Professional Documents
Culture Documents
NATIONAL
SENIOR CERTIFICATE
GRADE 12
ECONOMICS
NOVEMBER 2010
MEMORANDUM
MARKS: 300
SECTION A (COMPULSORY)
1.1.1 B amplitude 33
1.1.2 C three 33
1.1.3 A consume 33
1.1.4 B few 33
1.1.5 C marginal cost 33
1.1.6 A Organisation of Petroleum Exporting Countries (OPEC) 33
1.1.7 C - African Union (AU) 33
1.1.8 B - structurally 33
1.1.9 A - standard of living 33
1.1.10 B decreased 33
1.1.11 A tourism 33
1.1.12 C air 33 (12 x 2) (24)
1.2 Give ONE term for each of the following descriptions by choosing a term from
the list.
SECTION B
Answer any THREE of the five questions from this section in the ANSWER BOOK.
QUESTION 2
2.1.1 Multiplier 33
2.1.2 Expansionary 33
2.1.3 Privatisation 33
Leading 33
Lagging 33
Coincident 33 (Any 3 x 2) (6)
2.3 Study the graph below and answer the questions that follow:
2.3.2 Increased 99
Reasons:
Increase in the number of South African's visiting USA99
South Africans buy more American financial assets.99
Increased imports from the USA. 99
Increased exports to South Africa. 33
Services (shipping, insurance) from USA. 99
Payments of interest and dividend on foreign capital.99
Payment of installments on repayments of overseas loans.99
Other payments to foreign countries, which take place from
time to time.99
Foreign currencies speculations 33
(Accept any other country using the dollar as currency)
(Any 1 x 2) (4)
2.3.3 Depreciated/Decreased 33
Copyright reserved Please turn over
Economics 4 DBE/November 2010
NSC Memorandum
Motivation:
Increased demand for dollars 99 OR
Decreased demand for rand 99
More rand for dollars 33
More expensive to buy dollars 33 (4)
One dollar cost R12,00 instead of R10,00 (Any 1 x 2)
2.4 Study the table below and answer the questions that follow.
Leakages is any flow that does not give rise to a further round of income
99 also known as withdrawals 99 because it represents a withdrawal of
money from the economy.99
(e.g.) of leakages are taxes (T)99 expenditure on imports (Z/M) 99 and
savings (S) 99 (Max 4)
Injections represent the introduction of additional money into the
economy 99
(e.g.) of injections are government spending (G)99 income earned from
exports (X)99 investment spending (I)99 (Max 4) (8)
QUESTION 3
3.1.1 Oligopolistic 33
3.1.3 Revenue 33
3.3 Study the extract below and answer the questions that follow:
3.3.2 Grant the order / confirm the penalty (order) imposed on the
company by the Competition Commission. 333 (3)
3.4.3 Price D S
S1 3
33
e
P1 Correct movement of supply
3P2 e1 3 curve = 2 marks
Labeling = maximum 2 marks
S S1 D
0
Q1 Q23 Quantity (4)
Oligopolists do not compete with each other on price because price wars
will not benefit them. 33
Prices are determined by mutual agreement. 33
They compete with each other on product differentiation and efficient
service. 33
Convenience shopping 33
E.g. extended shopping hours 33
Firms make use of advertisements to increase awareness and to lure
customers towards their products. 33
E.g. Pick n Pay use extensive advertising to increase market share. 33
Non-price competition builds brand loyalty and product recognition. 33
E.g. after sales service, loyalty rewards. 33
(Accept examples for maximum of 2 marks) (Any 4 x 2) (8)
Price/Cost 3
MC 3
AC 3
33
P1 Economic
f
profit
c e
d
MR 3 AR = D 3
0 Q1 Quantity 3
4.1.3 Strategies 33
4.3 Study the extracts below and answer the questions that follow:
4.4 Study the cartoon below and answer the questions that follow:
5.1.1 demand-pull 33
5.1.2 deflation 33
5.1.3 international 33
5.3 Study the extract below and answer the questions that follow.
5.3.1 Tuna, becoming extinct, will disappear from shopping lists 333
It might lead to a definite forced change in taste and habits at the
side of consumer 333
Accept any other relevant fact. (3)
5.3.2 Tuna fetches very high prices / worldwide ($50 per kg) / and one
fish may weigh up to 680 kg. 333 (3)
