the development of
the Dube Tradeport IDZ?
(2x2)
(4)
MIDDLE ORDER PARAGRAPH
4.1.6 Briefly explain reasons for industrial development.
4.1.7 Outline the appropriateness of South Africa industrial policies
(4x2) (8)
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.1.8
Analyse the role/importance of good governance for regional development
policies in terms of benchmark criteria
(8)
4.1.9 How do internal limitations impact the appropriateness of South Africa’s industrial
Policies
(8)
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QUESTION 4.2:
Study the information below and answer the questions that follow
REGIONAL DEVELOPMENT BENCHMARK CRITERIA
• Provisionig of
resources
• Good governance
Free market
orientation
Competitiveness
Intergration
Sustainability
• Partnerships
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
• Investment
of social
capital
Which international practices for regional industrial development
policies describe “effectively and free of corruption.”?
Name ONE example of provision of resources that should be provided in resource-poor areas
Briefly describe the term regional industrial development
Explain total development as a multi-dimensional process of regional industrial development policies
How unsuccessful is the appropriateness of South Africa’s
industrial policies?
(2x2)
MIDDLE ORDER PARAGRAPH
4.2.6 Briefly discuss good governance and partnerships as regional development in
terms of benchmark criteria
(4x2) (8)
4.2.7 Discuss in detail benefits of Special Economic Zones (SEZs) in South Africa
(4X2)(8)
HIGHER ORDER PARAGRAPH
4.2.8 What is the impact of industrial development zones on employment in South
Africa?
(8)
4.2.9 How is industrial development linked to national development?
(8)
4.2.10 How do business benefit from the Tshwane Automotive SEZ (TASEZ)
(8)
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(1)
(1)
(2)
(2)
(4)
QUESTION 4.3:
Study the extract below and answer the questions that follow
GOVERNMENT CONTINUES TO PRIORITISE
SMALL BUSINESSES
“The Department of Small Business Development and SEDA formed a partnership with the International Trade Centre (ITC), in order to bring the
SheTrades programme to South Africa and create a SheTrades ZA hub.
“The programme aims to empower women-owned enterprises to trade locally,
regionally, and internationally. The hub supports strengthening the business
skills and competitiveness of at least 10,000 South African women entrepreneurs over a four-year period,”
[Source: https://www.sanews.gov.za/south-africa/small-business-urged-apply-support]
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Which incentive address business skills used by the South Africa
government to improve industrial development?
Name the government that promote industrial development in underdeveloped regions
Briefly describe the term industrial development
How will this SheTrades programme contribute to integration in
South Africa?
How can small business create a competitive advantage with incentive compensation?
(2x2)
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 Briefly discuss critical infrastructure facilities and Small
Business Support Program .
(4x2) (8)
4.3.7 Briefly explain the focus of the integrated Manufacturing Strategy (IMS) (4x2) (8)
HIGHER ORDER PARAGRAPH
4.3.8 How successful can regional development in South African be?
(8)
4.3.9 Analyse the impact of IPAP will have on industrial development in the private
sector of South Africa?
(8)
4.3.10 What can the government do to promote industrial development in South Africa?
(8)
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QUESTION 4.4:
Study the pictures below and answer the questions that follow
Tourism
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
Agriculture
Cultural
industries
Which industrial development strategy prioritise growth of sectors
above?
Name the institution that focus on developing the global competitiveness of the South Africa manufacturing enterprises
Briefly describe the term industrial development policies
Why are key inputs such as energy important for industrial
Development?
How do cultural industries impact on aims of regional development?
(2x2)
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.4.6 Briefly discuss Coega and East London industrial development zones (IDZ)
(4x2) (8)
4.4.7 Discuss how the Small and Medium Enterprise Development Programme
(SMEDP) and Foreign Investment Grants (FIG) help to improve industrial development in South Africa
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.4.8 How does improved infrastructure contribute to industrial development? (8)
4.4.9 How does Maputo Development Corridor (MDC) strength Gauteng GDP? (8)
4.4.10 How will the introduction of a green economy impact the industrial
development plan of south Africa?
(8)
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QUESTION 4.5:
Study the information below and answer the questions that follow
MAPUTO DEVELOPMENT CORRIDOR
[source: google images]
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
In which province is Maputo development corridor connecting in
South Africa
How many countries are connected to Maputo Development Corridor?
Briefly describe the term corridor
How can South Africa benefit from spatial development initiatives?
Why is the promotion of development corridors important rather
than transportation routes
(2x2)
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.5.6 Briefly explain the focus of the national industrial policy framework (NIPF) and the
industry policy action plan (IPAP)
(4x2) (8)
4.5.7 Outline the aims of regional development.
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.5.8 Explain the focus area of development trade policy of special economic zones.
(8)
4.5.9 How does job creation improve regional development in South Africa?
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C are as follows:
MARK ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
•
A good starting point would be to define the main concept related to the
question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
•
A brief summary of what has been discussed without repeating facts already
mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
• Discuss in detail South Africa’s initiatives(endeavours) in regional development
(26 marks)
• How successful is South Africa’s regional development in terms of their benchmark criteria?
(10 marks)
40
QUESTION 6
• Discuss in detail the following South Africa’s initiatives(endeavours) in regional development
- Spatial development imitative
(13)
- Industrial development zone
(13) (26 marks)
• How has BBBEE policy benefited the Black people of South Africa? (10 marks)
40
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TOPIC 11:
ECONOMIC AND SOCIAL INDICATORS
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 All persons between the age of 15 and 65 who supply labour for productive activities.
A
Unemployment Rate
B
Employment Rate
C
Repo rate
D
Economically Active Population
1.1.2 The organisation that is responsible to publish statistic data in South Africa.
A
South African Reserve Bank
B
International Monetary Fund
C
Statistics South Africa
D
System of National Accounts
1.1.3 The indicator that is used to measure an increase in the prices of goods produced
locally.
A
Consumer Price Index
B
Inflation rate
C
Producer Price Index
D
Deflation
1.1.4
An example of a social indicator is …
A
Gross Domestic Product
B
Exchange Rate
C
Life Expectancy
D
Inflation
1.1.5 … is the supply of long-term deposits at banks.
