# Economics Grade 11 P1 Gauteng November 2019 Memo (English)

> Grade 11 Economics Paper 1 memorandum from the Gauteng November 2019 (English), 15 pages. Read online or download the free PDF.

- Page: https://www.hlayiso.com/library/gr11-ecn-p1-english-november-2019-marking-guidelines/b5208100-58d4-4b8a-bd01-4f9a78be1e59
- Updated: 2026-09-27
- Subject: Economics
- Grade: Grade 11
- Language: English
- Document type: Memorandum
- Year: 2019
- Exam period: Gauteng November
- Paper: 1
- Curriculum: CAPS
- Pages: 15

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## About this document

Economics · Grade 11 · Gauteng November · 2019 · English. Memorandum, 15 pages. Read online or download the PDF.

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               GAUTENG DEPARTMENT OF EDUCATION
                      PROVINCIAL EXAMINATION
                        NOVEMBER 2019
                            GRADE 11

                            ECONOMICS
                             PAPER 1

                       MARKING GUIDELINES

15 pages

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Economics/P1                               2                     GP/November 2019
                               Grade 11 – Marking Guidelines

SECTION A (COMPULSORY)

QUESTION 1                                              30 MARKS - 20 MINUTES

1.1.   MULTIPLE-CHOICE QUESTIONS

       1.1.1   C √√   natural resources
       1.1.2   A √√   economic aggregates
       1.1.3   D √√   government
       1.1.4   C √√   mineral resources
       1.1.5   A √√   0 and 1
       1.1.6   B √√   Economic growth rate
       1.1.7   D √√   free trade area
       1.1.8   C √√   eradicate poverty
                                                                     (8 x 2) (16)

1.2.   MATCHING ITEMS

       1.2.1 C √ (Occurs when labour-capital ratio increases)

       1.2.2 I √ (Mineral resources and fossil fuels are exhausted when they are
                  mined)

       1.2.3 D √ (Means of production are controlled by private owners)

       1.2.4 E √ (Production of capital goods)

       1.2.5 F √ (Ratio of output to input)

       1.2.6 B √ (The practice of passing on wealth from one generation to the next)

       1.2.7 A √ (Trade agreement between a group of emerging markets)

       1.2.8 G √ (Bank saving accounts and term deposits)
                                                                            (8 x 1) (8)

1.3.   GIVE THE TERM

       1.3.1   Depreciation √
       1.3.2   Economic goods √
       1.3.3   Parastatals √ / Public corporations √
       1.3.4   Fiscal policy √
       1.3.5   Human development index √
       1.3.6   Cash reserve requirement √

                                                                            (6 x 1) (6)

                                                               TOTAL SECTION A: 30

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Economics/P1                              3                      GP/November 2019
                              Grade 11 – Marking Guidelines

SECTION B

Answer TWO of the three questions in the ANSWER BOOK.

QUESTION 2: MACROECONOMICS                               40 MARKS – 30 MINUTES

2.1    Answer the following questions

       2.1.1   Mention any TWO kinds of capital
          •    Physical capital √
          •    Financial capital √
          •    Fixed capital √
          •    Human capital √
          •    Social capital √
          •    Capital stock √
          •    Working capital √                                            (2 × 1) (2)

       2.1.2 Why is the supply of land fixed?
               • The resources are not man-made √√
               • These resources are scarce in relation to the demand for
                   them √√
               • The availability of non-renewable resources cannot be increased
                   if more resources are required √√
                   (Accept any other correct relevant response.)      (1 × 2) (2)

2.2
       2.2.1 Name the industry of the primary sector presented in the above
             picture
                • Forestry √√                                              (2)

       2.2.2 What is the relationship between the primary and secondary
             sector?
                • The primary sector provides raw materials for further
                   processing. √√
                • The secondary industries process or manufacture the raw
                   material into more useful products for use by all of the
                   sectors. √√
                                 (Any relevant correct information)         (1 × 2) (2)

       2.2.3 Briefly explain why minimum wage was introduced in the
             agricultural sector in South Africa
             Minimum wage was introduced to create a minimum standard of living
             for farm workers. √√ (Accept any other correct relevant response.) (2)

       2.2.4 Why is the contribution to GDP important in the primary sector?
               • Primary sector decreased in terms of the direct value it added √√
               • The relative decline represents a structural change √√
               • It means a country becomes less dependent on the primary
                   sector and more dependent on the secondary and tertiary
                   sectors √√
               • Industry has a very important role because it provides food to the
                   domestic population √√
               • Contributes greatly to employment and export earnings √√
                                                                        (2 × 2) (4)
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Economics/P1                               4                      GP/November 2019
                               Grade 11 – Marking Guidelines

2.3
       2.3.1 Which method was used in the calculation of the gross domestic
             product above?
                • Production √ / GDP(P) √                                (1)

       2.3.2 Which year is currently used as the base year by the SARB?
               • 2010 √                                                              (1)

       2.3.3 Briefly explain the concept Gross Value Added.
                • Measure of the value of goods and services produced in each
                    stage of production √√                                   (2)

