Economics Grade 10 P1 Gauteng November 2018 Memo (English)

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION NOVEMBER 2018 GRADE 10 ECONOMICS PAPER 1 MARKING GUIDELINES 17 pages

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION ECONOMICS (Paper 1) SECTION: (COMPULSORY) QUESTION 1 1.1 MULTIPLE-CHOICE QUESTIONS 1.1.1 B limited means 1.1.2 A scarcity of resources 1.1.3 D households 1.1.4 C lagging indicator 1.1.5 B modern money 1.1.6 D skilled labour 1.1.7 C manageable 1.1.8 A immigration (8 x 1) (8) 1.2 MATCHING ITEMS 1.2.1 E Exists because we have limited resources with which to satisfy unlimited needs and wants 1.2.2 F A group of people that live together and make economic decisions 1.2.3 A All people have a basic human right to be free from poverty, ignorance and ownership by another 1.2.4 G A period in which there is a decline in economic activity with rising unemployment 1.2.5 D The use of tools and advanced methods to produce goods and services in the economy 1.2.6 C The combination of two different goods that could be produced when using all available resources to the full and efficiently 2

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 1.2.7 I Is the amount of money offered or asked for something that is bought or sold 1.2.8 B The movement of people across international boundaries from one country to the other (8 x 2) (16) 1.3 GIVE ONE TERM 1.3.1 Public Sector Economics 1.3.2 Savings 1.3.3 Barter 1.3.4 Communal property 1.3.5 Banks 1.3.6 Unemployed (6 x 1) (6) TOTAL FOR SECTION A: 30 3

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 SECTION B Answer any TWO of the three questions in this section in the ANSWER BOOK. QUESTION 2: MACROECONOMICS 2.1 Answer the following questions. 2.1.1 Name any TWO factors of production.  Land   Labour  Capital  Entrepreneurship (Any 2 x 1) (2) 2.1.2 Why do consumers have to make choices about what they buy?  They have scarce resources so they have to choose how to use these resources to gain maximum satisfaction (Accept any other correct relevant response.) (1 x 2) (2) 2.2 DATA RESPONSE 2.2.1 Give examples of real flow from the diagram above.  Goods and services  Factors of production (2 x 1) (2) 2.2.2 Briefly describe the term circular flow.  The movement of goods and services, factors of production, and money (income and expenditure) in an economy (2) 2.2.3 Describe the role of the factor market in the circular flow.  Factor market or resource market is where the services of the factors of production are traded.  For example labour is hired, capital is borrowed, property is rented and entrepreneurs offer their services  These factors of production earn wages, interest, rent and profits. (Accept any other correct relevant response.) (2) 4

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 2.2.4 What are the problems with international comparisons?  Some figures need to be estimated because they may be unavailable  Social wages may be high in some countries compared to others leading to higher GDP figures in those countries  Climate conditions are different from country to country and that makes it difficult to compare outputs of countries with different climates  Unreliability of exchange rates may affect the GDP figures (Accept any other correct relevant response.) (4) 2.3 DATA RESPONSE 2.3.1 Provide the above diagram with an appropriate heading.  Business cycle (1) 2.3.2 Name the lowest point, C, in the diagram above.  Trough  (1) 2.3.3 Briefly describe the term trend line.  This is a line showing the general direction of economic activity (Accept any other correct relevant response.) (2) 2.3.4 Describe the effect of a depression on employment levels.  During a depression many companies scale down on their production and ultimately many workers are retrenched causing massive unemployment (Accept any other correct relevant response.) (2) 2.3.5 How is the economy affected during the prosperity phase? The economy is affected due to:  This is a time of general optimism and consumer spending  Output and economic activity increase and entrepreneurs expand their businesses  Employ more people and buy equipment.  Profits increase as well as wages and prices  Consumer demand rises which stimulates greater production (Accept any other correct relevant response.) (2 x 2) (4) 5

