GAUTENG DEPARTMENT OF EDUCATION

SUBJECT: ECONOMICS

REMOTE LEARNING ACTIVITIES BOOK (RELAB)

GRADE 11

TERM 1

LEARNER ACTIVITIES

(Page 1 of 68 )

1|Page ECON GRD 11

 TABLE OF CONTENTS

TOPIC PAGE

1 FACTORS OF PRODUCTION 3 – 22

CIRCULAR FLOW AND QUANTITATIVE ELEMENTS

2 23 – 39
ECONOMIC GOODS AND SERVICES

3 40 – 53
ECONOMIC SYSTEMS

BASIC ECONOMIC PROBLEM, BUSINESS CYCLES

4 54 – 68
AND PUBLIC SECTOR; ECONOMIC STRUCTURE

2|Page ECON GRD 11

TOPIC 1 FACTORS OF PRODUCTION

FACTORS OF PRODUCTION

Analysis of the factors of

production and their
remuneration

Investigation of community
participation in local economic
planning and activities

Accessibility of the
economically
marginalised groups

3|Page ECON GRD 11

MACROECONOMICS

1. TOPIC 1: ECONOMICS – FACTORS OF PRODUCTION

INTRODUCTORY NOTES
• In macroeconomics we study the economy as whole.
• Economists represent the economy in the form of a circular flow model to show how the dif-
ferent participants (consumers, enterprises, the government and the foreign sector) in the
economy interact with one another.
• They all use scarce resources (factors of production) and try to solve the scarcity problem
(economic problem).
• It also studies aggregate (total) indicators such as the national income, national spending
and national production, total employment, general prices of goods and services and the
total money stock.

KEY CONCEPTS:

KEY CONCEPTS DESCRIPTIONS/DEFINITIONS

Factors of production Basic inputs that are used to produce goods and services.
Natural resources All means made available by nature to be used as inputs in
the production.
Renewable resources Resources that are replaced by natural processes such as
plants and animals
Non-renewable resources Resources that do not grow or develop as fast as they are
used such as minerals and fossil fuels.
Occupational mobility The movement of factors of production from one type of pro-
ductive activity to another type of productive activity
Geographical mobility The movement of factors of production from one location to
another location
Economic goods Resources that are scarce and that people are willing to pay
for.
Free goods Those natural resources that are freely available in nature.
Rent The payment for the owners of the natural resources for the
use of the natural resources in the production of goods and
services.
Labour Includes all the work done by people whether they are skilled
or unskilled and whether they provide physical or mental work.
Wages and salaries The basic amount, excluding any benefit or allowances that
are paid in return for the use of labour in production.
Nominal wage The amount that a worker receives each day, week or at the
end of the month.

4|Page ECON GRD 11

KEY CONCEPTS DESCRIPTIONS/DEFINITIONS
Real wage The amount of goods and services that a person can buy with
the nominal wage
Capital The money invested in machines and equipment that will be
used in the production process.
Capital formation An increase in a country’s stock of capital.
Interest The payment made for the use of capital in the process of pro-
duction.
Investment The creation of capital goods in the production of other goods
and services.
Capital widening Occurs when the capital stock is increased to
accommodate an increasing labour force.
Capital deepening Occurs when the amount of capital per worker is increased.
Entrepreneur The person who organises or employs natural resources, cap-
ital and labour into a profitable business to produce useful
goods and services
Entrepreneurship The process of bringing together natural resources, capital
and labour into a profitable business to produce useful goods
and services
In-service training Training that takes place while a person is already employed
and doing a job.
Profit The remuneration that an entrepreneur receives for taking the
risk to run a business
Break-even point The point at which expenses are equal to income
Gross profit The difference between sales and the cost of sales.
Depreciation The decrease in the monetary value of assets over time
Procurement The delivery of goods and services to the poor or to marginal-
ised groups
Procurement Policy It is part of the BEE Act and it concerns awarding government
tenders to firms which comply with the BEE Act.
Preferential Procurement Is used to create opportunities for the marginalised such as
black-owned and women-owned enterprises by giving them
preferences during the awarding of tenders.
Marginalised people People who are less able to find a job or to satisfy their needs.

Empowerment A management practice of sharing information, rewards, and

power with people so that they can take initiative and make
decisions to solve problems and improve service and perfor-
mance

5|Page ECON GRD 11

FACTORS OF PRODUCTION & THEIR REMUNERATIONS
The factors of production are the basic inputs that are used to produce goods and
services. There are essentially four factors of production – natural resources, labour, capital and entrepreneurship. Technological inven-
tions form part of capital. The characteristics, importance and remunerations of the four factors of production are
discussed below:

Natural Resources Labour Capital Entrepreneurship

All means made available Includes all the work The money invested in The process of bringing to-
by nature to be used as done by people whether machines and equip- gether natural resources,
inputs in the production they are skilled or un- ment that will be used in capital and labour into a
Definitions process. skilled and whether they the production process. profitable business to pro-
provide physical or men- duce useful goods and ser-
tal work. vices

• Resources are not • Labour cannot sepa- • Capital may be tangi- • They take initiatives
evenly distributed rated from the worker ble or intangible
• They organise production
• The supply is fixed/lim- • It cannot be stored or • Capital is consumed
• They are innovative & pre-
ited hoarded
• Capital increases pro- pared to take risks
• They are gifts of nature • It varies in quality and duction efficiency
• They have leadership and
quantity
• Resources can be re- • Capital is expensive management ability
Characteristics newable or non-renewa- • The supply cannot be
• Capital goods get worn • Combines the other factors
ble suddenly increased.
out/depreciate of production

6|Page ECON GRD 11

 Natural Resources Labour Capital Entrepreneurship
• They have to be trans- • Income as a goal
formed

• Serve as a source of • It is vital for economic • Makes mass produc- • Combines the other factors
food development tion possible of production
• Serve as inputs for pro- • The remuneration for la- • Improves the quality of • Ensuring competitiveness
duction of goods and ser- bour accounts for more products
• Encourage economic
vices than 50% of the GDP.
• Makes standardisation growth
Importance • Provide opportunities for • Labour is complemen- possible
• Create employment oppor-
international trade tary to other factors of
• Makes selling on credit tunities
production.
• Sustain economic activi- possible
• Create new wealth
ties
Remunerations Rent Wages/Salaries Interest Profit

7|Page ECON GRD 11

INVESTIGATION OF COMMUNITY PARTICIPATION IN LOCAL ECONOMIC PLANNING
AND ACTIVITIES:

One of the goals of a modern community is to establish local economies that are economically
viable, environmentally sound and socially responsible. Achieving this goal requires participa-
tion from all sectors of the community, both to determine community needs and to identify and
implement innovative and appropriate solutions.

As stated in the Constitution of the Republic of South Africa, the local government has
the following objectives:
• To provide democratic and accountable government for local communities;
• To ensure the provision of services to communities in a sustainable manner;
• To promote social and economic development;
• To promote a safe and healthy environment.
Participation:
• Guarantees that a felt need is involved.
• Ensures things are done the right way.
• Uses valuable indigenous knowledge.
• Frees people from dependence on others’ skills.
• Makes people more conscious of the causes of their poverty and what they can do about it.

ACCESSIBILITY OF THE ECONOMICALLY MARGINALISED GROUPS

Marginalisation is the process whereby something or someone is pushed to the edge of a

group and accorded lesser importance.

Marginalisation can also be defined as those processes by which individuals and groups are
ignored or relegated to the side lines of political debate, social negotiation, and economic bar-
gaining and kept there.

Conditions that should prevail as to be categorised in the economically marginalised

groups of South Africa:

• Racial and gender discrimination

• Physical and mentally handicapped persons
• People from rural areas as well as school leavers
• Refugees and most poor people with language and education barriers.

8|Page ECON GRD 11

Marginal groups consist of people who do not form part of, or who are excluded from, the eco-
nomic mainstream.
• These people often do not have a job, housing, education opportunities or access to medical
and other facilities.
• Examples will be the elderly, school-leaving youths, refugees, the disabled and the poor.

How does the government intervene as to improve the situation of economically margin-
alised groups?

• Through empowerment and procurement.

• Empowerment gives somebody the power or authority to access resources and opportuni-
ties.
• Procurement is the acquisition (purchase) of goods and/or services.

The following are some of the strategies that the government implement to address socio-eco-
nomic inequality and alleviate the difficulties of economically marginalised groups;

The Expanded Public Works:

• Programme is the largest job-creating initiative undertaken.
The National Youth Agency:
• Aims to help people between the ages of 16 and 25 who want to continue their education by
providing them with part-time jobs.
• Entrepreneurship grants and skills development through 27 SETA’s
The Broad Based Black Economic Empowerment Policy:
• Provides a basis for transforming the South African economy to eradicate inequality.
Human Resource Development Strategy:
• Was implemented to reduce the levels of poverty, unemployment and inequality.
The Integrated Sustainable Rural Development Strategy:
• Is designed to realise a vision that will “attain socially cohesive and stable rural communities
with viable institutions, sustainable economies and universal access to social amenities, able
to attract and retain skilled and knowledgeable people, who are equipped to contribute to
growth and development.
Anti-poverty initiates and programmes:
Such as a well-developed social grants system and better service delivery to the poor.

9|Page ECON GRD 11

QUESTIONS

SECTION A: TYPICAL EXAM QUESTIONS

FACTORS OF PRODUCTION

QUESTION 1: Section A – Short Questions

: 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 cor-
rect. The answer will NEVER be two options. Only ONE option is correct. Your an-
swer 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 Factors of production are:

A inputs into the production process.
B weather, social, political conditions that affect, production.
C the physical relationships between economic inputs and outputs.
D the ownership of the factors of production is not important for households.