A
M1
B
M3
C
M2
D
SARB
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1.1.6 Malnutrition is expressed by …
A
obesity
B
infant mortality
C
health expenditure
D
dwarfism
1.1.7 An indicator that relates to headline inflation.
A
Money supply
B
Gross Domestic Product
C
Consumer Price Index
D
Nominal Gross Domestic Product
1.1.8 If productivity increases are lower than the real wage increases, …
A
inflation will increase.
B
more workers will be employed.
C
labour productivity will lower.
D
more jobs will be created.
1.1.9 The level of urbanization is measured by …
A
globalisation.
B
establishment of new towns.
C
refuse removal.
D
secondary school enrolment.
1.1.10 The official count or survey of a population.
A
Gini coefficient
B
Housing
C
Statistic South Africa
D
Census
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1.2 Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Comparisons
1.2.2 Life Expectancy
1.2.3 Under five mortality
1.2.4 Youth literacy rate
1.2.5 Terms of trade
1.2.6 Social Indicator
COLUMN B
A The percentage of the 15 – 24 age
group that can read and write.
B Contributes to world peace and creating
partnerships between countries.
C Changing data that is used to inform us
of the changes in the economy.
1.2.7 United Nations
D The average period that a person may
expect to live.
1.2.8 World Bank
E The ratio of export and import prices.
F The indicator is also known as the human development indicator.
G The rate at which SARB lends money to
commercial banks
H The number of children who die before
the age of five.
I
The international organization that promotes economic recovery and development.
J
Movement of people from rural areas to
cities and towns
(10x1) 10
1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 The policy that aims to stabilize prices by combating inflation.
(1x1)
1.3.2 The value of one country’s currency in relation to another country’s currency.
(1x1)
1.3.3 Real GDP divided by the number of workers employed.
(1x1)
1.3.4 The number of children who will die before the age of one.
(1x1)
1.3.5 The social indicator used to indicate the efficiency of the education system.
(1x1)
1.3.6 The curve that is used to show the distribution of income.
(1x1)
1.3.7 An international body working to protect the rights of children.
(1x1)
1.3.8 The rate at which commercial banks lends money to prominent clients.
(1x1)
1.3.9 An index used to compare countries human aspects of development.
(1x1)
1.3.10 The labour force divided by the total working age.
(1x1)
(10 x 2 ) (20)
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SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6
2.7
2.8
2.9
2.10
List any TWO things to consider when assessing the economy.
(2 x 1)
Name any TWO indicators that shows an increase in prices over long.
periods of time.
(2 x 1)
Name any TWO productivity indicators.
(2 x 1)
Name TWO international organisations that require standardisation of indicators.
(2 x 1)
List any TWO indicators that measures the health of the population.
(2 x 1)
Name any TWO Instruments used to measure human development.
(2x 1)
List any TWO health indicators
(2X1)
Name TWO main items used to calculate trade balance.
(2 x 1)
Name any TWO indicators relating to money supply.
(2 x 1)
Name TWO inflation indicators.
(2 x 1)
(10 x 2 ) (20)
QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
Why is the census a valuable indicator for the government?
(1 x 2)
How does secondary enrollment influence the productivity?
(1 x 2)
What is the influence of inflation on the growth of the economy?
(1 x 2)
Why is the standardization of data necessary to the government?
(1 x 2)
What is the connection between the life expectancy of a country and its population
rate?
(1 x 2)
3.6
What effect will a high illiteracy rate have on economic development?
(1 x 2)
3.7
How will an improved infrastructure contribute to an increase in quality of life?
(1 x 2)
3.8
Why is it important to know the life expectancy rate of a country?
(1 x 2)
3.9
What effect will slow economic growth have on the economy?
(1 x 2)
3.10 How will a decrease in the inflation rate benefit low-income earners?
(1 x 2)
(10 x 2 ) (20)
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QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their knowledge,
through logical reasoning and also have an awareness of their current economic climate. Content
(covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 4.1:
Study the information below and answer the questions that follow:
4.1.1 Identify the organisation that is responsible for publishing data on price increases
in South Africa.
(1)
4.1.2 Name the indicator that best measures the data as depicted above.
(1)
4.1.3 What is the effect on the economy if products are more expensive?
(2)
4.1.4 Why is there a sudden increase in prices from April 2022 to April 2023?
(2)
4.1.5 How can the South African government combat inflation?
(2x2)(4)
MIDDLE ORDER PARAGRAPH
4.1.6 Explain the role of international institutions in the standardisation of a country's
indicators.
(4x2)(8)
4.1.7 Differentiate between producer price index and consumer price index as
economic indicators
.
(4x2) (8)
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HIGHER ORDER PARAGRAPH
4.1.8 Why is it important for the government to keep track of money supply in a country?
(8)
4.1.9 How effective is productivity as an economic indicator?(6.2)
(8)
QUESTION 4.2:
Study the information below and answer the questions that follow:
4.2.1. Name the social indicator that is depicted above.
4.2.2. What was the life expectancy of a South African man in 2020?
4.2.3. Why is the life expectancy of woman higher than men in South Africa?
4.2.4. How does life expectancy correlate with the development of a country?
4.2.5. How can the South African government improve the life expectancy?
MIDDLE ORDER PARAGRAPH
4.2.6 Discuss demographics as a social indicator.
4.2.7 Briefly discuss health as a social indicator.
(4X2) (8)
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.2.7 How does services deliverance impact economic development in
South Africa?
4.2.8 Why is it important for the government to assess the performance of
the economy?
4.2.9 How does the International Monetary Fund and the United Nations as
International organisations, play a role in the standardisation of the indicators
of member countries?
ECON GRD 12 LAB
(1)
(1)
(2)
(2)
(4)
(8)
(8)
(8)
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QUESTION 4.3:
Study the cartoon below and answer the questions that follow:
4.3.1. Identify any ONE cause why the economic activities are declining.
(1)
4.3.2. Name the indicator that is linked to electricity.
(1)
4.3.3. What is the effect of grey listing on investments?
(2)
4.3.4. Why is it important for the government to analyse data on the economy? (2)
4.3.5. How can the government improve economic forecasting?
(2x2) (4)
MIDDLE ORDER PARAGRAPH
4.3.6. Discuss employment as an economic indicator.
(4x2)(8)
4.3.7 Explain the role of international institutions in the standardisation of a country's
indicators.