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 2.4 Differentiate between economic goods and free goods. Economic goods Free goods  They are scarce in relation to their  They are not scarce, available demand without limit  People are prepared to pay for  People are not prepared to pay for them, they have a price them, they have no price  They can be sold on markets and  They cannot be counted as accumulated as wealth wealth (Accept any other correct relevant response) (2 x 4) (8) 2.5 How does the state contribute towards the growth of the economy? The state contributes towards the growth of the economy because:  The state manages the economy through various policies   Public goods, which consumers do not want to pay for, are provided to households by the state  Basic infrastructure like roads, electricity supply and bridges necessary for the growth of the economy is provided by the government   The government provides rules and regulations to protect businesses and also to protect consumers from unfair practices  National laws that influence the economy such as the national budget are the responsibility of the state (Accept any other correct relevant response.) (8) [40] QUESTION 3: ECONOMIC PURSUITS 3.1 Answer the following questions. 3.1.1 Give any TWO types of taxes paid to the government.  Value added tax (VAT)  Income tax  Company tax  Wealth tax  Capitalgains-tax (Any 2 x 1) (2) 3.1.2 How does economic growth lead to economic development?  A country that produces more goods and services has a population that has a better standard of living because they use those goods to improve their lifestyle (Accept any other correct relevant response.) (1 x 2) (2) 6

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 3.2 DATA RESPONSE 3.2.1 Which of the African countries in the table had the lowest level of urbanisation in 2010?  Uganda (13%) (1) 3.2.2 Who is responsible for the publication of the above information?  The World Factbook  (1) 3.2.3 Briefly explain the term urbanisation.  This is the gradual increase in the number of people staying in urban areas, leading to the growth of towns and cities (2) 3.2.4 What is the relationship between poverty and migration?  When people are poor they are more likely to move to areas where poverty is low so that they can find ways of reducing their poverty (Accept any other correct relevant response.) (2) 3.2.5 Why is urbanisation a problem especially to government?  Problem of infrastructure, Migration leads to densely populated informal settlements or slums necessitating a massive demand for housing and infrastructure such as land, roads, health clinics problem of service delivery, problem of electricity  Cities are now unable to absorb labour especially the unskilled ones  Unemployment is rife in towns and cities leading to crimes, such as violence, robbery, theft etc  Government is faced with an uncontrollable influx of people leading to housing, water problems etc.  (Accept any other correct relevant response.) (Any 2 x 2) (4) 7

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 3.3 DATA RESPONSE 3.3.1 To which part of the labour force does this extract refer?  Unemployed youth  (1) 3.3.2 To what proportion of the population does this extract refer?  80%  (1) 3.3.3 Briefly explain the term labour force.  The labour force of the country is made up of the economically active population  Economically active population consists of people between the ages of 15 and 64 years of age who are unemployed or working for themselves (2) 3.3.4 Describe any social effect of unemployment.  Unemployed youth can cause possible riots / violence.  The largest group 80% is youth that can cause or engage in crime as a result of frustration  Youth may become the leaders of violent public protests as they are still full of energy (Accept any other correct relevant response.) (1 x 2) (2) 3.3.5 Suggest possible solutions to unemployment.  The solution is to create jobs and training particularly for those who have fewer than 12 years of schooling  Apprenticeships, learnerships, mentorships, skills development and training should be offered to the unemployed youths  The government can be involved in job creation programmes like Expanded Public Works Programmes (Accept any other correct relevant response.) (2 x 2) (4) 8

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 3.4 Discuss the main characteristics of money as a means of payment.  Generally accepted by all as a means of payment Source currencies have more value than the others e.g. US dollar is accepted internationally rather than the Zimbabwean dollar   Must be durable and not easily counterfeited or easily rust or decay over time also cannot be easily counterfeited  Money must be scarce and valuable that is why money must not be printed in large amounts because it will lose value (scarcity) by becoming too plentiful, thus becoming worthless  Money must be manageable in that it must be easy to carry it around because of its size and weight  Must be the sameand easy to get change when different payments are made (Accept any other correct relevant response.) (4 x 2) (8) 3.5 How did industrialisation lead to the development of transport and communication? Transport  Railway lines are built to facilitate transportation of bulk products  Roads were improved  Bulk volumes of goods could be transported and delivered in shorter times  Harbours were built for sea transportation  Imports and exports possible  Development of shipping (max 4) Communication  Improved communication networks led to improved distribution of information  Business and consumers easily contacted for sales  Exports and imports businesses flourished as a result of easy contacts with international counterparts  Money transfers became easy through internet banking  Insurance and investments improved (Accept any other correct relevant response.) (max 4) (2 x 4) (8) [40] 9