1.1.2 The remuneration or payment made for the use of factors of production which
are limited in supply is called …
A economic rent.
B rent.
C commercial rent.
D interest.

1.1.3 Resources are called ... in the production process.

A inputs
B outputs
C intermediate goods
D final goods

1.1.4 The supply of land is …

A. elastic
B. inelastic
C. mobile
D. sufficient

10 | P a g e ECON GRD 11
1.1.5 Fauna and Flora are examples of……..resources.
A renewable
B non-renewable
C fixed
D limited

1.1.6 The ... combines all other factors of production to produce goods and
services to satisfy the needs of the consumers.

A labourer
B entrepreneur
C government
D minister

1.1.7 The South African labour force is characterised by ...

A skilled labour.
B unskilled labour.
C highly skilled labour.
D unemployed labour

1.1.8 Factory buildings are examples of … capital.

A floating
B working
C fixed
D variable

1.1.9 The amount that a resource could earn from its next best use is known to as …
A economic rent
B transfer earnings.
C economic profit.
D commercial profit

1.1.10 The most important asset of a country is its … resources.

A capital
B human
C natural
D free

1.1.11 The greatest threat to workers’ health in South Africa is …

A pneumonia.
B tuberculosis.
C HIV and Aids.
D low wages.

1.1.12 Purchasing from BEE-qualifying businesses, small businesses and

black owned businesses is known as….
A ownership.
B preferential procurement.
C management.
D empowerment.
(12 x 2) (24)

11 | P a g e ECON GRD 11
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 – 1.2.11) in the
ANSWER BOOK.

COLUMN A COLUMN B

1.2.1 Goods and A The process whereby something or someone is pushed

services to the edge of a group and accorded lesser importance,
this is predominantly a social phenomenon by which a
minority or sub-group is excluded, and their needs or
desires ignored.
1.2.2 Factors of
B is made possible by the availability of natural
production
resources.
C dividing the process of production into distinct and
1.2.3 Land
several component processes and assigning each
component in the hands of a labourer or a set of
labourers, who are specialists in that particular
process.
Economic activity D The quantity of labour depends on the size of the
1.2.4
population and the proportion of the population that is
able and willing to work.
E All man-made physical assets like plant and machinery,
1.2.5 economic rent
tools, buildings, roads, dams and communication, etc.,
are the various forms of physical capital.
F Refer to those goods and services which help in the
1.2.6 economically
production process.
active population
1.2.7 Division of G Any and all particular geographical locations, mineral
Labour deposits, forests, water, arable land, sun-shine, fish
stocks, atmospheric quality etc.
H They cannot be produced without any human
1.2.8 Physical capital
Input.
1.2.9 wages and I. The remuneration received from the sale of a factor of
salaries production which is scarce.
K. The investment that is made in the form of money or
1.2.10 money capital
monetary instruments is called.
L The remuneration received for the supply of labour by
1.2.11 Marginalisation
households.

(11 x 1) (11)

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
will be accepted.

1.3.1 The driving force behind production in a market economy.

12 | P a g e ECON GRD 11
1.3.2 Gross profit plus all other income minus all expenses the business had to pay to keep
it running.
1.3.3 The society’s understanding of the best ways to produce goods and
services.
1.3.4 Accumulation of more and more physical capital.
1.3.5 The amount that a worker receives each day, week or at the end of
the month.
1.3.6 The decrease in the monetary value of assets over time.
1.3.7 They have the ability to recognise new business opportunities, invent new methods
of production, successfully establish new markets and initiate growth by providing new
job opportunities.
1.3.8 The resources that are scarce and that people are willing to pay for.
1.3.9 Training that takes place while a person is already employed and doing a job.
1.3.10 Those processes by which individuals and groups are ignored or relegated to the side
lines of political debate, social negotiation, and economic bargaining and kept there.
1.3.11 The payment for the owners of natural resources for the use of the natural resources
in the production of goods and services.
(11 x 1) (11)

SECTION B

SECTION B: TYPICAL EXAM QUESTIONS

QUESTION 2:

: 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 List any TWO examples of non-renewable resources. (2 x 1) (2)

2.2 Name any two main economic activities in modern society (2 x 1) (2)
2.3 Name any TWO broad categories of labour (2 x 1) (2)
2.4 Name TWO examples of capital goods. (2 x 1) (2)
2.5 Name TWO factors which must be present to enable a country to make use of its
natural resources. (2 x 1) (2)
2.6 Name any TWO components of capital (2 x 1) (2)
2.7 Name TWO factors that influence the labour force participation rate (2 x 1) (2)
2.8 List any TWO forces that determine interest rates. (2 x 1) (2)
2.9 Name any TWO strategies that the government implement to address socio-economic
inequality. (2 x 1) (2)
2.10 Name TWO factors that influence the labour force participation rate. (2 x 1) (2)

13 | P a g e ECON GRD 11
QUESTION 3:

: These types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2. An-
swers must be provided in full sentences

3.1 Why is the supply of land fixed? (1 x 2) (2)

3.2 Why is it important for government to use the procurement system? (1 x 2) (2)
3.3 What will happen to the rent on land that is situated far from the market, if the
government builds a railway line to connect the farmer to the market? (1 x 2) (2)
3.4 What do we mean when we say that labour is heterogeneous? (1 x 2) (2)
3.5 Why is the quality of labour more important than the quantity of labour? (1 x 2) (2)
3.6 Since natural resources are scarce, what would be your suggestion as to how they
should be used? (1 x 2) (2)
3.7 Why is it that land and labour are referred to as primary factors of production
(1 x 2) (2)
3.8 How does the government use procurement to distribute wealth? (1 x 2) (2)
3.9 How does a high level of education influence the ability of an individual
to get employed? (1 x 2) (2)
3.10 What effect will HIV/Aids have on supply of labour? (1 x 2) (2)
3.11 What impact does the Expanded Public Works Programme have on your
local community? (1 x 2) (2)
3.12 How effective is local government in promoting the role of community participation?
(1 x 2) (2)

14 | P a g e ECON GRD 11
DATA RESPONSE

: All section B questions have TWO data interpretation questions – each to-
tal 10 marks. Section B consist of Questions 2-4 not as numbered in this document

QUESTION 4

4.1 Study the cartoon below and answer the questions that follow

4.1.1 What is depicted by the cartoon above? (1)

4.1.2 Which factor above requires the willingness and ability to combine the other
three factors for production to take place? (1)
4.1.3 Describe the term entrepreneur. (2)
4.1.4 How does the market reward an entrepreneur and punish an entrepreneur? (2)
4.1.5 Why do we need entrepreneurs in the economy of South Africa? (2 x 2) (4)
[10]

4.2 Study the information below and answer the questions that follow.

15 | P a g e ECON GRD 11
4.2.1 What factor of production is represented in the above extract? (1)
4.2.2 Who is the current Minister of Water and Sanitation? (1)
4.2.3 Describe the term natural resources. (2)
4.2.4 What was the aim of the 2016 Water Week? (2)
4.2.5 What is the impact of scarcity on renewable and non-renewable resources? (2 x 2) (4)
[10]
4.3 Study the graph below and answer the questions that follow.

16 | P a g e ECON GRD 11
4.3.1 List ONE factor that influence rent (1)
4.3.2 What do we call the rent charged for the exploitation of mines? (1)
4.3.3 Briefly describe the term economic rent. (2)
4.3.4 Explain why the supply of land is fixed. (2)
4.3.5 Calculate the economic rent according to the graph? (4)
[10]
4.4 Study the image given below and answer the questions that follow.

4.4.1 According to the above image, what is the demand of the workers? (1)
4.4.2 Mention any ONE characteristics of labour (1)
4.4.3 Describe the term labour. (2)
4.4.4 What is the difference between nominal wages and real wages? (2)
4.4.5 How can the productivity of labour be improved? (2 x 2) (4)
17 | P a g e ECON GRD 11
             [10]

4.5 Study the table below and answer the questions that follow.2015

[Source: Statistics South Africa]

4.5.1 Which institution is responsible to publish the information depicted on the table
above? (1)
4.5.2 In which year was employment at its highest? (1)
4.5.3 What trend do you observe in the working age population from the table? (2)
4.5.4 Explain the term Not Economically Active (2)
4.5.5 Calculate the unemployment rate for 2011 (Show ALL calculations). (2 x 2) (4)

[10]

4.6 Study the graph below and answer the questions that follow.

4.6.1 Identify the market equilibrium for labour in the graph. (1)

18 | P a g e ECON GRD 11
4.6.2 According to the above graph, how are wages determined in the labour
market? (1)
4.6.3 Briefly describe the term labour? (2)
4.6.4 Explain how HIV and AIDS affect the quality of labour. (2)
4.6.5 How does the national development plan propose to increase employment and
economic growth? (2 X 2) (4)
[10]

4.7 Study the illustration below and answer the questions that follow.

4.7.1 Classify the type of labour that is performed by person B. (1)

4.7.2 Under which of the categories above (A, B or C) would you classify the bulk of
South Africa’s labour force? (1)

4.7.3 Describe the term specialisation of labour. (2)

4.7.4 Briefly explain any ONE characteristic of labour. (2)
4.7.5 Why would you regard labour as an important factor of production? (2 x 2) (4)
[10]

: All section B questions have TWO 8 marks questions, numbered according

to questions not like in this document.

QUESTION 5 Paragraph type questions – Middle Cognitive

TYPICAL EXAM QUESTIONS

19 | P a g e ECON GRD 11
 : All section B questions have TWO 8 marks questions, numbered according
to questions not like in this document.