5.4 Study the cartoon below and answer the questions that follow.
5.4.1 Inflation is out of control and the SARB is trying to control it. 33
Accept any other relevant answer. (2)
5.4.3 3% 6% 33 (2)
5.4.4 Yes 33 e.g. the current inflation figure is within the target range
33
No 33 e.g. continuous interest rate cuts may push inflation above
the upper level of the target 33
Accept relevant answer (4)
RENEWABLE NON-RENEWABLE
Resources that can be Once these materials are extracted
generated, replaced or they are gone for ever 33
replenished 33 Once used, they cannot be
Limiting factor of the replaced 33
availability is the rate at which E.g. mineral resources, fossil fuels,
they can be produced33 such as oil, petrol, copper, gold
E.g. timber, forest products, and coal 33
agricultural products33 Examples: maximum 2 marks
Accept if not tabulated. (Any 2 x 4) (8)
Hyperinflation:
Most extreme form of inflation / runaway inflation / inflation out of
control 33
50% or more per month 33
National currency is almost worth nothing 33
Leads to exchange of goods for goods (barter) widespread
phenomenon 33
E.g. Zimbabwe 33
People lose confidence/faith in the economy 33
It can occur in times of war 33 (Any 2 x 2)
Stagflation:
Low economic growth rate exists due to strong monetary and fiscal
policies to curb high inflation rates 33
Conditions of high inflation and high unemployment rates at the same
time 33 (8)
Occurs in economies that lost the ability to create new jobs 33 [50]
(Any 2 X 2)
6.1.1 opposite 33
6.1.2 resource 33
6.1.3 growth 33
6.3 Study the table below and answer the questions that follow.
6.4 Study the table below and answer the questions that follow.
6.6 Discuss capital and technology as factors that are necessary for
economic growth.
CAPITAL:
Definition of capital: resources used in production of other goods and
services 33
Capital is necessary for the production of goods and services 33
The more capital we have, the more goods and services can be
produced 33
For effective production to take place, we need both human/social and
physical capital 33
Increase in the production capacity will lead to economic growth 33
(Any 2 x 2)
TECHNOLOGY:
Definition of technology: new scientific knowledge in the form of
inventions and innovations / sometimes referred to as fifth factor of
production 33
Sustained economic growth requires technological progress and
innovation 33
Technological progress means new kinds of capital goods as well as
new production processes 33
Technological progress can lead to economic growth 33 (Any 2 X 2) (8)
[50]
SECTION C
Answer any TWO questions from this section in the ANSWER BOOK.
I. Essay responses:
QUESTION 7
MEMORANDUM 3
TO : ALL PERSONNEL 3
All countries have public sectors and there are good reasons for the existence of such
sectors.99 The public sector is necessary for the following reasons.
4. Externalities 33
benefits or costs from production of goods and services 33
government can subsidize or restrict production 33
A. Economic growth 99
Refers to an increase in the production of goods and services in the
economy.99
it is measured in terms of real GDP 99
For economic development to occur, economic growth rate must be higher than
the population growth rate.99
Growth and development in a country benefits its citizens because it often
leads to a higher standard of living.99
B. Full employment 99
Accept any relevant definition 33
Government is always trying to attain high levels of employment.99
D. Price stability 99
SARB has succeeded in keeping inflation within the target range of
3% - 6% 99
Market economies produce better results in terms of economic growth and
development when prices are relatively stable.99
Interest rates, based on the repo rate are the main instrument used in the
stabilization policy.99
The stable budget deficit also has a stabilizing effect on the inflation rate.99
E. Economic equity 99
Redistribution of income and wealth is essential in market economies.99
In South Africa, the progressive tax system is used. 99
Progressive income tax 93 tax on profits 93, wealth and expenditure are used
to finance free social services39 (e.g.) health 39 education 39 and to pay
cash grants to the poor39 (e.g.) pensions39 and other vulnerable people 39
(max 40)
______________________________3 ___________________________3
Use the following assessment grid in conjunction with the above to assess the
discussion:
QUESTION 8
Discuss FIVE reasons for market failures and briefly outline the South African
governments attempts to improve income distribution.