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS 4.1 Answer the following questions. 4.1.1 Name any TWO approaches to studying Economics.  Microeconomics  Macroeconomics (2 x 1) (2) 4.1.2 How were nomadic societies organised?  Societies were organised in small familiy groups, moving from one area to the other as resources were depleted  (1 x 2) (2) 4.2 DATA RESPONSE 4.2.1 Identify the sector that contributed most to the GDP.  Tertiary sector  (1) 4.2.2 Comment on the trend of the contribution of the tertiary sector.  The tertiary sector contributes more income to the middle and higher income earners (1) 4.2.3 Briefly describe the term primary sector.  The sector is involved in the extraction of raw materials, for example agriculture, mining and fishing (Accept any other correct relevant response.) (2) 4.2.4 What could be the cause for the decline in the contribution of the primary sector?  Many South Africans prefer to work in other sectors like the service sector rather than in the primary sector since more are now skilled and their skills are not needed much in the primary sector (Accept any other correct relevant response.) (2) 10

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 4.2.5 How can economic human rights be addressed in South Africa?  The government has a responsibility to protect consumers from exploitation by producers  The state could impose heavy penalties on those producers and businesses who infringe on human rights  Has a responsibility to ensure that consumer rights are enforced  It can be achieved through educating consumers about their rights and referral to the organisations set up to deal with these issues  Investigate consumer complaints and consumer rights violations (Accept any other correct relevant response.) (Any 2 x 2) (4) 4.3 DATA RESPONSE 4.3.1 Identify which food items are being produced in the picture above.  Maize   Milk  (2 x 1) (2) 4.3.2 Which stage of economic development is depicted in the above picture? Provide a reason for your response?  Animal husbandry and agriculture commercial crop farming and dairy farming is evident (2) 4.3.3 Briefly describe the term Secondary Sector.  Manufacturing or processing of raw material from Primary Sector   Deals with the changing of raw material into finished goods and resources  (Accept any other correct relevant response.) (2) 4.3.4 Which factors promoted the development of mining activities in South Africa?  Foreign investment in the mining activities increased  Relatively cheap labour was available from neighboring countries  Transport in the country improved  Demand for gold as an international means of payment was high (Accept any other correct relevant response.) (2 x 2) (4) 11

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 4.4 Differentiate between Gross Domestic Product and Gross National Income. Gross Domestic Product Gross National Income  Is a good measure of how well  Is a good measure of the material the economy is doing standard of living enjoyed by the people of a country  Figures can be used to compare  Figures can be used to compare the one country with another at a material standard of living of citizens in particular point in time different countries  Determine which economies have  Also provides economic activities over produced the most output time  GDP figures are also used to  To measure GNI two adjustments must construct the business cycle be made to the value of GDP  (max 4) (max 4) (Accept any other correct relevant response.) (8) 4.5 How do stokvels contribute towards a better form of saving for members? Stokvels contribute towards a better form of saving because:  Stokvels are sociable, members have common values and understand one another  They impose self-discipline and commitment on people  No one wants to let their friends down when it comes to paying  There is social prestige in belonging to a stokvel  You must be invited to join (Accept any other correct relevant response.) (8) TOTAL FOR SECTION B: 40 12

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 SECTION C Answer any ONE of the two questions in this section in the ANSWER BOOK. QUESTION 5: MACROECONOMICS  Discuss in detail the FOUR participants in an economy and the inter- relationships between them. (26 marks)  Briefly describe the methods used to determine Gross Domestic Product. (10 marks) [40] INTRODUCTION  There are four main participants in an open economy, namely the households, businesses, the government and the foreign sector that are interlinked and therefore have a relationship with each other.  The decisions that they take and their interactions with each other.  The influence this has on individuals in the community and the influence on the level of economic activities.  (Accept any other correct relevant response.) (Max 2) BODY: MAIN PART Households  They are also known as consumers because they use goods and services  Households are the primary economic participants because they own, directly and indirectly, the factors of production (land, labour, capital and entrepreneurship)  Consumers have needs which are satisfied through the consumption of goods and services which they purchase from the firms  Consumers demand for goods and services stimulate economic activity by encouraging firms and the state to produce goods and services  Consumers sell their factors of production to firms in return for remuneration (wages, rent, interest and profit) 13