5.1 Briefly explain the availability and use of factors of production as methods of growing the
economy. (8)

5.2 Discuss the economic significance of land? (8)

5.3 Differentiate between ‘capital widening’ and ‘capital deepening’ as importance of

capital. (8)

5.4 Briefly explain any TWO factors that influence the profit of an entrepreneur. (8)

5.5 Explain uneven distribution and the fixed supply as characteristics of natural
resources. (8)

5.6 Discuss FOUR characteristics of capital. (8)

5.7 Discuss the entrepreneur as a creator of employment and ensuring competition. (8)

QUESTION 6 Paragraph type questions – Higher cognitive

TYPICAL EXAM QUESTIONS

6.1 Why is capital formation important to the South African economy? (8)

6.2 Why is it difficult to change the real capital? (8)

6.3 How do the natural resources enrich our lives? (8)

6.4 How can community participation impact on the entrepreneur? (8)

6.5 Analyse the government's effort to assist the economically marginalised groups in
South Africa. (8)

6.6 How successful has the government been in creating opportunities for previously
disadvantaged individuals through empowerment? (8)

20 | P a g e ECON GRD 11
SECTION C Higher cognitive level

TYPICAL EXAM QUESTIONS

: All section C questions have TWO questions 5 & 6 NOT like in this docu-
ment. In the examination you will need to answer only one.

ESSAY STRUCTURE

: 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 ALLO-
STRUCTURE OF ESSAY:
CATION:
Introduction Max 2
The introduction is a lower-order response.
• A good starting point would be to 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 saying in the introduction what you are going to discuss in the
body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Critically Max 26
discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Explain/ Evaluate
Additional part: Give own opinion/ Critically discuss/ Evaluate/ Critically
evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Interpret/
Briefly debate/ How/ Suggest Max 10
Conclusion
Any Higher or conclusion include: Max 2
• A brief summary of what has been discussed without repeating facts
already mentioned in the body
• 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 7
• Discuss in detail the characteristics of capital. (26)
• Examine the positive effects of capital deepening. (10)

21 | P a g e ECON GRD 11
QUESTION 8
• Discuss the economic importance of entrepreneurship. (26)
• Critically evaluate how the South African government promotes entrepreneurship (10)

QUESTION 9

• Discuss the characteristics of labour. (26)

• Draw a graph that shows a fixed supply of land and briefly explain how an increase in
demand will have an effect on rent. (10)

QUESTION 10
• Discuss land as one of the four factors of production with special reference to:
- Characteristics
- Economic significance
- Remuneration. (26)
• Examine how the government can use empowerment as a strategy that the government
implement to address socio-economic inequality and alleviate the difficulties of
economically marginalised groups. (10)

22 | P a g e ECON GRD 11
TOPIC 2: CIRCULAR FLOW AND QUANTITATIVE
ELEMENTS ECONOMIC GOODS AND SERVICES

INTRODUCTORY NOTES

A circular flow model is a model that shows how participants (households, businesses,
government and foreign sector) in an economy interact. Our model equation is therefore:
C + G + I + (X – M).
Now each of the components on our equation are going to be discussed in depth for
clearer understanding.

23 | P a g e
KEY CONCEPTS

KEY CONCEPTS DESCRIPTIONS/DEFINITIONS

Intermediate goods Goods that are not directly consumed but that are used to
manufacture other goods
Final goods and services All manufactured goods that are ready to satisfy the con-
sumers’ needs and wants
Economic goods Resources that are scarce and that people are willing to pay
for.
Free goods Those natural resources which are freely available in na-
ture.
Gross domestic product Total value of final output of goods and services produced
within the borders of a country in a year.
Gross National product Total value of final output of goods and services produced
by the permanent residents of a country in a year.
Gross fixed capital for- Takes place when there is an increase in the country’s capi-
mation tal stock.
Gross Value Added The value added by each firm during the production pro-
cess.
Market price The current price at which a good or service may be bought
or sold
Basic price The price of a good or service minus subsidies
Factor cost The total cost of all the factors of production consumed or
used in producing of a good or service
Tax on products Any tax that is levied per unit of the good or service and in-
cludes VAT, import duties, taxes on imports & exports etc.
Tax on production Any tax on production not linked to a specific good or ser-
vices and includes payroll taxes, business licenses, and
taxes on land and buildings etc.
Subsidies on products These are direct subsidies that are made per unit of the
good or services and are linked to a specific product e.g.
government subsidy on bread
Subsidies on production These are subsidies that are not linked to a specific goods
or services e.g. subsidy made on employment.
Residual item Refers to errors and omissions incurred in the calculation of
GDP
Inventory The merchandise, raw materials, finished and unfinished
products which have not yet been sold
Transfer payments Payments made by the government to people who have not
used their factors of production to produce output such as
welfare grants.
Semi-durable goods Goods that can be used repeatedly or continuously over a
period longer than a year their expected lifetime of use,
though longer than a year, is often significantly shorter and
that its purchasers’ price is substantially less
GDP at Factor cost: Money value of the cost of employment, entrepreneurship
and the depreciation of capital in South Africa, without
counting Government’s role in it

24 | P a g e ECON GRD 11
DEFINITION OF FINAL CONSUMPTION EXPENDITURE (C)

Consumption expenditure (spending) is the amount of money spent by households in

an economy.

The spending includes durables, such as washing machines, semi-durables and non-
durables, such as food. in other words, it is the purchasing of goods and services by
individual households.

it is the largest part of aggregate demand at the macroeconomic level.

The total spending of all households on consumer goods and services is called total or
aggregate consumption expenditure, or simply total consumption

There are two components of consumption in the basic model: induced consumption
(which is affected by the level of income) and autonomous consumption (which is not.
in other words, it is expenditure that occurs when income levels are zero).

Autonomous consumption contrasts with induced consumption, in that it does not

systematically fluctuate with income, whereas induced consumption does.

The two are related, for all households, through the consumption function:
• C = c0 + c1 yd where
• C is total consumption,
• C0 is autonomous consumption (c0 > 0),
• C1 is the marginal propensity to consume
• YD is disposable income.

Household final consumption expenditure includes the following components:

• households' purchases of durable goods
• households' purchases of non-durable goods
• households' purchase of semi-durable goods
• households’ expenditure on services rendered to them

CONSUMPTION EXPENDITURE BY GOVERNMENT (G)

The primary function of government is to establish the framework within which the
economy operates. Government also participates in the circular flow of production, in-
come and spending. it purchases factors of production (primarily labour) from households
on the factor market and also purchases goods and services from firms on the product
(goods) market. In return, government provides households and firms with public goods
and services such as defence, law and order, education, health services, roads and
much more. this spending by government is usually denoted by the symbol G

25 | P a g e ECON GRD 11
Composition / Classification of Government Spending

Economic affairs
• Economic infrastructure and network regulation
• Industrial development, trade and innovation
• Employment, labour affairs and social security funds

Debt service costs

General public services
• General public administration and fiscal affairs
• Executive and legislative organs
• Home affairs
• External affairs and foreign aid.

Education
• Basic education
• University transfers
• Skills development and adult education
• Education administration
• National student financial aid scheme.

Health
• District health services
• Provincial hospital services
• Other health services
• Central hospital services
• Facilities management and maintenance

Local development and social infrastructure

• Municipal equitable share and infrastructure grant
• Human settlements, water and electrification programmes
• Public transport
• Other local development and social infrastructure
• Rural development and land reform

Social protection
• Old-age grant
• Child support grant
• Disability grant
• Provincial social development
• Other grants
• Policy oversight and grant administration.

26 | P a g e ECON GRD 11
IMPORTANCE OF GOVERNMENT SPENDING (G):
Government expenditure plays an important role in determining the changes in the
level of national income; providing the right needs for potential output and sustaining the
welfare of the economy.
the circular flow of income helps identify the key relationship of government expendi-
ture towards household and domestic firms, which is when income rises, spending
rises, and when spending rises, output rises which [then again] gives rises to incomes -
providing growth in national income.

Households, firms, and foreign sectors (on exports) pay taxes with their incomes,
which generate overall revenue for government expenditure.

FLOW OF INCOME

Figure 1.1 Circular flow diagram

IMPORTANCE OF GOVERNMENT SPENDING

Government spending is autonomous, and therefore will spend regardless of the size of
revenue, emphasising potential leakages in the circular flow of income and the changing
pace of economic growth. For example, tax revenues do not equal government spending
in public goods. Some revenue may be set aside for savings or used to pay back bonds
to reduce national debt.

This presents a leakage in the circular flow, as incomes generated do not finance current
goods and services. Furthermore, taxes reduce the disposable incomes in households
and profit in firms presenting a withdrawal (leakage)in the flow.

When leakages are greater than injections, the national output will fall to a new

27 | P a g e ECON GRD 11
equilibrium, as there will be less income circulating and change the pace of economic
growth.
On the other hand, when government injections rise, national output will move to a new
equilibrium. Therefore, injections must equal leakages for an economy to be in equilib-
rium, emphasising the different positions of equilibrium growth and the varying conditions

COMPOSITION OF THE CIRCULAR FLOW

Intermediate goods are goods that are not directly consumed but that are used to man-
ufacture other goods.
Final goods are all manufactured goods that are ready to satisfy the consumers’ needs
and wants.
Final consumption expenditure by households is the total spending of all households
on final goods and services for a specific period usually one year.
Consumption expenditure by government is the amount spent on goods and services
to meet the needs and wants of as many people as possible in a country.
Gross fixed capital formation refers to goods that are bought by firms and government
to produce other goods and services.

Gross Domestic Product

The GDP is the total value of final goods and services produced within a country in a cer-
tain period of time, which is usually a year.

The national accounts are useful for:

• Indicating the economic activity within a country
• Measuring economic growth from one year to the next
• Determining the standard of living in a country
• Comparing prosperity levels among the country

GDE - Gross Domestic Expenditure

GDE is the total expenditure of all sectors of an economy of a country on final goods
and services produced in that country.