INTRODUCTION
Market failures occur when the market is not efficient. Sometimes free markets fail
to produce maximum of goods and services from a given set of resources / The
market also fails to produce the optimal mix of goods and services desired by
consumers. 333
(max 3)
BODY
REASONS:
1. Externalities 33
Known as spill-over effects 33
Sometimes in ideal market conditions some people gain or suffer due to the
existence of externalities 33
Are cost and benefits to third parties which are not included in the market
price33
Private costs (internal costs) and benefits are determined the market
mechanism33
Externalities do not go through the market mechanism and thus do not have a
price attached to them33
Externalities converts private costs and benefits are converted to social costs
and benefits 33
Externalities are difference between social costs and benefits and private costs
and benefits 33
o Private costs 33 price of bicycle of R990 33
o Private (internal) benefits 33 e.g. profit for the producer 33
o Social costs 33 e.g. additional costs like disposing waste products,
decreasing appeal of area 33 optimal social and market allocation 33
o Social benefits 33 e.g. clean water leading to few illnesses, healthier
workforce, higher productivity 33 (max 6)
2. Public goods 33
Markets incomplete do not meet demand for certain goods public sector
provides these goods known as public goods33
Divided into community (water drainage and light houses) and collective goods
(parks, pavements) 33
Public goods are not provided by price mechanism producer cannot withhold
goods for non-payment 33
State finance public goods through taxation and provide it themselves 33
In SA most goods and services private goods have rivalry in consumption
and excludability 33
Features of public goods:
- non-rivalry 33 consumption by one person does not reduce consumption by
another individual e.g. lighthouse 33
- non-excludability 33 consumption of public goods cannot be confined to
those who pay for it (free riders e.g. radio and television licenses) 33
- social benefits outstrip private benefits 33 large social benefits relative to
private benefits e.g. health care and education 33
5. Lack of information 33
CONCLUSION
Use the following assessment grid in conjunction with the above to assess the
discussion:
QUESTION 9
Discuss and assess the economic indicators as depicted below in terms of the
state of the South African economy. [50]
INTRODUCTION
BODY
Definition: The GDP is the total value of all final goods and services produced
within the borders of a country in one year.33
The GDP measures the total production of an economy.33
An increase in the Real GDP will cause economic growth, which is defined as
the annual rate of increase in total production.33
Nominal GDP cannot be used because its magnitude is partly caused by price
increases and not by an increase in the physical numbers.33
The real GDP is obtained when the effect of inflation is removed from the data.
(GDP-Deflator) 33
RGDP is used to describe business cycles.33
An important use of the RGDP is therefore to express real aggregate economic
activity and to describe the movement of business cycles.33
It is also used in forecasting, e.g. if the index of leading indicators starts to
increase after a continuous decrease, it is an indication that the cycle has
turned.33
Assessment:
The total value of production decreased with 4% over the period 2008/2009.
33
It is a clear that South Africas economy was trapped into a recession.
(negative growth for two consecutive quarters) 33
As a result one will find the following:
- Increase in the unemployment rate/ layoffs 33
- Increase number of bankruptcies / debt 33
- Poor profit margins etc.33 (Max 5 X 2) (10)
If the population grows at a faster rate than the economy, everybody may be
seen worse off despite increases in the quantities of goods and services.33
(For this reason the per capita RGDP is calculated)
Calculation: per capita RGDP = RGDP / population number 33
The per capita figures are use for three purposes:
- To indicate economic development 33
- To indicate living standards 33
- To compare living standards 33
Assessment:
As a result of the global and domestic recession we find our self in the
position where many people is been laid off and with out income, 33
this will have a negatively impact on the GDP and also on the per capita
RGDP. 33
That will indicate a drop in the standard of living and contributes to our
growing poverty problem.33 (Max 5 X 2) (10)
3. Consumer Price Index (Price changes)
The CPI decreases to within the inflation target of 3-6% over the period33
What means that inflation is for the time being, under control because of
strict monetary measures by the SARB33 and
The negative perception from consumers of the economy due to the global
recession.33 (Max 5 X 2) (10)
Assessment:
Against the background of a slowing global and domestic economy and the
improved medium-term outlook for inflation, the MPC has decided to reduce
the repurchase rate (Repo Rate) 33 (Max 5 X 2) (10)
Copyright reserved Please turn over
Economics 27 DBE/November 2010
NSC Memorandum
Assessment:
Gini coefficients for countries with highly unequal distribution are typically
between 0.50 and 0.70. It is therefore clear that South Africa can be classified
as a country, which is highly unequal.33
(Max 5 X 2) (10)
(Any 4 x 10) (40)
CONCLUSION
Use the following assessment grid in conjunction with the above to assess the
discussion:
[50]