(4x2)(8)
HIGHER ORDER PARAGRAPH
4.3.8 What is the impact of globalisation on economic development?
4.3.9 How can South Africa benefit from trading in global markets?
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QUESTION 4.4
4.4. Study the following information and answer the questions that follow:
4.4.1 Give any other example of a basic service.
(1)
4.4.2 Identify the percentage of South African households who do not have access to
improved water resources.
(1)
4.4.3 Briefly describe the term social indicator.
(2)
4.4.4 What measures can be used to ensure sufficient water supplies in South Africa?
(2)
4.4.5 How successful has the South African government been in rendering services as a
social indicator?
(4)
MIDDLE ORDER PARAGRAPH
4.4.6 Briefly discuss employment indicators
4.4.7 Briefly discuss exchange rates as a foreign trade indicator.
(4x2) (8)
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.4.8 Evaluate the importance of life expectancy as a social indicator to the government.
(8)
4.4.9 Evaluate the impact of a downgrading of South Africa’s credit ratings on the
economy?
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
• A good starting point would be to define the main concept related to
the question topic.
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to discuss in
the body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a
graph and explain/Use the graph given and explain/Complete the given
graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
•
A summary of what has been discussed without repeating facts already mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
• Discuss Social Indicators in detail
(26)
• How successful has the South African government been in promoting economic
development using the social indicators.
(10)
(40)
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QUESTION 6
•
Discuss the following economic indicators in detail:
− Foreign Trade Indicators
− Money supply
(13 Marks)
(13 Marks)
(26)
• How can productivity be used more effectively to benefit the South African economy?
(10)
(40)
QUESTION 7
•
•
Discuss is detail the following economic indicators:
- Inflation rate
- Employment rate
(26)
Why is it important for the government to consider assessing the performance of
the economy from time to time?
(10)
(40)
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TOPIC 12:
INFLATION
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to read
the questions carefully and to make sure you understand what the question is asking. Always
remember one alternative is completely wrong, one is nearly correct and one is totally correct. It is easy to eliminate the completely wrong answer, but if you do not read the question
carefully the nearly correct answer will also appear correct. The answer will NEVER be two
options. Only ONE option is correct. Your answer will immediately be marked incorrect if you
write TWO options.
1.1
Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1 An inflation rate that excludes items with highly volatile prices is called … inflation.
A
administered
B
headline
C
inclusive
D
core
1.1.2 Deflation is described as a decline in the …
A
salaries of all workers.
B
Gross Domestic Product.
C
prices of certain products
D
general price level
1.1.3 Low growth, high unemployment and high rates of inflation are characteristics
of …
A
stagflation
B
inflation
C
hyperinflation
D
deflation
1.1.4 The South African Reserve Bank is responsible for implementing … policy.
A
fiscal
B
budget
C
monetary
D
foreign trade
1.1.5 The institution that publishes the consumer price index on a monthly basis is …
A
Development Bank
B
the Department of Tourism.
C
the South African Revenue Services
D
Statistics South Africa.
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1.1.6 Cost-push inflation can be caused by ...
A
lower wages.
B
a decrease in input costs.
C
exchange rate depreciation
D
increase in productivity
1.1.7 When the economy is experiencing a low growth, high unemployment and high inflation, it is called …
A
administered price.
B
stagflation
C
hyperinflation.
D
producer price index.
1.1.8 Headline inflation is used by the SARB to decide on the level of …
A
unemployment rate.
B
employment rate.
C
productivity rate
D
interest rate.
1.1.9 Which ONE of the following is a fiscal measure to combat inflation?
A
A decrease in direct taxation
B
A decrease in government expenditure
C
An increase in productivity
D
Increased import control
1.1.10 The ratio of the GDP at current prices to the GDP at constant prices is called the
… GDP deflator
A
explicit
B
implicit
C
constant
D
inflation
(10 x 2) (20)
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Consumer price index
COLUMN B
A
increase in output with the same factor
inputs
1.2.2 Producer price index
B
prices of goods and services that are
set by the government
1.2.3 Core inflation
C
prices of goods and services that are
set by the government
1.2.4 Monetary Policy
Committee
D
the measurement of the production
cost of goods over time
1.2.5 Administered prices
E
excludes items from the average
basket that have highly volatile prices
1.2.6 Hyper-inflation
F
an extremely rapid rise in the general
price level above 50%
1.2.7 Cash reserve
requirement
G
a negative economic growth for at
least two consecutive quarters.
1.2.8 Productivity
H
forms part of monetary policy used to
control the supply of money
1.2.9 Weighted index
I
a negative economic growth for at
least two consecutive quarters
1.2.10
J
Shows the relative importance of an
item in a basket of goods.
K
makes decisions on repo (repurchase)
rate.
(10 x 1) (10)
1.3 Provide the economic term/concept for each of the following descriptions.
Write only the term/concept next to the question number. No abbreviations,
acronyms or examples will be accepted.
1.3.1 When consumers gain access to large amounts of credit which enable them to buy
more goods and services, it refers to … inflation.
1.3.2 The CPI is constructed and calculated by … the South African Development Bank.
1.3.3 The prices are set by government or controlled by government through appointed
authorities.
1.3.4 Prices of goods and services that continuously decrease over a long period of
time.
1.3.5 Monetary policy approach used by the SARB to keep price changes within 3–6%.
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1.3.6 Rate at which the Reserve bank lends money to commercial banks.
1.3.7 It is a type of inflation whereby prices rise so rapidly that people lose confidence in
the value of money.
1.3.8 Unadjusted CPI figures.
1.3.9 Assesses the impact of changes in the relative weighting of production inputs.
1.3.10 An increase in salaries that results in workers paying a higher income tax rate
(10 x 1) (10)
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but
merely few words or a phrase. This MUST be done in bullet form. This types of questions are
applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6.
2.7
2.8
2.9
2.10
Name any TWO Examples of fiscal measures that can be taken by the
(2 x 1)
Minister of finance regarding to reduce money supply
(2 x 1)
Name any TWO Examples of other measures to curb inflation
(2 x 1)
List any TWO components causing relative increase in aggregate demand (2 x 1)
Name two inflation indicators.