Consumers and the government spend money on Consumer goods and services.
Firms and the government spend money on capital goods. The formula for calculating
GDE is GDE = C + I + G.

C = represents consumer expenditure

I = represent investments (spending by businesses)
G= represents government spending

28 | P a g e ECON GRD 11
Gross National Product (GNP)

Gross National Product (GNP) is the total market value of the final output of the factors of
production owned by the citizens of a country irrespective of where they are located for a
certain period of time (usually a year).

Conversion of GDP figures to GNI figures:

GDP at market prices

Plus: Factor income earned abroad by South Afri-
cans
Less: Factor income earned in South Africa by
foreigners
= GNI at market prices

Theoretically, national production, national expenditure and national income should all be
equal. This allows GPD to be calculated by using any of the following methods:

Income Method/GDP (I):

This method calculated GDP using the total income received by the owners of the factors
of production that were used to produce products. GDP (I) = W + R + I + P

W = represents wages and salaries

R = represents rent income
I = represents interests
P = represents Profits

Expenditure Method/ GDP (E): uses the amount of money domestic businesses receive
for their production to calculate the value of final output. The expenditure method uses
the following formula to calculate GDP:
GDP (E) = C + I + G + (X – M)

C = represents consumer expenditure

I = investments (spending by businesses)
G= represents government spending
X = represents exports (spending by people in other countries on local products)
M = represents imports (spending by the local people on foreign products)

Take note: M must be subtracted as these finals goods and services or output was pro-
duced in a foreign country and can therefore not be added to local GDP.

Production Method/ GDP (P): This method calculates GDP by adding the value of the
final goods and services produced in each sector of the economy (primary, secondary
and tertiary).

It is also known as the value added method or GVA (Gross Value Added) as the value
of a product while being produced has to be added at each stage of the production pro-
cess until the final product is reached.

29 | P a g e ECON GRD 11
 EXPENDITURE METHOD PRODUCTION METHOD INCOME METHOD
consumption expenditure value added by the pri- compensation to employ-
by households (c) mary sector ees
gross capital formation (i) value added by the sec- consumption of fixed capi-
ondary sector tal
consumption expenditure value added by the tertiary operating surpluses
by general government (g) sector
Gross domestic ex- GDP at basic prices GDP at factor cost
penditure
plus: exports (x) plus: taxes on products plus: taxes on production
less: imports (m) less: subsidies on prod- less: subsidies on produc-
ucts tion
Expenditure on gdp at Gross domestic product GDP at basic prices
market prices at market prices
plus: taxes on products
less: subsidies on prod-
ucts
Gross Domestic Product
at market
plus: primary income from
the rest of the world
less: primary income to
the rest of the world
Gross National Income
at market prices

QUESTIONS

SECTION A: TYPICAL EXAM QUESTIONS

QUESTION 1: Section A – Short Questions

: 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 cor-
rect. The answer will NEVER be two options. Only ONE option is correct. Your an-
swer will immediately be marked incorrect if you write TWO options.

30 | P a g e ECON GRD 11
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 num-
ber.

1.1.1 The total value of remuneration that the owners of factors of production receive
for their share in the production process fora specific period of time:
A GDP
B GNI
C GNP
D GNE

1.1.2 Double counting is a problem that occurs when the … method of calculating GDP
is used.
A production
B income
C expenditure
D domestic

1.1.3 Consumption of fixed capital means …

A depreciation
B gross salaries and wages
C investment
D capital

1.1.4 … includes all possible errors that could have been made in the calculation of the
expenditure items.
A constant prices
B gross capital formation
C residual items
D market prices

1.1.5 An alternative concept for gross value added is gross …

A national product
B domestic product
C national income
D national expenditure

1.1.6 Spending on education and housing by the government is classified under the …
division of government expenditure.
A functional
B administrative
C financial
D classification

31 | P a g e ECON GRD 11
1.1.7 Double counting is a problem that occurs when the … method of calculating GDP
is used.
A production
B income
C expenditure
D domestic

1.1.8 To convert basic prices to market prices, taxes on products must be …

A deducted.
B multiplied.
C added.
D divided

1.1.10 In South Africa’s national accounts final consumption expenditure refers to

expenditure by…
A tourists
B households
C business
D foreigner (10 x 2) (20)

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 – 1.2.8) in the
ANSWER BOOK.

CONCEPT DESCRIPTION
1.2.1 Gross value added A Takes the form of social security such as
at basic prices pensions and disability grants.
1.2.2 Capital deepening B Takes place when firms build up their stock of
finished products
1.2.3 Transfer payments C Expenditure which is not affected by level of income
1.2.4 Durable goods D Goods and services whose provision has
benefits for the user and society
1.2.5 Autonomous con- E The flow of goods and services between the
sumption participants in the circular flow
1.2.6 Inventory invest- F The total market value of all final goods and ser-
ment vices produced between the borders of a country over a
specific period of time.
1.2.7 Merit goods G Goods that derive their name from the fact that they
last in value for a relatively long
1.2.8 Gross Domestic H Transfer payments by the state to support the el-
Product derly
1.2.9 Old age-pensions I Increases at a rate of increase of the work force.
1.2.10 Real flow J GDP at basic prices, plus taxes on products, minus
subsidies on products.
K The total domestic and foreign income claimed by
citizens of a country

(10 x 1) (10)

32 | P a g e ECON GRD 11
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
will be accepted.

1.3.1 Counting the contribution of a factor of production more than once.

1.3.2 Total market value of all final goods and services produced by the permanent
citizens of a country for a specific period.
1.3.3 A method whereby we determine the GDP at market prices by adding the
spending of the four main sectors.
1.3.4 Total market value of all final goods and services produced within the borders of a
country for a specific period which took into consideration the effects of price
changes/inflation.
1.3.5 Goods which can be consumed only once and they cease to exist after being
used.
1.3.6 Cannot be used to measure real economic growth due to the effect of inflation.
1.3.7 subsidies that are linked to specific goods or services e.g. government subsidy on
bread.
1.3.8 The total market value of all final goods and services produced within the borders
of a country over a specific period of time.
1.3.9 The services sector of an economy.
1.3.10 Goods which can be used more than once but they last for a shorter period of time
e.g. clothing.
1.3.11 Takes place when firms build up their stock of finished products.
1.3.12 Compulsory payments made by private individuals or businesses to the
government sector with no direct benefit.
1.3.13 subsidies that are not linked to specific goods or services e.g. subsidy made on
employment.
1.3.14 Taxes that are linked to specific goods or services.
(14 x 1) (14)

SECTION B

QUESTION 2:

: 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 Name TWO economic participants that are responsible for gross fixed capital
formation. (2 x 1) (2)

2.2 List TWO main economic sectors when calculating GDP (P). (2 x 1) (2)

2.3 Name any TWO participants in a closed economy. (2 x 1) (2)

2.4 Name any TWO examples of taxes on products. (2 x 1) (2)

33 | P a g e ECON GRD 11
2.5 Name any two main categories of final consumption expenditure by government.
(2 x 1) (2)

2.6 List any TWO main economic activities in modern society (2 x 1) (2)

2.7 Name any TWO methods of calculating GDP. (2 x 1) (2)

2.8 List any TWO economic leakages (2 x 1) (2)

2.9 Name TWO types of assets into which Gross fixed capital investment is broken
into. (2 x 1) (2)

QUESTION 3:

: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2. Answers
must be provided in full sentences

3.1 Why do national accountants use the value-added method to calculate GDP?
(1 x 2) (2)
3.2 Why is the households the ones who get paid for land, labour, capital and
entrepreneurship and not government or firms? (1 x 2) (2)
3.2 What happens to household spending on final goods and services during an
economic recession? (1 x 2) (2)
3.3 Why is the gross domestic product of South Africa always greater than the gross
national product? (1 x 2) (2)
3.4 Why do National accountants convert Nominal GDP to GDP at constant prices?
(1 x 2) (2)
3.6 Why is the spending of households on final goods and services important?
(1 x 2) (2)
3.7 Why are capital goods regarded as final goods? (1 x 2) (2)
3.8 Why are imports not included in domestic expenditure? (1 x 2) (2)
3.9 Why is fixed capital formation important? (1 x 2) (2)
3.10 Explain how consumption stimulates employment. (1 x 2) (2)

DATA RESPONSE

: All section B questions have TWO data interpretation questions – each to-
tal 10 marks. Section B consist of Questions 2-4 not as numbered in this document

QUESTION 4

4.1 Study the table below and answer the questions that follow.

34 | P a g e ECON GRD 11
4.1.1 Give an example of a primary income from the rest of the world. (1)
4.1.2 Do we add a subsidy to the basic prices or subtract it? (1)
4.1.3 Briefly describe the concept Gross Domestic Product. (2)
4.1.4 Explain the difference between current prices and constant prices. (2)
4.1.5 Calculate the value of A in the table. (Show all calculations) (4)

4.2 Study the table below and answer the questions that follow:

Consumption expenditure
Item Amount (000)
Consumption expenditure by households 150 000

Government expenditure 130 000

Gross capital formation 80 000
Gross domestic expenditure 360 000
Exports on goods and services 45 000
Imports on goods and services 65 000
GDP at market prices A

4.2.1 What method of calculating the GDP is depicted by the table above? (1)
4.2.2 Name any other method that can be used to calculate the GDP at market
prices (1)
4.2.3 Briefly describe the term Gross domestic expenditure. (2)
4.2.4 Explain the following components: GDE = C+ G+ I (2)
4.2.5 Calculate the GDP at market prices (A). Show all calculations (4)