MARKS INTERPRETATION OF TOPIC
0 Candidate has shown no understanding of the topic.
Candidate has shown some understanding of topic but has missed
1
important aspects of topic. (1 - 15)
Candidate has interpreted topic correctly but has not linked facts to
3
topic. (16 - 30)
Candidate has interpreted topic correctly and has linked facts to
5
topic. (31 - 45)
QUESTION 10
INTRODUCTION
Copyright reserved Please turn over
Economics 28 DBE/November 2010
NSC Memorandum
Tourism represents a unique industry in an economy because its effects extend far
beyond the tourism industry itself. Tourism is an industry that provides a substantial
economic stimulus to other industries 333 (Max 3)
BODY
World Travel and Tourism Council (WTTC) estimates million jobs directly
created by tourism in 2002 1/3 of economys workforce 33
Largest provider of jobs and earner of foreign exchange,33 due to: tourism is
labour intensive 33 employs many skills 33 can provide immediate
employment 33 provides entrepreneurial opportunities 33
Indirectly 6.9% of workforce involved with tourism in SA 33
Significant part of tourist expenditure goes towards informal sector activities 33
Tourism contributes equally to GDP and job-creation indicates how labour
intensive the sector is 33
DEAT shows current focus of government on sectors potential to create
entrepreneurial and employment opportunities for historically disadvantaged 33
Contribution (own opinion) 33
3. Poverty relief 33
4. Externalities 33
Benefits that arise from economic activities that are not reflected in the actual
prices of transactions refer to economic side-effects of certain transactions
33
Tourism strategy will maximize external benefits and minimize external costs of
various externalities 33
Such benefits are normally measured in terms of an impact or cost-benefit
analysis 33
Attracts large amounts of revenue, but cause undue environmental damage 33
Rapid growth aimed at short-term benefits 33
Global tourism will grow due to increased population and increased living
standards 33
Potential: attract revenue to country, alleviate poverty, conserve cultural and
natural assets needs conscious planning 33
Needs to achieve ethical and sustainable tourism must respect tradition and
customs of area, plough back earnings into local community area must be
protected as attractive tourist resort 33
Contribution (own opinion) 33
5. Environmental effects 33
People have become more aware of the negative environmental consequences
and implications for consumption and waste 33
Tourisms relationship with environment is complex involves many activities
that have adverse environmental effects 33
Led to emphasis on ecotourism development - involves guidelines for
managing social, economic and environmental impact of tourism 33
Objective is to achieve an equitable spread of benefits across the entire
population 33
Local communities engaged in tourism to achieve local empowerment 33
Copyright reserved Please turn over
Economics 30 DBE/November 2010
NSC Memorandum
Ecotourism development embraces principles of ecological preservation 33
Permanent environmental restructuring 33 e.g. highways, airports 33
Contribution (own opinion) 33
6. Infrastructure 33
SA has modern, world-class infrastructure, sophisticated transport system 33
low-cost and widely available energy and advanced telecommunication system
33
Quality infrastructure will increase volume of tourism need good travel
facilities, well-maintained road network and excellent tourist accommodation,
such as hotels and lodges 33
Most centres have good transport lines, superior road and highway
infrastructure 33
Proper infrastructure planning needed to accommodate growth in tourism 33
Development of infrastructure is seen as public investment 33
Contribution (own opinion) 33
7. Measuring tourism 33
Every time money is spent locally, it helps to ensure the balance of payments
equilibrium 33
ADVANTAGES:
1. Households 33
Income is earned through employment 33
Infrastructure is created for use by both tourists and local people 33
Skills require education and training offered as school subjects: Tourism,
Hospitality 33
2. Businesses 33
Economic and basic services infrastructure provided by public sector forms
foundation for superstructure 33
3. Government 33
Levying of taxes 33 with two purposes:
Recover external costs (showers on the beach) 33
Raise revenue (tourists seen as part of tax base) 33
4. Infrastructure (33)
Residents and visitors enjoy adequate and well-maintained physical and basic
services essential in tourist destinations 33
DEAT, SDI, corridors and PPPs with tourism as focus 33
Also require social infrastructure e.g. ambulance services 33
(Max 40)
(Max 10 for contribution)
CONCLUSION
From the above discussion it is clear that tourism plays a very important role in any
economy, but that certain effects of tourist activities can be harmful to the community
as such. 33
Accept any other relevant conclusion. (Max 2)
Use the following assessment grid in conjunction with the above to assess the
discussion:
MARKS INTERPRETATION OF TOPIC
0 Candidate has shown no understanding of the topic.
Candidate has shown some understanding of topic but has missed
1
important aspects of topic. (1 - 15)
Candidate has interpreted topic correctly but has not linked facts to
3
topic. (16 - 30)
Candidate has interpreted topic correctly and has linked facts to
5
topic. (31 - 45)
TOTAL SECTION C: 100
GRAND TOTAL: 300
[50]