(2 x 1)
Name any TWO types of consumer inflation.
(2 x 1)
Name any TWO causes of cost-push inflation.
(2 x 1)
List any TWO types of inflation.
(2 x 1)
Name any TWO types of producer inflation.
(2 x 1)
List any TWO ways to measure inflation.
(2 x 1).
Name any TWO causes of demand - pull inflation.
(2 x 1)
QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
What do monetarists believe to be the main reason for inflation?
(1 x 2)
How is reduction in taxes linked to demand pull inflation?
(1 x 2)
How will an increase in export earnings affect the inflation rate?
(1 x 2)
What effect will low labour productivity have on inflation?
(1 x 2)
What is the value of the production price index (PPI) as an inflation indicator?
(1 x 2)
How will a decrease in the inflation rate benefit the low-income
(1 x 2)
earners?
(1 x 2)
How can price stability affect the economy positively?
(1 x 2)
Why would high inflation lead to retrenchment in the workplace?
(1 x 2)
How would the cost of imported key inputs contribute to a higher inflation rate?
(1 x 2)
How is a reduction in taxes linked to demand pull inflation?
(1 x 2)
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QUESTION 4 : DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total 10
marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of questions
test critical thinking, where candidates should be able to apply their
knowledge, through logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be
found in textbooks.
QUESTION 4.1:
4.1
Study the following extract and answer the questions that follow:
INFLATION RATE
Identify the index used to measure South Africa's inflation rate.
(1)
Give the main reason for the increase in the CPI inflation above.
(1)
Briefly describe the term core inflation.
(2)
How can the South African Reserve Bank ensure that the CPI fluctuates
within the 3%–6% band?
(2)
4.1.5 Calculate the percentage change in the inflation rate between 2021 and 2022.
Show ALL calculations.
(4)
4.1.1
4.1.2
4.1.3
4.1.4
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MIDDLE ORDER PARAGRAPH
4.1.6 Describe the fiscal measures that can be used to combat demand-pull
inflation.
4.1.7 Distinguish between the consumer and producer price index.
(8)
(8)
HIGHER ORDER PARAGRAPH
4.1.8 How does an increase in demand for goods and services cause inflation? (8)
4.1.9 Evaluate how successful the fiscal policy is in combatting inflation.
(8)
QUESTION 4.2:
4.2. Study the graphs below and answer the questions that follow.
Which ONE of the two types of inflation is the official inflation rate?
(1)
What is the inflation target range set by the SARB?
(1)
Briefly describe the term stagflation.
(2)
What effect will an increase in interest rates have on the trend of the CPI curve?
(2)
4.2.5 Why is core inflation lower than the CPI?
(4)
4.2.1
4.2.2
4.2.3
4.2.4
MIDDLE ORDER PARAGRAPH
4.2.6 Discuss an increase in household consumption as a cause of Demand-pull
inflation.
(8)
4.2.7 Explain the role of the South African Reserve Bank to combat inflation.
(8)
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HIGHER ORDER PARAGRAPH
4.2.8 Advise the governor of the Reserve Bank on how monetary policy could be
used to combat inflation.
(8)
4.2.9 How has South Africa’s inflation targeting-policy been beneficial to the
economy?
(8)
QUESTION 4.3:
4.3. Study the following illustration and answer the questions that follow:
My costs have gone up more than 6.59%
Adapted source: Findlay Cartoon
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Identify the type of inflation caused by gasoline inflation.
Identify a cost reason for inflation, not mentioned above.
Briefly describe the term hyper-inflation.
Briefly explain the price index that measures the cost of living.
How do excessive wage demands affect inflation?
MIDDLE ORDER PARAGRAPH
4.3.6 Explain the negative effects of inflation on investors and people with a fixed
income.
4.3.7 Discuss demand-pull inflation and cost-push inflation.
HIGHER ORDER PARAGRAPH
4.3.8 How can South African households contribute to a lower inflation rate?
4.3.9 Why is the SARB concerned about the impact of inflation on the Balance of
Payments?
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(1)
(1)
(2)
(2)
(4)
(8)
(8)
(8)
(8)
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QUESTION 4.4:
4.4. Study the following extract and answer the questions that follow:
4.4.1 Identify ONE item, which low-income earners may struggle to pay for, when
inflation is high.
(1)
4.4.2 Which phrase in the extract implies a decrease in the quantity of goods
purchased by the consumer?
(1)
4.4.3 Briefly describe the term inflation.
(2)
4.4.4 How do the actions of trade unions cause inflation?
(2)
4.4.5 How can government use taxation to combat inflation?
(4)
MIDDLE ORDER PARAGRAPH
4.4.6 Explain how wages and exchange rates can lead to cost-push inflation.
(8)
4.4.7 Explain the role of price expectation on inflation in South Africa.
(8)
HIGHER ORDER PARAGRAPH
4.4.8 How does the government contribute to higher inflation?
(8)
QUESTION 4.5:
4.5. Study the following extract and answer the questions that follow:
No end in sight
While inflation has been decelerating from the high in October, economists
warn that there are risks to the upside.
Inflation has never been good to the economy. However, whenever there is
expected inflation, governments around the world take appropriate steps to
minimise inflation to a certain extent. Inflation and economic growth are parallel lines and can never meet. Inflation reduces the value of money and makes
it difficult for the common people to survive. Inflation and economic growth are
incompatible because the former affects all sectors.
Source: www.fin24.com
4.5.1
4.5.2
4.5.3
4.5.4
4.5.5
What, according to the extract, is the effect of inflation on money?
Which institution is responsible to monitor inflation in South Africa?
Briefly describe the term stagflation.
Explain the effect of an increase in interest rates on inflation.
What are the negative effects of inflation on economic growth?
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(1)
(1)
(2)
(2)
(4)
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MIDDLE ORDER PARAGRAPH
4.5.6 Explain the consequences of inflation on wage and salary earners.
(8)
HIGHER ORDER PARAGRAPH
4.5.7 Why is a high inflation rate a concern for business performance?
4.5.8 Evaluate inflation targeting on the South African Economy.
(8)
(8)
4.6
Study the following graph and answer the questions that follow:
Source: google images
4.6.1 Name ONE cause of demand-pull inflation that may have influenced an
increase in demand as presented above.