4.3 Study the table below and answer the questions that follow

4.3.1 Identify ONE major participant in the circular flow. (1)

4.3.2 Give ONE examples of non-durable goods. (1)

35 | P a g e ECON GRD 11
4.3.3 Describe the term consumption expenditure by households. (2)
4.3.4 What do you think determines the final consumption expenditure of
households? (2)
4.3.5 With reference to the table above, analyse South African households spending
from 2014 to 2015? (2 x 2) (4)

4.4 Study the table below and answer the questions that follow.

4.4.1 Which publication would carry this information? (1)

4.4.2 Complete the item represented by A in the table. (1)
4.4.3 Describe the term Gross Domestic Product. (2)
4.4.4 What is the purpose of the residual item? (2)
4.4.5 Calculate expenditure on GDP at market prices (B). (4)

4.5 Study the following cartoon and answer the questions that follow.

4.5.1 What economic message is conveyed in the above cartoon? (1)

4.5.2 What would indicate that social services are not delivered efficiently? (1)

36 | P a g e ECON GRD 11
4.5.3 Briefly describe the term national budget. (2)
4.5.4 Explain how consumers spend their income in the national economy? (2)
4.5.5 How can corruption be eliminated? (2 x 2) (4)

4.6 Study the table below and answer the questions that follow.

4.6.1 Name the other classification of consumption expenditure by government. (1)

4.6.2 What does compensation of employees consist of? (1)
4.6.3 Briefly describe the term final consumption expenditure by government. (2)
4.6.4 Explain the importance of final consumption expenditure by households. (2)
4.6.5 How can the South African government achieve the reductions estimated in the ta-
ble above? (2 x 2) (4)

4.7 Study the table below and answer the questions that follow.

NATIONAL PRODUCTION ACCOUNTS OF SOUTH AFRICA

GROSS VALUE ADDED BY KIND (GVA at current

(GVA at con-
OF ECONOMIC ACTIVITY prices) stant 2010
prices)
2019 (Rm) 2019 (Rm)
Primary Sector 472 062 295 203
Secondary Sector 943 771 552 601
Tertiary Sector 3 107 747 2 017 745
Gross value added at basic prices 4 523 580 2 865 548
Source: SARB September 2020 Quarterly Bulletin

4.7.1 Identify the base year used by SARB above. (1)

4.7.2 Which sector above contributed the most towards the GDP of South Africa? (1)
4.7.3 Briefly explain the term gross value added at basic prices. (2)
4.7.4 Why are GVA figures at constant prices lower than GVA figures at current
prices? (2)
4.7.5 How will an increase in taxes on products affect the economy? (2 x 2) (4)

37 | P a g e ECON GRD 11
4.8 Study the table and answer the questions that follow

4.8.1 Name the government expenditure classification used in the above table. (1)
4.8.2 Indicate the service in which the government allocates most of the resources. (1)
4.8.3 Briefly describe the concept final consumption expenditure by the government. (2)
4.8.4 Why does government spend more on education? (2)
4.8.5 Calculate the total health expenditure in the above table. Show all calculations. (4)

4.9 Study the table below and answer the questions that follow.

National income accounts of South Africa at current prices

2019
Compensation of employees 2 418 544
Net operating surplus 1 296 696
Consumption of fixed capital 713 078
A 4 428 317
Other taxes on production 105 061
Other subsidies on production 9 798
Gross value added at basic prices 4 523 580
Taxes on products 564 866
Subsidies on products 10 821
Gross domestic product at market prices 5 077 625

Source: SARB September 2020 Quarterly Bulletin

4.9.1 Provide the missing term for A. (1)

4.9.2 Name ONE example of taxes on production. (1)
4.9.3 What does the term gross domestic product entail? (2)
4.9.4 What is the advantage of subsidies on production to the businesses? (2)
4.9.5 Calculate net operating surplus as a percentage of GDP. Show ALL calculations.
(4)

38 | P a g e ECON GRD 11
QUESTION 5 Paragraph type questions – Middle Cognitive

: All section B questions have TWO 8 marks questions, numbered according

to questions not like in this document.

5.1. Briefly discuss classification of final consumption expenditure by households. (8)

5.2 Differentiate between durable and non-durable goods. (8)
5.3 Distinguish between taxes on products and taxes on production. (8)
5.4 Differentiate between Gross Domestic Product (GDP) and Gross National Product
(GNP) as main aggregates in the economy. (8)
5.5 Briefly explain final consumption expenditure by government. (8)
5.6 Explain the difference between final goods and intermediate goods. (8)
5.7 Tabulate the differences between capital (intermediate) and consumer goods. (8)

QUESTION 6 Paragraph type questions – Higher cognitive

TYPICAL EXAM QUESTIONS

6.1 Why are capital goods and services important for producers of goods and
services? (8)
6.2 How can the final consumption expenditure by government improve the standard
of living? (8)
6.3 How will an increase in investment spending influence the economy? (8)
6.4 Why does the government charge taxes? (8)
6.5 How does the South African government use progressive taxes to address
economic equity through its national budget? (8)
6.6 Analyse consumption expenditure by the South African households during the
2020 lockdown. (8)

39 | P a g e ECON GRD 11
TOPIC 3 ECONOMIC SYSTEMS

ECONOMIC SYSTEMS

FREE MARKET ECONOMY

CENTRALLY PLANNED ECONOMY

MIXED ECONOMY

EFFICIENCY IN DELIVERING SOCIO-ECONOMIC SERVICES

3 ECONOMIC SYSTEMS

INTRODUCTORY NOTES

Economics is the science of making choice under conditions of scarcity. What are the
basic issues about which choices are to be made? Any society must make choices about
three important problems. They are:
❖ What to produce and in what quantities? Food or weapons; if so, in what quanti-
ties? Is it more food and less weapons or vice versa?
❖ How shall goods be produced? Electricity from thermal power or from hydro
power?
❖ For whom shall the goods be produced? A few rich and many poor or most people
in modest comfort?

Market, centrally planned and SA’s mixed economy

40 | P a g e ECON GRD 11
 KEY CONCEPTS DESCRIPTIONS/DEFINITIONS
Economic systems The methods used by countries to allocate their resources.
Socio-economic Relating to society and the economy
Centrally planned An economic system in which the factors of production are
economy viewed as communal property
Mixed economic sys- An economic system that combines the advantages of both eco-
tem nomic systems
Market economy/cap- The economy that uses supply and demand to answer the ques-
italism tions of what, how and for whom to produce goods and ser-
vices/It is a market system whereby production factors are pri-
vately owned.
Market failure When the output produced is not available in the required quan-
tity or quality to maximise the satisfaction of the people of the
country.
Black market A market that develops for a good in short supply, at a higher
than normal price.
Privatisation The transfer of ownership of a business from the state to the pri-
vate sector.
Nationalisation The transfer of ownership of a business from the private sector
to the state.
Public sector Is made up of state – run activities or business.
National budget The planned income and expenditure by the state for a given
year.
Inflation A persistent increase in the general level of prices.
Exchange rate The price of one currency, in terms of another currency.
Subsidies Incomes given by the state to individuals or businesses for a
specific purpose.
Social services Government services provide for the benefit of the community,
such as education, medical care, and housing.
Social protection Consists of policies and programs designed to reduce poverty
and vulnerability by promoting efficient labour markets, diminish-
ing people’s exposure to risks, and enhancing their capacity to
manage economic and social risks, such as unemployment, ex-
clusion, sickness, disability and old age.
Public order and A department which has the primary goal of protecting the public
safety and keeping them safe.
Economic services An economic activity where an immaterial exchange of value oc-
curs, e.g. when a service like labour is performed, the buyer
does not take exclusive ownership of that which is purchased,
unless agreed upon by buyer and seller.

An economic system refers to how the different economic elements will solve the
central problems of an economy: what, how and for whom to produce.

It is important to remember that the Market Economy and Centrally planned economic
systems do not exist in the real life but only as a theoretical concept. All countries use a
mixture of the Market Economic system and Centrally Planned Economic system.

41 | P a g e ECON GRD 11
Definition: An economic system is the way that goods and services are produced and
resources distributed. In essences, it is the method that a country uses its resources to
satisfy the needs and wants of the population.

The most general economic systems are:

• The market economy.
• Centrally planned economy
• Mixed economy

Market economy:
• An economic system in which economic decisions and the pricing of goods and ser-
vices are guided solely by the aggregate interactions of a country's citizens and busi-
nesses and there is little government intervention or central planning.
• The Market Economic system is also known as Market Capitalism or the Free Market
System.

Economic characteristics of a market economy:

• Individuals have the right to buy and own property.
• Profit is the only motive for the functioning of capitalism.
• Producers have the freedom to decide.
• Market forces like demand, supply and price are the signals to direct the system.
• As most of the basic economic problems are expected to be solved by market forces,
the government has minimal role in the economy.

Advantages of the market economy:

• Producers increases the productivity to meet his own self-interest.
• Welfare is maximised
• Operates automatically through the price mechanism.
• The State has a minimum role to play.
• Have full freedom and therefore it leads to production of quality products at low costs
and prices.
• Technological improvement

Disadvantages of the market economy:

• Capitalism creates extreme inequalities in income and wealth.
• Inequality leads to monopoly
• There is over-production of goods due to heavy competition.
• Capitalism encourages mechanisation and automation.
• Under capitalism, private enterprises produce luxury goods which give higher profits
and ignore the basic goods required which give less profit.
• Stringent labour laws are enacted for the exclusive profit-motive of capitalists.
• The economic questions of what should be produced, how it should be produced and
who it should be produced for are all answered through the market forces of demand
and supply.

Centrally planned economy:

• An economic system in which economic decisions are made by the state or govern-
ment rather than by the interaction between consumers and businesses.