       2.3.4 Briefly describe the term Gross National Product (GNP).
                • Total market value of goods and services produced by
                    permanent residents of a country during a given period √√           (2)

       2.3.5 Calculate the percentage contribution of the secondary sector to
             the Gross Value Added at basic prices. Show all your calculations.
               833 994 x 100 √√
             3 974 873    1

               = 20,98 % √√ or 21% √√                                                   (4)

2.4    Discuss the economic importance of the tertiary sector in the economy

       Contribution to GDP √

       •    The tertiary sector currently makes the greatest contribution to South
            Africa’s GDP. √√
       •    The contribution has increased from 51% of GDP in 1960 to 67% in
            2010. √√
       •    This shows that our economy is becoming more developed as products
            from the other sectors are traded on formal markets. √√

       Contribution to employment and training √

        •   The tertiary sector is the largest employer in economy. √√
        •   It employed 71% of the workforce in 2010√√
        •   It provides jobs for highly skilled as well as semi-skilled and unskilled
            workers. √√
        •   Opportunities for training are provided by most of the businesses in this
            sector, both state and privately owned. √√

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Contribution to economic growth √

      •   The growth of the tertiary sector has been greater than that in any of the other
          sectors. √√
      •   The growth in the tertiary sector for the seven years from 2003 to 2010 was
          much higher than that of the primary and of the secondary sectors. √√
      •   Over this period the tertiary sector was the “engine of growth” that pulled the
          other sectors. √√

Contribution to exports √
  • Countries export services when they sell services, such as insurance and port
       facilities, to foreigners. √√
  • Countries also import services. √√
  • The growth of the tertiary sector has been greater than that in any of the other
       sectors. √√
       (A maximum of 4 marks should be allocated for headings / listing of facts and
       examples.)                                                   (Any 2 x 4) (8)

2.5       How can procurement benefit the marginalised people in South Africa?

      • It addresses past discriminatory policies and practices √√
      • It redistributes wealth by channeling funds to businesses belonging to
        previously disadvantaged groups √√
      • It achieves anti-discrimination objectives in the workplace √√
      • It directs investment funds into underdeveloped and disadvantaged rural
        communities by means of conventional constructional projects √√
      • Encourages the participation of SMME’s in providing goods and services for
        government procurement √√                                                 (8)
                                                                                 [40]

QUESTION 3: ECONOMIC PURSUITS                               40 MARKS – 30 MINUTES

3.1
          3.1.1   Name any TWO examples of social grants
             •    Child support grant √
             •    Foster care grant √
             •    Old age pension grant √
             •    Disability grant √                                           (2 x 1) (2)

          3.1.2 What is income inequality?
                Extreme concentration of income among few participants in the
                economy √√ / Income distribution that is not in proportion to the
                number of persons in the population. √√
                (Accept any other correct relevant response.)                          (2)

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Economics/P1                              6                      GP/November 2019
                              Grade 11 – Marking Guidelines

3.2
       3.2.1 List TWO member countries of SADC
                • Angola√
                • Botswana√
                • DRC √
                • Lesotho √
                • Malawi √
                • Mauritius √
                • Mozambique √
                • Namibia √
                • RSA √
                • Seychelles √
                • Swaziland √
                • Tanzania √
                • Zambia √
                • Zimbabwe √
                • Madagascar √                                              (2 x 1) (2)

       3.2.2 What does the abbreviation SADC stand for?
               • South African Development Community √√                             (2)

       3.2.3 Name ONE economic goal of SADC.                                        (2)
               • Economic well-being √√

       3.2.4 Briefly discuss South Africa’s importance in Africa
                • It sets an example – it has solved its internal political problems in
                    a peaceful manner, not by means of ‘the barrel of a gun’ √√
                • It is an independent facilitator – South Africa has played a role
                    in facilitating acceptance of Nepad by the most developed
                    nations √√
                • It is involved – Former President Thabo Mbeki was one of the
                    main architects of Nepad, a policy which focuses very much on
                    the economic development of African countries. √√              (4)

3.3
       3.3.1 Name the curve that represents the Lorenz curve.
               • Curve C √√                                                         (2)

       3.3.2 Briefly explain the term Lorenz curve.
                • It is a method of measuring the degree of inequality of income
                    and wealth distribution between households.√√               (2)

       3.3.3 What happens when the Lorenz curve is away from the line of
             equality?
                • There will be a greater degree of inequality. √√       (2)

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Economics/P1                                  7                       GP/November 2019
                                  Grade 11 – Marking Guidelines

3.3.4 Why is income and wealth in a country such as South Africa so
      unequally distributed?

          •   South Africa does not have a saving culture √√– means that poor and
              middle income families are unlikely to gain wealth √√ as they are not
              saving money and investing but rather spending everything they earn. √√
          •   Poor families tend to have larger families than wealthy people √√ – they
              are unlikely to have any money left at the end of the month to save and
              generate wealth. √√
          •   The education system in South Africa is still producing huge numbers of
              students that do not qualify to study at tertiary institutions √√ – this means
              that the skills shortage in this country is not being addressed. √√
          •   Skilled workers will thus continue to command higher wages than the
              unskilled workers. √√ With these higher wages the skilled workers are able
              to save and generate wealth. √√                                             (4)