(1)
4.6.2 Give ONE example of an external cause of inflation.
(1)
4.6.3 Briefly describe the term inflation.
(2)
4.6.4 How does demand and supply affect inflation?
(2)
4.6.5 Why is the SARB concerned about the impact of inflation on the Balance of
Payments?
(4)
MIDDLE ORDER PARAGRAPH
4.6.6 Discuss the impact of higher inflation on the individual taxpayer.
4.6.7 Discuss other measures that can be used to combat inflation.
(8)
(8)
HIGHER ORDER PARAGRAPH
4.6.8 How can monetary and fiscal measures be used to combat inflation in South
Africa?
(8)
4.6.9 How does foreign direct investment influence inflation in the economy?
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document. In the
examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction (definition),
Body (headings and full sentences in bullets) additional part and conclusion (summarising). The
mark allocations for Section C is as follows:
MARK ALLOSTRUCTURE OF ESSAY
CATION
Introduction
The introduction is a lower-order response.
Max. 2
•
A good starting point would be to define the main concept related to the
question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ AnMax. 26
alyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Max. 10
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
Max. 2
•
A brief summary of what has been discussed without repeating facts already mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
40
QUESTION 5
• Discuss the consequences of inflation.
• How does foreign direct investment influence inflation in the economy?
(26)
(10)
[40]
QUESTION 6
• Discuss in detail the measures to combat demand-pull and/or cost-push inflation
(26)
• What is the impact of inflation on the individual taxpayer?
(10)
[40]
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TOPIC 13:
TOURISM
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct,
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.2
Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question
number.
1.1.9 . Tourism is a … intensive industry.
A
capital
B
production
C
labour
D
trade
1.1.2 South African travelling abroad are considered… tourists.
A
Cultural
B
domestic
C
local
D
outbound
1.1.3 South African indigenous uniqueness is represented by.
A
The Vredefort dome
B
The ISimangaliso Wetland Park
C
Robben Ireland
D
Mapungubwe
1.1.4 … is responsible for marketing South Africa as tourist destination.
A
SATOUR
B
TGCSA
C
IDC
D
THETA
1.1.5 Activities relating individuals travelling and staying in places outside their usual
environment.
A
business
B
eco-tourism
C
tourism
D
tourist
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1.1.6 For an activity to be classified as part of tourism, the minimum length of stay
should be one…
A
year
B
month
C
day
D
week
1.1.7 Internet facilities needed by tourists are called… infrastructure.
A
building
B
energy
C
transport
D
communication
1.1.8 Tourists who visits museums and art galleries are classified as… tourists.
A
adventure
B
business
C
cultural
D
outbound
1.1.9 Tourism has the biggest effect on the … sector.
A
services
B
transport
C
production
D
manufacturing
1.1.10 Development in media technology is important for tourism as part of
the… infrastructure.
A
transport
B
communication
C
energy
D
basic services
(10x2)
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
COLUMN B
1.2.1 Outbound tourism
A. Visits a foreign country as a destination.
1.2.2 Cultural tourism
B. Ensure the quality assurance for accommodation and experience for visitors.
1.2.3 Indigenous knowledge
1.2.4 The tourism Grading
Council
1.2.5 Foreign tourists
C. Visiting a country to see sites of archaeological significance, such as the Cango
caves.
1.2.6 Paleo Tourism
D. The culture, history and environment
that are unique to a specific community.
1.2.7 South African Tourism
Profile
E. Day-to-day services needed to ensure
the smooth functioning of a country.
1.2.8 World Heritage Sites
F. The act of travellers visiting destinations
in order to experience and learn about a
particular traditional community.
1.2.9 International tourists
1.2.10 Basic services
G. South African citizens travelling abroad.
H. Visiting a country to enjoy the scenery of
the nature of a country.
I. Ritual, music, artwork of a local group.
J. Residents of a country who travel outside the borders.
K. Places listed by UNESCO as having
special cultural, historical, scientific, or
other significance.
L. Knowledge that tourists learn about the
places that they visit in a country
.
(10x1) (10)
1.3
Provide the economic term/concept for each of the following descriptions. Write only the term/concept next to the question number. No abbreviations, acronyms or examples will be accepted.
1.3.1 A place that is listed by UNESCO that has a special cultural or physical importance.
1.3.2 The basic systems and structures that country needs for economic activity,
for example transport and communication.
1.3.3 This kind of infrastructure ensures that tourists can reach their destination
safely, quickly, and easily.
1.3.4 Travel for the purpose of attending conferences, congress, exhibitions, and
trade fairs.
1.3.5 A grant Programme for training and support for tourism enterprises.
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1.3.6 A campaign aimed at making travel more accessible and affordable for all
South African.
1.3.7 Travelling by the residents of a country within their own country.
1.3.8 Local knowledge that is unique to a given culture.
1.3.9 The type of tourism where tourists come to South Africa to visit museums
and art galleries.
1.3.10 The activities of people travelling outside their usual environment for more
than a year.
1.3.11 Contribution of activities in this sector are unrecorded but add significantly
to tourism in South Africa.
1.3.12 Business Ventures that are funded by the government together with the private sector.
1.3.13 Tourists travelling through South Africa using air, road, rail, and sea
transport to get to another destination.
1.3.14 Tourists come to South Africa on holidays, to play sport, to visit friends, and
to see the tourist attractions.
1.3.15 South African citizens travelling within the borders of South Africa.
(15x1) (15)
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name,” you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1
2.2
2.3.
2.4
2.5
2.6.
2.7.
2.8
2.9
2.10
List any TWO policy suggestions for tourism.
(2 x 1) (2)
Name any TWO types of tourism.
(2x1) (2)
Name any TWO guidelines for levying taxes in tourism.
(2x1) (2)
Name any TWO approaches directing tourist’s spatial distribution (2x1) (2)
Name TWO criteria to measure tourism.
(2x1) (2)
Give TWO reasons why government levy tax on tourism.
(2x1) (2)
Name any TWO policy suggestions of tourism
(2x1) (2)
State any TWO ways in which households can benefit from tourism (2x1) (2)
Name any TWO world heritage sites for Tourism.