Economic characteristics of a centrally planned economy:

• Economies, social or collective welfare will be the prime motive.

42 | P a g e ECON GRD 11
• The right to private property is limited.
• Most of the economic policy decisions will be taken by a centralized planning authority.

Advantages of the centrally planned economy:

• The resources are utilized efficiently to produce socially useful goods without taking
the profit margin into account.
• Economy is free from business fluctuations.
• All citizens work for the welfare of the State.
• The elements of corporation and monopoly are eliminated since there is absence of
private ownership.
• In socialist economies, basic human needs like water, education, health, social secu-
rity, etc., are provided.
• As social welfare is the ultimate goal, there is no concentration of wealth.
• A socialist economy is operated under a centralized command and control system.
• There is no freedom of occupation.
• Work is monotonous and no freedom is given.
• Absence of competition makes the system inefficient.

Mixed Economic System

• The Mixed Economic system is a mixture of the Market Economic system and Cen-
trally Planned Economic system. It aims to combine the advantages of each system
into one economic system: state intervention insures equality while private business
allow for higher economic growth rates and economic efficiencies.

Economic characteristics of a mixed economy:

• In a mixed economy, both the public and the private sectors initiatives will be there
• As seen above, both capitalism and socialism have merits and demerits, mixed econ-
omy is expected to retain only the merits of the two systems.
• Planning will direct the relative roles of public and private sectors and their respective
jurisdictions.

Advantages of a mixed economy:

• The resources are utilized efficiently as good features of both capitalism and socialism
coexist.
• In the case of goods which are scarce, the prices are administered by the government
and such goods are also rationed.
• In a mixed economy, planning is centralized and there is overall welfare.

Disadvantages of a mixed economy:

• The coordination between the public and private sectors is poor in a mixed economy.
• There is too much of red-tape and corruption leading to delays in decision-making and
project implementation.
• The mixed economies experience economic fluctuations.
• All economies around the world use the Mixed Economic system. However, some
economies have stronger traits of the Market economic system (such as the USA and
South Africa) while other economies have stronger traits of a Centrally Planned Econ-
omy (such as North Korea and Cuba).

Efficiency in delivering socio-economic services

• In terms of its structure, South African local government is sub-divided into three basic
categories; metropolitan municipalities, district municipalities and local municipalities.

43 | P a g e ECON GRD 11
• The district municipalities are divided into a total of 234 local municipalities. In general,
a local municipality includes one or more towns and the surrounding villages and rural
areas.
• A local municipality exercises all the municipal functions not carried out by the district
municipality within which it lies. Local municipalities' councils are elected in the same
way as those of metropolitan municipalities: half from wards and half by proportional
representation.

Social services

• One of the main duties of the state in a mixed economy is to provide social services to
improve welfare especially for the marginalised.
• Socio-economic services are mainly supplied by the government in an attempt to uplift
previously disadvantaged communities.
• The government also has to make sure that the economy can operate efficiently.

Some of the examples of social services are:

• Education and training
• Health care
• Housing and community amenities
• Social protection (welfare services & social grants)
• Public order and safety

Economic services
• Economic services are associated with regulating and operating the economy and the
business sector more efficiently.
• Some of the government functions are:
• Using monetary and fiscal policies to ensure economic stability.
Maintaining economic order by ensuring free competition, positive international trade
relations and properly regulated labour relations legislation.
Providing and maintaining infrastructure.

QUESTIONS

SECTION A: TYPICAL EXAM QUESTIONS

ECONOMIC SYSTEMS

QUESTION 1: Section A – Short Questions

: 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

44 | P a g e ECON GRD 11
 you do not read the question carefully the nearly correct answer will also appear cor-
rect. The answer will NEVER be two options. Only ONE option is correct. Your an-
swer 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 num-
ber.

1.1.1 An economic system is a way of answering the following basic economic

questions.
A what, how and where?
B what, how and for whom?
C where, how and for whom?
D where, what, and how?

1.1.2 … is an economic system in which economic decisions are solely made by

market forces of demand and supply.
A market economy
B centrally planned economic system
C mixed economy
D capitalist economy

1.1.3 Decision-making within the market economy is…

A concentrated
B decentralised
C autocratic
D centralised

1.1.4 South Africa's PAYE taxation system is …

A proportional.
B progressive.
C regressive.
D constant

1.1.5 An advantage of the centrally controlled economy is …

A choice.
B innovation.
C risk.
D full employment.

1.1.6 In South Africa ,SABC, ESKOM and SAA are known as:
A corporates
B enterprises
C parastatals
D entities

45 | P a g e ECON GRD 11
1.1.7 There is less poverty among the people in communist countries because……
A the profit motive leads to self-interest
B there is full employment
C the government plays a very small role in the economy
D there is a shortage of consumer goods

1.1.8 A mixed economy is one that consists of …

A large and small firms.
B farms and factories.
C goods and services.
D public and a private sector.

1.1.9 An economic system where individuals are free to perform activities according to
their abilities is known as a …
A mixed economic system.
B market economy.
C centrally planned system.
D socialist system.

1.1.10 The economy failed in countries that applied central planning because
A there was a lack of incentive to work hard
B of a shortage of consumer goods
C there was full employment
D the state owned all the resources
(10 x 2) (20)

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 – 1.2.8) in the
ANSWER BOOK.

COLUMN A COLUMN B
1.2.1 Capitalism A The process of creating new technologies and us-
ing them in the economy.
1.2.2 Social services
B Individuals are free to perform their
1.2.3 Centrally planned professions, trade without state intervention
economy
C Excessive bureaucracy or adherence to
1.2.4 Economic systems official rules and formalities

1.2.5 Economic freedom D The flagship of the South African

government to relief poverty
1.2.6 Mixed economy
E Methods used by countries to allocate their
1.2.7 Dual economy resources

1.2.8 Red tape F The government owns all the factors of

productions
1.2.9 Innovation
G It includes education, health, social security
1.2.10 Social grants and welfare, housing and community

46 | P a g e ECON GRD 11
 services include protection, sanitation and
1.2.11 Economic freedom water

1.2.12 Bureaucracy H Means of production are controlled by

private owners

I Resolves basic economic problems through

market forces

J The existence of two different economic

sectors within one country, divided by different
levels of development, technology and differ
ent patterns of demand

K An economic system that features

characteristics of both market economy and
centrally planned economy

L The government buying assets which are

owned by the private sector.

M Systems and procedures which are designed

to maintain uniformity and control within an organ-
ization.

(12 x 1) (12)

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
will be accepted.

1.3.1 Excessive complicated administration procedures.

1.3.2 They work on the assumption that market forces of supply and demand, are
the best determinants of what is right for a nation's well-being.
1.3.3 A business enterprise where the government or state has significant control
through full, majority, or significant minority ownership.
1.3.4 A way of determining how the different elements will solve the central
problems of an economy.
1.3.5 Consist of policies and programs designed to reduce poverty and
vulnerability by promoting efficient labour markets diminishing people’s
exposure to risk.
1.3.6 The government introduced this new macroeconomic strategy in 1996.
1.3.7 An economic system that combines the advantages of a centrally planned
and a free market economy
1.3.8 Motivation or reward offered for increased productivity.
1.3.9 economic system where all economic decisions are made by the
government.
1.1.10 A focus on the needs or desires of one's self. (10 x 1) (10)

47 | P a g e ECON GRD 11
SECTION B

QUESTION 2

: 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 Name any TWO characteristics of a command (centrally planned) economic

system. (2 x 1) (2)
2.2 List any TWO state owned enterprises in South Africa. (2 x 1) (2)
2.3 Mention any TWO levels of government. (2 x 1) (2)
2.4 Name any TWO examples of social services which are provided by the South
African government. (2 x 1) (2)
2.5 List any TWO disadvantages of market economy. (2 x 1) (2)
2.6 List TWO types of economic systems. (2 x 1) (2)

QUESTION 3

: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2. Answers
must be provided in full sentences

3.1 Why is South Africa regarded as a mixed economy? (1 x 2) (2)

3.2 How is the government funding its expenditure? (1 x 2) (2)
3.3 Why do you think the RDP policy was not successful? (1 x 2) (2)
3.4 Why might the businessman or woman be happier in a free market system?
(1 x 2) (2)
3.5 Why might the poor be happier in a command system? (1 x 2) (2)
3.6 How does the market economy solve the central problem in an economy?
(2 x 1) (2)
3.7 What ensures flexibility in a market economy? (2 x 1) (2)

SECTION B

QUESTION 4

: All section B questions have TWO data interpretation questions – each to-
tal 10 marks. Section B consist of Questions 2-4 not as numbered in this document

48 | P a g e ECON GRD 11
DATA RESPONSE

4.1 Study the cartoon below and answer the questions that follow.

4.1.1 Which economic system is based on the principle of ‘invisible hand’? (1)
4.1.2 Who allocates the resources in the system above? (1)
4.1.3 Briefly describe the term economic system. (2)
4.1.4 Explain ONE advantage of the economic system depicted in the data above. (2)

4.1.5 How is self- interest beneficial for an economy? (2 X 2) (4)

4.2 Study the extract below and answer the questions that follow:

If there is no shop in a rural area, the state will tell one of the inhabitants to
start a spaza shop. By doing this, the state will decide what, how, and when
to produce in order to uplift the society.