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 Firms  They are also known as businesses or producers  They purchase the factors of production from the households in the factor market  They use the factors of production to produce goods and services, which they then sell on the goods market to households  Firms are motivated to produce goods and services by the profit motive Government  Governments act to provide goods and services, which cannot be provided by firms  The state also has certain functions and roles to play in the economy. For example, protection services, social services and economic services  Governments receive revenue from firms and households in the form of taxes and revenue from state-owned property and state-owned enterprises Foreign sector  The foreign sector supplies goods and services that are imported by households and businesses and buys goods and services that are exported  The foreign sector pays for the exports and receives money for the imports our country makes with the rest of the world  The foreign sector also supplies factors of production that are imported and buys factors of production that are exported  They receive remuneration for factors that they import to us and pay for the factors that we export to them (Accept any other correct relevant response.) (Max 26) 14

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 ADDITIONAL PART Briefly describe the methods used to determine Gross Domestic Product.  There are three different ways in which Gross Domestic Product can be determined. Each way is an indication of the composition of the Gross Domestic Product  Production method  Using this method, GDP is determined by calculating the sum of the value added at each stage of the production process (primary, secondary and tertiary stages)  This method yields GDP at basic prices Income method  Using this method, GDP is determined by calculating the income earned by the factors of production within the borders of the country  This method yields GDP at factor cost Expenditure method  Using this method, GDP is determined by calculating the total expenditure on all final goods and services produced within the borders of the country (C + I + G + X – M)  This method yields GDP at market prices (Accept any other correct relevant response.) (Max 10) CONCLUSION  The economic participants are reliant on each other. An economy cannot function if one participant does not contribute fully. (Accept any other correct relevant higher-order response.) (Max 2) OR  Efficient utilisation of factors of production by producers is important so that there is an increase in the value of goods and services produced in an economy. (Accept any other correct relevant higher-order response.) (Max 2) [40] 15

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 QUESTION 6: ECONOMIC PURSUITS  Discuss the roles and functions of Commercial Banks in the development of the economy of South Africa (26 marks)  Critically evaluate the South African Reserve Bank (SARB) as the monetary authority, controlling all money-related issues of the country. (10 marks) [40] INTRODUCTION  Modern banking is characterized by the constant improvements in its functions  Banks brought about the present economic development throughout the world  Highly economically developed countries are where they are because of a well developed banking infrastructure  Banks are the link to all economic activity  (Accept any other correct relevant response.) (Max 2) BODY: MAIN PART  Banks are the intermediary, bringing together lenders (depositors) and borrowers of money  Banks are the safe keepers of money  Provide facilities where people can store money in the safe place  Banks accept and store deposits on which interest is paid  They keep foreign currency reserves  Fees can be transferred from one account to the other  Lend money in the form of loans and overdrafts at the risk of the banks  Banks charge interest for loanable funds  Banks make profit from two sources namely: earning interest on loans and overdrafts  They charge service fees for the services rendered  Banks contribute to the growth of the economy through efficient allocation of resources  Help with new business ventures by loaning money  They lend money to business who want to expand their businesses  Improves the standard of living of the people by providing loans to the individuals who want to buy assets such as houses  Address the socio-economic issues of the public by providing financial education  Banks also grant study loans and enable people to acquire further education and training  Increase the possibility for better opportunities through bursaries and loans  Banks are involved in community development projects e.g. sport, art etc.  (Accept any other correct relevant response.) (Max 26) 16

Downloaded from hlayiso.com ECONOMICS MARKING GUIDELINES (Paper 1) GRADE 10 ADDITIONAL PART  The South African Reserve Bank is a central bank that controls other banks  It was established in 1920  It has the sole right to issue bank notes and coins  South African Reserve Bank is the bank to other banks, they borrow money from it  It is also a government bank hence it applies the monetary policies  It is responsible for formulating the monetary policies  The South African Reserve Bank is the custodian of gold and foreign reserves  It oversees the activities of commercial banks  The Financial Service Board oversees the other financial institutions such as insurance and investment companies (Accept any other correct relevant response.) (Max 10) CONCLUSION  Without banking, there would have been no economic development as it is today  Through activities such as internet banking we have access to globalisation  Countries trade internationally because of the banks bringing together the buyer and the seller (Accept any other correct relevant higher order response.) (Max 2) [40] TOTAL FOR SECTION C: 40 TOTAL: 150 17