(2x1) (2)
Name TWO positive effects that tourism will have on our economy. (2×1) (2)
QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked.
3.1
3.2
3.3
Why is the tourism industry fragile?
(1 x 2) (2)
How does the depreciation of the rand affect United States tourists visiting
South Africa?
(1 x 2) (2)
How can tourism increase foreign exchange earnings?
(1x2) (2)
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3.4
3.5
3.6
3.7
3.8
3.9
3.10
How can local communities be involved in decision-making processes regarding
tourism development
(1x2) (2)
How can the economy be negatively affected by tourism?
(1x2) (2)
How can tourism help to alleviate poverty among the local people in
the community?
(1x2) (2)
How Can eco-tourism benefit the environment?
(1x2) (2)
What are the objectives of tourism?
(1x2) (2)
What is a tourism system?
(1x2) (2)
How does tourism contribute to the economy of South Africa?
(1x2) (2)
QUESTION 4: DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document.
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
2 Higher order questions are grounded in the content. These types
of questions test critical thinking, where candidates should be able
to apply their knowledge, through logical reasoning and also have an awareness of
their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as
higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 4.
Study the Extract below and answer the questions that follow.
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4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
Identify the sector that address skills shortages in tourism.
Which marginalised group will benefit from skills development?
Briefly describe the role of the department of tourism.
Why is training and development important to tourism industry.
Discuss reasons for the growth of the tourism industry.
MIDDLE ORDER PARAGRAPH
4.1.6 Briefly explain the benefits of tourism for the household.
4.1.7 Discuss employment as an effect of tourism
(1)
(1)
(2)
(2)
(4)
(4x2) (8)
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.1.8 Evaluate the effects of investments on tourism.
4.1.9 How can South Africa promote domestic tourism?
(8)
(8)
QUESTION 4.2:
4.2.
Study the table below and answer the questions that follow.
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
Which mode of transport is least used by foreign travellers?
Name any ONE purpose of tourism.
Briefly describe the term transit tourist.
Explain the environmental stress caused by tourism.
How does South Africa benefit from tourism?
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.2.6 Briefly describe the negative effects of tourism on the environment.
4.2.7 Discuss the economic benefits of tourism for infrastructure development.
(8)
(8)
HIGHER ORDER PARAGRAPH
4.2.8 Explain in detail the impact of tourism on poverty and employment.
4.2.9 Evaluate the benefits of taxation policies on tourism.
(8)
(8)
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QUESTION 4.3:
4.3
Study the extract below and answer the questions that follow.
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Name any ONE environmental world heritage site.
Identify the indigenous group which tourist have key interest in
Briefly describe the term paleo-tourism
Why are heritage sites important?
How do indigenous cultures contribute to tourism?
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 Briefly discuss the reason for growth in the tourism industry.
(4x2) (8)
4.3.7 Discuss how marketing as a policy can contribute to growth in tourism.
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.3.9 How can indigenous knowledge system (IKS) be used to increase tourism in SA?
(8)
4.3.10 Evaluate the benefits of taxation policies on tourism.
(8)
QUESTION 4.4
4.4.
Study the cartoon below and answer the questions that follow.
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4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
[Source: Internet Cartoon]
Name the type of tourism depicted in the above cartoon.
(1)
Which institution is responsible for marketing South Africa as a tourist
destination.
(1)
Give TWO examples of World Heritage Sites in South African.
(2x1) (2)
Briefly describe the term indigenous knowledge .
(1x2) (2)
How can the tourism sector help to reduce poverty among the local people
in the community.
(4)
MIDDLE ORDER PARAGRAPH
4.4.6 Discuss employment as an effect of tourism
(4x2) (8)
4.4.7 Discuss households and infrastructure development as a benefit of tourism.
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.4.8 How can tourist attraction in less popular destinations be marketed
successfully?
4.4.9 Why is investments in tourism important for the economy?
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(8)
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C are as follows:
MARK ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
•
A good starting point would be to define the main concept related to the
question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples.
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
•
A summary of what has been discussed without repeating facts already mentioned.
•
Any opinion or value judgement on the facts discussed.
•
Additional support information to strengthen the discussion/analysis.
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
●
●
Discuss in detail the effects of tourism on the South African Economy.
(26)
Evaluate the success of indigenous knowledge systems (IKS) in promoting
tourism in South Africa.
(10)
QUESTION 6
•
Examine the effects of tourism on the following:
• Poverty
• Employment
• Externalities
• How can South Africa promote domestic tourism?
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(26)
(10)
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QUESTION 7
●
●
Discuss the benefits of tourism for:
-Business (10)
-Infrastructure development (8)
-Households (8)
(26)
Evaluate the success of indigenous knowledge systems (IKS) in promoting
tourism in South Africa.
(10)
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TOPIC 14:
ENVIRONMENTAL SUSTAINABILITY
SECTION A: TYPICAL EXAM QUESTIONS
QUESTION 1:
Section A – Short Questions
HINT: When answering Section A – short question, it is important not to rush but to
read the questions carefully and to make sure you understand what the question is
asking. Always remember one alternative is completely wrong, one is nearly correct
and one is totally correct. It is easy to eliminate the completely wrong answer, but if
you do not read the question carefully the nearly correct answer will also appear correct. The answer will NEVER be two options. Only ONE option is correct. Your answer will immediately be marked incorrect if you write TWO options.
1.1.
Various options are provided as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question
number.
1.1.1. An example of the Renewable energy resource.
A Solar power
B Gold
C Oil
D Platinum
1.1.2 Finite resources are also known as ....resources
A Non renewable
B Renewable
C Non-depleted
D Limitless
1.1.3 The focus of Johannesburg Summit was on …
A Hazardous waste
B Pollution
C Sustainable development
D Deforestation
1.1.4 An example of products on which environmental tax is currently charged
A Car exhausts
B Sugar
C Radios
D Car tyres
1.1.5 The introduction of waste material into the environment is known as ….
A Sanitation
B By-products
C Pollution
D Recycling
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1.1.7 Meeting the needs of the present generation without compromising the needs of
he future generations
A Preservation
B Fracking
C Environmental sustainability
D Environmental development
1.1.7 Toxic chemical waste can result in a high ... rate in people
A environmental tax
B infertility
C pollution
D environmental change
1.1.8 The government can play a very important role in environmental sustainability
through its … policy
A monetary
B fiscal
C urbanisation
D international
1.1.9 The tax levied by the government on environmental polluters is known as ... tax
A Green
B Personal
C VAT
D Import
1.1.10 The variety of plant and animal life in a particular habitat is called …
A Deforestation.