4.2.1 What type of economic system is referred to in the above extract? (1)
4.2.2 Who allocates the resources in the above extract? (1)
4.2.3 Briefly describe the term economic system. (2)
4.2.4 Explain how service delivery can be improved in South Africa. (2)
4.2.5 Why is South Africa regarded as a mixed economy? (2 x 2) (4)

49 | P a g e ECON GRD 11
4.3 Study the cartoon below and answer the questions that follow:

4.3.1 What message is depicted in the above picture? (1)

4.3.2 What motivates consumers and producers in a pure market economy? (1)
4.3.3 Briefly describe the term free market economy. (2)
4.3.4 How does the market economy benefit the society? (2)
4.3.5 Why would you not recommend capitalism as an economic system? (2 x 2) (4)

4.4 Study the cartoon below and answer the questions that follow.

4.4.1 Which type of economic system does South Africa use? (1)
4.4.2 Who allocates the resources in the above economic system? (1)
4.4.3 Briefly explain the term mixed economic system. (2)
4.4.4 What role is played by the government in this mixed economic system? (2)
4.4.5 How efficient is the South African government at delivering social services?
(2 x 2) (4)

50 | P a g e ECON GRD 11
4.5 Study the information and answer the questions that follow

4.5.1 Identify a country using the above-mentioned economic system. (1)

4.5.2 List ONE advantage of a free market economy. (1)
4.5.3 Briefly explain the term capitalism. (2)
4.5.4 How is the market economy “self-regulating”? Motivate. (2)
4.5.5 Why is capitalism not beneficial to all countries and consumers? (2 x 2) (4)

QUESTION 5 Paragraph type questions – Middle Cognitive

: All section B questions have TWO 8 marks questions, numbered according

to questions not like in this document.

5.1 Outline arguments for privatisation. (8)

5.2 Discuss arguments for nationalisation. (8)
5.3 Briefly explain the advantages of a market economy. (8)
5.4 Discuss the disadvantages of a mixed economy. (8)
5.5 Compare the ownership and motivation of centrally planned and mixed as
economic characteristic in a tabular form. (8)
5.6 Tabulate the advantages of a market economy and a centrally planned economy.
(8)
5.7 Discuss social welfare and resource utilisation as advantages of a mixed
economy. (8)
5.8 Discuss the characteristics of a mixed economic system. (8)

51 | P a g e ECON GRD 11
QUESTION 6 Paragraph type questions – Higher cognitive

TYPICAL EXAM QUESTIONS

6.1 Why is South Africa regarded as a mixed economy? (8)

6.2 How can the South African economy benefit from a mixed economic
system? (8)

6.3 How effective is the delivery of social services in South Africa? (8)

6.4 Evaluate South African government’s involvement in increasing access to

economic opportunities. (8)
6.5 How efficient is the state in addressing the disadvantages of the market
system? (8)

SECTION C

TYPICAL EXAM QUESTIONS

ESSAY STRUCTURE

: All section C questions have TWO questions 5 & 6 NOT like in this docu-
ment. In the examination you will need to answer only one.

HINT: Section C – the long question, must be answered in FOUR sections: Introduc-
tion (definition), Body (headings and full sentences in bullets) additional part and
conclusion (summarising). The mark allocations for Section C is as follows:
MARK ALLO-
STRUCTURE OF ESSAY:
CATION:
Introduction Max 2
The introduction is a lower-order response.
• A good starting point would be to 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 saying in the introduction what you are going to discuss
in the body
Body:
Max 26

52 | P a g e ECON GRD 11
 Main part: Discuss in detail/ In-depth discussion/ Examine/ Criti-
cally discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Ex-
plain/ Evaluate Max 10
Additional part: Give own opinion/ Critically discuss/ Evaluate/ Crit-
ically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish /
Interpret/ Briefly debate/ How/ Suggest
Conclusion
Any Higher or conclusion include: Max 2
• A brief summary of what has been discussed without repeat-
ing facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discus-
sion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL 40

QUESTION 7

• Discuss South Africa's mixed economic system in terms of:

- Characteristics
- advantages and
- disadvantages (26 marks)

• Evaluate the government's efficiency in delivery social services to local

communities. (10 marks)
[40]

QUESTION 8

•Discuss a centrally planned economic system, with special reference to:

- economic characteristics,
- advantages and
- disadvantages (26)
 Analyse how South Africa’s dual economy and corruption are contributing factors
to the non-attainment of the state goals. (10 marks)
[40]
QUESTION 9

• Discuss the market economy with special reference to:

- Characteristics
- Advantages
- Disadvantages (26)
• Evaluate the efficiency of the state in addressing the disadvantages of the market
system. (10)
[40]

53 | P a g e ECON GRD 11
TOPIC 4 BASIC ECONOMIC PROBLEM, BUSINESS CYCLES
AND PUBLIC SECTOR; ECONOMIC STRUCTURE

BASIC ECONOMIC PROBLEM, BUSINESS

CYCLES AND PUBLIC SECTOR; ECONOMIC
STRUCTURE

THE PRIMARY SECTOR

THE SECONDARY SECTOR
THE TERTIARY SECTOR

SOUTH AFRICAS'S INFRASTRUCTURE

COMMUNICATION
TRANSPORT
ENERGY
EXCLUSION AND DISCRIMINATION IN
SERVICE PROVISION

54 | P a g e ECON GRD 11
ECONOMIC STRUCTURES

• The modern economy can be divided into three sectors that reflect the economic devel-
opment of that society.
• This lesson will discuss and explore the interaction between the primary, secondary
and tertiary sectors of the modern economy.

KEY CONCEPTS

KEY CONCEPTS DESCRIPTIONS/DEFINITIONS

Primary sector All the activities based on raw materials that come from the
earth such as farming, mining, forestry and fishing.
Secondary sector The manufacturing sector which includes manufacturing,
electricity, gas and water production.
Tertiary sector The sector that produces services such as transportation, ac-
commodation, retailers etc.
Exploitative operations Collection of raw materials that cannot be returned to nature
what is taken from it such as mining and fishing.
Genetic operations Collection of raw materials that can be returned to nature
what is taken from it such as farming and forestry.
Affirmative action All the measures taken by businesses to ensure that suitably
qualified employees from formerly disadvantaged groups
have equally employment opportunities at all levels of the
work force.
Communication The ways in which information is moved through the world.
Structure of the economy/ The way in which GDP is divided between the three economic
Economic structure sectors
Economic infrastructure The internal facilities that make business activity possible
such as communication, transportation and distribution net-
works, financial institutions and energy supply systems.

55 | P a g e ECON GRD 11
 Definition Composition Importance Exclusion and dis-
crimination
Primary sector:
• Refers to all the activities • Faring/ • Provides raw ma- • The Land Act of
based on raw materials Agriculture terials and fuels 1913 forbid the sale
that come from the earth • Fishing • Creates employ- of land outside the
• Forestry ment & provides ‘reserves’ or home-
• Mining training lands to blacks.
• Contribute to eco- • Black farmers in the
nomic reserves/homelands
growth/GDP were excluded from
• Earns foreign ex- generous financial
change. support that white
• Provides food farmers enjoyed
• Provide revenue from government
to the state in the • After 1948 blacks
form of taxes, were not allowed to
engage in mining as
owners.
Secondary sector:
• Is concerned with the • Manufacturing • Contribution to • Black people were
middle stages in the pro- • Electricity, gas GDP subjected to notori-
duction of final goods. It & water • Produces con- ous Bantu educa-
is also referred to as the • Construction sumer goods tion, which rendered
processing sector • • Creates employ- even successful
ment & provides learners vulnerable
skills and training to competition in the
• Earns foreign ex- workplace.
change • Capital is required
• Increases self-suf- to enter the second-
ficiency ary sector success-
fully.
• The exclusion of
blacks from occupa-
tion that earns high
incomes left little
opportunities for
them that could pro-
duce wealth and
capital.

56 | P a g e ECON GRD 11
 Definition Composition Importance Exclusion and dis-
crimination
Tertiary sector
• The sector that produces • Wholesale & • Contribution to • The general rule
services. retail trade, ca- GDP/economic that blacks might
tering & ac- growth not own or occupy
commodation • Creates employ- property in any area
• Transport, ment & provides rather than specifi-
storage & com- and training cally set aside for
munication • Creates markets the group rendered
• Financial inter- • Contribution to ex- businesses and pro-
mediation, in- ports fessional opportuni-
surance, real • Backwards and ties out of their
estate & busi- forward linkage reach.
ness service • Even in the urban
• Community, townships, individu-
social & per- als & businesses
sonal services were limited.

QUESTIONS

SECTION A: TYPICAL EXAM QUESTIONS

ECONOMIC STRUCTURES

QUESTION 1 Section A – Short Questions

: 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 cor-
rect. The answer will NEVER be two options. Only ONE option is correct. Your an-
swer 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.

57 | P a g e ECON GRD 11
1.1.1 Food security renders … a vital industry.
A agriculture
B water
C energy
D retail

1.1.2 … consist(s) mainly of private sector business enterprises e.g. cars, components,
machinery and tools.

A Manufacturing
B Construction
C Agriculture
D Wholesale and retail trade

1.1.3 In South Africa SABC, ESKOM and SAA are known as …

A Corporates
B Enterprises
C Parastatals
D Private sector

1.1.4 In the early 1900, the South African economy was dominated by the …

A Primary sector
B Secondary sector
C Tertiary sector
D Primary and tertiary sectors

1.1.5 Most of the electricity supply in South Africa is derived from …

A Nuclear energy
B Hydroelectric power
C Coal generated energy
D Wind energy

1.1.6 The secondary sector includes …

A mining
B fisheries
C farming
D manufacturing

1.1.7 Exploitative industries are part of the ……

A secondary sector
B primary sector
C services sector
D tertiary sector

1.1.8 11 In South Africa, mining is the responsibility of the Department of …

A Public Works.
B Environmental.
C Mineral Resources.
D Energy.