B Biodiversity.
C Carbon footprint.
D Desert formation
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1.2
Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A-I) next to the question number (1.2.1 –1.2.10) in the
ANSWER BOOK.
COLUMN A
1.2.1 Erosion
1.2.2 Conservation
1.2.3 Hazardous waste
1.2.4 Basel Conversion
1.2.5 Marketable permits
1.2.6 Property right
COLUMN B
A. Waste that poses a significant threat to people and the environment at large.
B. Licences that are sold by the government to
business which allow them a certain quota of
pollution.
C. Permits that can be sold on a market to other
polluters.
1.2.8 Social benefit
D. Methods taken to ensure that certain non -renewable resources are not threatened with
extinction.
1.2.9 Fracking
1.2.10 Carbon footprint
E. Occurs when soil and rock are removed from
earth’s surface through wind and water.
1.2.7 Preservation
F. Laws that govern how can individuals benefit
from the transfer of resources from the state
to the individual party.
G. The sustainable use and management of natural resources to ensure that they are available for future generations.
H. An international agreement to manage nuclear waste.
I. Total amount of carbon emission caused by a
person, organisation, or country.
J. Benefit derived by the consumer and producer.
K. Liquid forced into the rocks deep underground to extract the gas or petroleum in
them.
L. Negotiated arrangement between two or
more parties and is usually legally binding.
M. Both private benefit and the external benefit
connected to a good or service.
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1.3
Provide the economic term/concept for each of the following descriptions. Write only the term/concept next to the question number. No abbreviations, acronyms or examples will be accepted.
1.3.1. Payment made by government to businesses to reduce activities that inflict
negative externalities on the environment.
1.3.2 A fund to help developing countries to establish cleaner sources of energy and to
adapt to climate change.
1.3.3 Resources that can be replaced or replenished.
1.3.4 The act of introducing toxic substances into the natural environment that damage
ecosystem.
1.3.5 Process whereby soil and rock are removed from earth’s surface through wind and
water and deposited elsewhere.
1.3.6 Permanent destruction of trees and forests.
1.3.7 Method that forces liquid into the rocks deep underground to extract the gas or petroleum.
1.3.8 Long term changes in normal weather patterns.
1.3.9 Total amount of carbon emissions caused by a person, organization or a country.
1.3.10 Continual increase in the earth’s average temperature.
1.3.11 Methods taken to ensure that certain non-renewable resources are not threatened
with extinction.
1.3.12 The ability of the environment to survive its use of economic activity by ensuring
that the needs of the present generation are met without compromising the needs
of the future generations.
1.3.13 Internal cost incurred by the business or consumer.
1.3.14 Earths shared natural resources and it is not owned by any country.
1.3.15 Knowledge that has practical application for the daily survival of local /traditional
communities.
SECTION B
QUESTION 2:
HINT: When the question requires you to “list” or “name”, you need not write a sentence but merely few words or a phrase. This MUST be done in bullet form. These
types of questions are applicable for 2.1.1, 3.1.1 and 4.1.1
2.1 List any two types of pollution
(2x1)
2.2 Give TWO examples of the preservation of the environment
(2x1)
2.3 Give TWO reasons for the loss of biodiversity.
(2x1)
2.4 Name TWO examples of renewable resources.
(2x1)
2.5 Name any TWO examples of items that can be recycled
(2x1)
2.6 Name any TWO sources of environmental-friendly energy.
(2x1)
2.7 State any TWO measures used by government to ensure environmental
sustainability
(2x1)
2.8 Give any TWO examples of hazardous waste affecting the environment.
(2x1)
2.9 Name any TWO millennium development goals that form part of international
agreements that ensure a sustainable environment.
(2x1)
2.10 Name any TWO international agreements on sustainable development
(2x1)
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2.11 Name any TWO kinds of environmentally friendly tourism.
(2x1)
2.12 Name TWO environmental problems that affect environmental sustainability (2x1)
2.13 Name TWO effects of air pollution on the environment?
(2x1)
2.14 Give any TWO examples of hazardous waste affecting the environment.
(2x1)
2.15 Name TWO ways in which air pollution affects the environment.
(2x1)
QUESTION 3:
HINT:
These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2.
Answers must be provided in full sentences; learners must ensure that
their answer addresses the question asked
3.1 How does air pollution affect the environment?
(2)
3.2 What effect does chemical pollution have on agricultural land in South Africa?
(2)
3.3 What is the main purpose of conservation?
(2)
3.4 Why does sustainable development seldom work in a free-market system? (2)
3.5 How can taxes be used to ensure environmental sustainability?
(2)
3.6 Why is the preservation of natural resources important?
(2)
3.7 How can education be used to ensure environmental sustainability in South Africa?
(2)
3.8 How can climate change influence agricultural production?
(2)
3.9 What is the purpose of green tax?
(2)
3.10 What effect will the overexploitation of land have on agricultural output in SA?
(2)
3.11 What is the effect of climate change on weather patterns?
(2)
3.12 How can people be educated to manage the environment in such a way that
sustainability is ensured?
(2)
3.13 What is the main purpose of preservation?
(2)
3.14 What effect will green taxes have on the production output of a business that
generates negative externality?
(2)
QUESTION 4: DATA RESPONSE & PARAGRAPH TYPE QUESTIONS
HINT: All section B questions have TWO data interpretation questions – each total
10 marks. Section B consist of Questions 2-4 not as numbered in this document
All section B questions have TWO paragraph questions, one Middle Order & ONE
Higher Order
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TYPICAL EXAM QUESTION: THESE HIGHER ORDER QUESTIONS REQUIRE
THE LEARNERS TO USE HER/ HIS CRITICAL THINIKING SKILLS.
Higher order questions are grounded in the content. These types of
questions test critical thinking, where candidates should be able to apply their
knowledge, through logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
QUESTION 4.1:
Study the following illustration and answer the questions that follow:
4.1.1
4.1.2
4.1.3
4.1.4
4.1.5
What type of pollution is shown in above cartoon ?
Name one cause of pollution on the above cartoon
Briefly describe the term conservation.
What possible effect would pollution have on the environment?
How is technology used as a measure to deal with pollution?
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.1.6 Explain why markets fail to protect the environment.
(4x2)(8)
4.1.7 Briefly explain charging for the use of the environment and levy environmental
taxes as measures to protect the environment
(4x2)(8)
HIGHER ORDER PARAGRAPH
4.1.8 Why is it difficult for the free market to ensure the environmental sustainability?
(8)
4.1.9 How does human activity negatively affect environmental sustainability? (8)
4.1.10 How does human activity negatively affect environmental sustainability?
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(8)
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QUESTION 4.2:
Study the following illustration and answer the questions that follow:
SOURCE: INDEPENDENT ASSOCIATION OF AMERICA
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
What is fracking according to the extract above?
(1)
Name any ONE non-renewable resource.
(1)
Name TWO economic benefits of fracking for the South African economy. (2)
How can we stop fracking?
(2)
What impact will fracking have on the environment.
(4)
MIDDLE ORDER PARAGRAPH
4.2.6 Explain why the Kyoto Protocol originally only applied to developed countries?
(4x2) (8)
4.2.7 Discuss the possible reasons for the increase in plastic waste over the past
decade.
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.2.8 Why have the international measures (agreements) been ineffective in reducing
the effects of climate change.
(8)
4.2.9 Why is South Africa regarded as a major air polluter in the world
(8)
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QUESTION 4.3
Study the following extract and answer the questions that follow:
ENVIRONMENTAL ISSUES ON OUR PLANET
Humans are linked to environmental landscapes within which our daily lives unfold. We
depend solely on nature for the stable climate, clean air, and food. Human activities have
made global warming and climate change a global threat, The rising sea level of Carbon
dioxide and other environmental gases have caused an increase in average global temperature from 26 degrees Celsius to 32 degrees Celsius. This has caused extreme
weather patterns and other negative changes such as pollution, deforestation, and loss of
biodiversity
Source: www.byjus.com
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
Identify environmental problems caused by air pollution.
What was the increase in average in the global temperature?
Briefly describe the term deforestation.
Explain the effect of climate change on the agricultural industry.
How can business reduce the level of environmental damage.
(1)
(1)
(2)
(2)
(4)
MIDDLE ORDER PARAGRAPH
4.3.6 What are the benefits of using technology in sustaining the environment?
(4x2) (8)
4.3.7 Briefly discuss the reasons why markets fail to ensure environmental
sustainability.
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.3.8 What role does South Africa play in alleviating the negative effects of global
warming?
(8)
4.3.9 How can the government promote the green economy in South Africa?
(8)
4.3.10 Why have the international measures (agreements) been ineffective in
reducing the effects of climate change?
(8)
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QUESTION 4.4:
Study the following illustration and answer the questions that follow:
4.4.1
4.4.2
4.4.3
4.4.4
4.4.5
What does COP stand for?
.
(1)
Where will / was COP 28 held?
(1)
Briefly describe the term climate change.
(2)
What is the effect of deforestation on the environment?
(2)
What practically can communities do to protect their immediate environment?
(2 x 2) (4)
MIDDLE ORDER PARAGRAPH
4.4.6 Discuss pollution in terms of environmental sustainability
4.4.7 Differentiate between Conservation and Preservation.
4.4.8 Discuss the effects of climate change on the environment.
(4x2) (8)
(4x2) (8)
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.4.9 How is the environment as a common resource responsible for market? (8)
4.4.10 Evaluate the success of the Earth Summit in addressing environmental
sustainability in Africa
(4x2) (8)
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QUESTION 4.5:
Study the information below and answer the questions that follow:
4.5.1 Which environmental problem is depicted above?
(1)
4.5.2 Identify the product from the picture that takes the longest time to decompose.
(1)
4.5.3 Briefly explain the term environmental sustainability.
(2)
4.5.4 Why must the above problem be solved?
(2)
4.5.5 What measures can be implemented to overcome the hazards of the problem
above?
(4)
MIDDLE ORDER PARAGRAPH
4.5.6 Explain the positive impact of carbon tax on the environment.
(4x2) (8)
4.5.7 Explain the governments use of subsidies and permits as measures to ensure
environmental sustainability.
(4x2) (8)
4.5.8 Discuss the effects of climate change in the environment.
(4x2) (8)
HIGHER ORDER PARAGRAPH
4.5.9 What are the benefits of using technology in sustaining the environment? (8)
4.5.10 What role does South Africa play in alleviating the negative effects of
global warming?
(8)
4.5.11 What effect does climate change have in the production of goods and services?
(8)
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SECTION C
HINT: All section C questions have TWO questions 5 & 6 NOT like in this document.
In the examination you will need to answer only one.
ESSAY STRUCTURE
HINT: Section C – the long question, must be answered in FOUR sections: Introduction
(definition), Body (headings and full sentences in bullets) additional part and conclusion
(summarising). The mark allocations for Section C is as follows:
MARK ALLOCATION
STRUCTURE OF ESSAY
Introduction
The introduction is a lower-order response.
•
A good starting point would be to define the main concept related to the
question topic.
•
Do not include any part of the question in your introduction.
•
Do not repeat any part of the introduction in the body.
•
Avoid mentioning in the introduction what you are going to discuss in the
body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw a graph and explain/Use the graph given and explain/Complete the given graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/ Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include:
•
A brief summary of what has been discussed without repeating facts already
mentioned
•
Any opinion or value judgement on the facts discussed
•
Additional support information to strengthen the discussion/analysis
•
A contradictory viewpoint with motivation, if required
•
Recommendations
TOTAL
Max. 2
Max. 26
Max. 10
Max. 2
40
QUESTION 5
• Discuss in detail government measures to ensure sustainable development.
(26)
• How does South Africa use a conservation to ensure a sustainable environment?
(10)
[40]
QUESTION 6
• Discuss the major environmental problems that affect countries globally (26)
• Evaluate the success the international measures adopted to address the environmental problems.
(10)
[40]
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