58 | P a g e ECON GRD 11
1.1.9 1.1.10 Eskom generates electricity in South Africa by mainly using ...
A water.
B wind.
C coal.
D solar

1.1.10 SANRAL is responsible for maintaining the ……. in SA

A harbours
B railway network
C airports
D national roads

1.2 Choose a description from COLUMN B that matches the item in COLUMN
A. Write only the correct letter (A−I) next to the question number(1.2.1−1.2.8)
in the ANSWER BOOK.

COLUMN A COLUMN B
1.2.1 Primary sector A provides services such as transport and communi-
cation
1.2.2 Social services B involves the sale of goods or services directly to
the end-user.
1.2.3 Tertiary sector C issues broadcasting licenses.
D regulate the energy industry in
1.2.4 Eskom accordance with government laws, policies, standards
and international best practices in support of sustaina-
ble development.
E aims to unify critical Infrastructure and key re-
1.2.5 Wholesale source protection efforts across the country.
1.2.6 The Independent F South African electricity public utility
Communications Authority
of South Africa
1.2.7 National infrastruc- G those who sell products to businesses or other out-
ture protection plan lets who are not the end-user.
1.2.8 NERSA H are involved in the extraction of raw materials from
nature.
I are provided by the state e.g. education, health and
welfare.

(8 x 1) (8)
1.3 Give ONE term of each of the following descriptions. Write only the term/
concept next to the question number (1.3.1–1.3.6) in the ANSWER
BOOK. NO abbreviations or acronyms will be accepted.

1.3.1 The transmission of information by various types of technologies over wire, radio,
optical or other electromagnetic systems.

1.3.2 The long-distance transportation of a liquid or gas through a system of pipes.

1.3.3 The sector’ activities result in in wood being made into furniture, steel being made
into cars or textiles being made into clothes.

59 | P a g e ECON GRD 11
1.3.4 The internal facilities that make business activity possible e.g. communication,
transportation.

1.3.5 This policy aims to address the availability, accessibility and affordability of
broadband; the building of an information society; and promoting the uptake and
usage of broadband.

1.3.6 The sector that contributes the most to the GDP in South Africa and creates many
jobs.
(6 x 1) (6)

SECTION B

SECTION B: TYPICAL EXAM QUESTIONS

QUESTION 2

: 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 Name TWO kinds of primary sector activities. (2 x 1) (2)

2.2 Name any TWO component of communication infrastructure. (2 x 1) (2)

2.3 Name any TWO components of the secondary sector. (2 x 1) (2)

2.4 Name any TWO of South Africa’s four licensed mobile operators. (2 x 1) (2)

2.5 List TWO components of the secondary sector. (2 x 1) (2)

2.6 Name TWO types of workers found in the secondary sector. (2 x 1) (2)

2.7 Name any TWO commercial ports in South Africa. (2 x 1) (2)

2.8 List TWO types of transport modes found in South Africa. (2 x 1) (2)

60 | P a g e ECON GRD 11
QUESTION 3

: This types of questions are applicable for 2.1.2, 3.1.2 and 4.1.2. Answers
must be provided in full sentences

3.1 Why is the primary sector important to the South African economy? (1 x 2) (2)
3.2 How important is an efficient infrastructure for the economy? (1 x 2) (2)
3.3 Why is Eskom working on a renewable energy programme that involves
independent power producers? (1 x 2) (2)
3.4 How can the primary sector contribute to the country’s economic growth?
(1 x 2) (2)

3.5 How does construction differ from manufacturing? (1 x 2) (2)

3.6 How would poor infrastructure at sea ports affect the South African economy?
(1 x 2) (2)

QUESTION 4

: All section B questions have TWO data interpretation questions – each to-
tal 10 marks. Section B consist of Questions 2-4 not as numbered in this document

DATA RESPONSE

4.1 Study the picture below and answer the questions that follow.

61 | P a g e ECON GRD 11
 Transport infrastructure

South Africa’s air and rail networks are the largest on the continent. The
country has an extensive rail network – the 14th longest in the world
connecting with networks in the sub-Saharan region. The country’s rail
infrastructure, which connects the ports with the rest of South Africa,
represents about 80% of Africa’s total.

4.1.1 Name any transport system used in South Africa in the above diagram. (1)

4.1.2 Which Agency maintains national and toll roads in South Africa? (1)

4.1.3 Explain the reason for government investing money in public transport. (2)

4.1.4 Why did the government introduce the Bus Rapid Transport (BRT) in South
Africa? (2)

4.1.5 What is the positive impact of the Taxi Recapitalisation programme? (2 x 2) (4)

62 | P a g e ECON GRD 11
4.2 Study the extract below and answer the questions that follow

4.2.1 Name any ONE component of communication infrastructure. (1)

4.2.2 When does the South African fiscal year start? (1)
4.2.3 Briefly describe the term infrastructure. (2)
4.2.4 Explain the importance of communication infrastructure to businesses. (2)
4.2.5 How will the R100 billion long term investment affect the economy? (2 x 2) (4)

63 | P a g e ECON GRD 11
4.3 Study the information below and answer the questions that follow.

SOUTH AFRICA HAS A HIGHLY DEVELOPED INFRASTRUCTURE

Eskom, one of the world’s top energy providers in terms of output, exports power to
other African countries. Electricity in South Africa comes from coal, water and nuclear
power. In 2008, Eskom implemented a mass electrification programme to upgrade and
expand the county’s electricity infrastructure.
[Source:
www.eskom.co.za

4.3.1 Name the national provider of electricity in South Africa. (1)

4.3.2 Mention ONE source of energy in South Africa. (1)
4.3.3 What is the role of NERSA? (2)
4.3.4 Why is Eskom the only supplier of electricity in South Africa? (2)
4.3.5 How does load-shedding negatively affect the economy? (2 x 2) (4)

64 | P a g e ECON GRD 11
4.4 Study the picture below and answer the questions that follow.

4.4.1 Name the primary sector presented in the above picture. (1)

4.4.2 Mention ONE other type of primary sector. (1)

4.4.3 Briefly describe the term primary sector. (2)
4.4.4 How is the primary sector linked with the secondary sector? (2)
4.4.5 Why is the contribution to GDP important in the primary sector? (2 x 2) (4)

4.5 Study the information below and answer the questions that follow

65 | P a g e ECON GRD 11
4.5.1 Identify the tertiary activity in Gauteng which contributes the most to South Africa’s
economy? (1)
4.5.2 Give an example of personal service. (1)

4.5.3 Briefly explain the term tertiary economic activities. (2)

4.5.4 Why is tertiary sector becoming more important than primary and secondary
sector? (2)
4.5.5 How will a better infrastructure benefit the community of South Africa?
(2x2) (4)

QUESTION 5 Paragraph type questions – Middle Cognitive

TYPICAL EXAM QUESTIONS

: All section B questions have TWO 8 marks questions, numbered according

to questions not like in this document.

5.1 Discuss the tertiary sector as a component of GVA. (8)

5.2 Briefly explain the economic importance of ‘energy’ as part of South Africa’s
infrastructure. (8)
5.3 Discuss the economic importance of the secondary sector in the economy (8)
5.4 Briefly discuss the economic importance of the primary sector. (8)
5.5 Briefly explain exclusions in South Africa’s infrastructure. (8)

QUESTION 6 Paragraph type questions – Higher cognitive

TYPICAL EXAM QUESTIONS

6.1 How does the cell phone industry help the poor to gain access to communication?
(8)
6.2 What has caused the ongoing energy crisis in South Africa since 2008? (8)

6.3 How important is transport infrastructure in the economy? (8)

6.4 What is the link (interaction) between the Primary and Tertiary sector? (8)

6.5 Analyse the economic importance of energy as part of South Africa’s

infrastructure. (8)

66 | P a g e ECON GRD 11
6.6 Analyse the importance of communication in the economy. (8)

SECTION C

TYPICAL EXAM QUESTIONS

ESSAY STRUCTURE

: All section C questions have TWO questions 5 & 6 NOT like in this docu-
ment. In the examination you will need to answer only one.

HINT: Section C – the long question, must be answered in FOUR sections: Introduc-
tion (definition), Body (headings and full sentences in bullets) additional part and
conclusion (summarising). The mark allocations for Section C is as follows:
MARK ALLO-
STRUCTURE OF ESSAY:
CATION:
Introduction Max 2
The introduction is a lower-order response.
• A good starting point would be to 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 saying in the introduction what you are going to discuss
in the body
Body:
Main part: Discuss in detail/ In-depth discussion/ Examine/ Criti- Max 26
cally discuss/ Analyse / Compare/ Distinguish/ Differentiate/ Ex-
plain/ Evaluate
Additional part: Give own opinion/ Critically discuss/ Evaluate/ Crit-
ically evaluate/ Calculate/ Deduce/ Compare/ Explain Distinguish / Max 10
Interpret/ Briefly debate/ How/ Suggest
Conclusion
Any Higher or conclusion include: Max 2
• A brief summary of what has been discussed without repeat-
ing facts already mentioned in the body
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the discus-
sion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL 40

67 | P a g e ECON GRD 11
QUESTION 7

• Discuss the economic importance of the tertiary sector. (26 marks)

• How do the economic sectors link with one another? (10 marks)
[40]

QUESTION 8

•Discuss transport as one of infrastructure in South Africa. (26 marks)

•How did discrimination and exclusion affected the provision of infrastructure before
democratisation of the South African economy. (10 marks)
[40]
QUESTION 9

•Discuss the importance of secondary sector in an economy. (26 marks)

•How can the establishment of more labour-intensive industries benefit South
Africa? (10 marks)
[40]
QUESTION 10

• Discuss the economic importance of primary sector in the economy. (26 marks )
• Critically evaluate the programmes that try to redress the issue of land in South
Africa. (10 marks)
[40]

68 | P a g e ECON GRD 11