3.4       How does regional economic integration remove trade barriers between
          member countries?

      •   Free trade area √
          Two or more countries agree to trade with each other by eliminating tariffs and
          other barriers to trade amongst the members. √√
          Each country still has its own tariffs on imports from non-member countries. √√

      •   Common monetary union √
          Countries situated near each other agree to use one single currency as a legal
          tender. √√
          South Africa has such an agreement with Swaziland and Lesotho. √√

      •   Customs union √
          Countries agree on a single external tariff amongst member countries e.g.
          SACU. √√

      •   Common market √
          Includes all the features of a customs union but also permits the free
          movement of capital and labour beyond the borders of member countries. √√

      •   Monetary union √
          Member countries use a single currency to trade as with a CMA. √√
          In an economic union there is free movement of labour and capital. √√
          Economic policies are synchronised amongst member countries. √√
          [If only listed, max 4 marks]                                                  (8)

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Economics/P1                                 8                       GP/November 2019
                                 Grade 11 – Marking Guidelines

3.5       Explain low life expectancy and lack of education as the characteristics
          of developing country.

      •   Low life expectancy
          Developing countries have a low life expectancy, on average 51 years,
          compared to 75 years for developed countries. √√
          This means that a smaller portion of a developing country’s population is
          available as an efficient labour force. √√
          They are fighting an endless battle against diseases, ill health and
          malnutrition. √√
                                                                            (Any 2 × 2) (4)

      •   Low standard of living
          Low living standards are also related to low levels of education. √√
          The level and effectiveness of education is expressed by the adult literacy
          rate. √√
          This is a percentage of people aged 15 years and above who can read, write
          and speak. √√
          Literacy rates in developing countries are low compared to those in developed
          countries. √√
          Education deficiencies and the apartheid legacy have caused severe skills
          shortages in South Africa. √√
          The most important way of escaping poverty for individuals is education. √√
          An improved education system is necessary to grow the economy as a whole.
          √√                                                                (Any 2 × 2) (4)
                                                                                        (8)

QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS
                                      40 MARKS – 30 MINUTES

4.1
          4.1.1 List two methods of determining GDP
                Income √
                Production √
                Expenditure √                                                           (2)

          4.1.2 Explain how consumption stimulates employment.
             • If consumption increases firms have to increase production and to do
                this more people are needed to work in the factories. √√   (1 × 2) (2)

4.2
          4.2.1 What type of economic system is referred to in the above extract?
                  • Command √ / centrally planned √ / command √                 (1)

          4.2.2 Who allocates the resources in the above extract?
                  • Government √                                                         (1)

          4.2.3 Briefly describe the term economic system.
                   • Methods used by countries to allocate their resources √√            (2)

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Economics/P1                                  9                      GP/November 2019
                                  Grade 11 – Marking Guidelines

       4.2.4 Why is South Africa regarded as a mixed economy?

                     •   The government plays a role in providing collective goods
                         and services and in regulating the market √√
                     •   South Africa has a dual economy with a highly developed
                         financial and industrial economy √√
                     •   Consumers have freedom to decide how to spend their
                         income and what to consume √√
                     •   The government uses sufficient monetary and fiscal policy to
                         ensure maximum economic growth and continuous stability
                         of prices √√
                     •   The government‘s involvement in the markets entails
                         intervention to control prices to protect consumers and
                         workers. √ √
                         (Accept any other correct relevant response)           (2 x 2) (4)

4.3
       4.3.1 Name TWO risks that banks face
               • Liquidity risk √
               • Credit risk √
               • Interest rate risk √
               • Investment risk √
               • Capital risk √                                                  (2 x 1) (2)

       4.3.2 How does the South Africa Reserve Bank deal with bank
             failure?
                    The South African reserve bank ensures that banks are
                    managed in terms of the Banks Act, and that depositors are
                    not exposed to unnecessary risk √√
                    (Accept any other correct relevant response)               (2)

       4.3.3 Who are the victims of bank failure?
               • Depositors √
               • Shareholders √                                                          (2)

       4.3.4 Briefly explain medium of exchange and measure of value as
             functions of money.

                     •   Medium of exchange
                         It is generally accepted as a means of payment. √√
                         Goods, services and labour are exchanged for money. √√
                     •   Measure of value
                         Money provides a measure that enables us to put a value on
                         goods and services. √√
                         If a price is allocated to something, money serves as a measure
                         of value. √√                                                 (4)

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Economics/P1                                10                        GP/November 2019
                                Grade 11 – Marking Guidelines

4.4    Differentiate between economic growth and economic development.
                Economic growth                         Economic development
        Is an increase in the productive      Is an increase in the standard of living of
        capacity of the economy √√            people in a country √√
        Is measured as a percentage           Deals with issues such as education
        change in real GDP √√                 literacy, heath care, unemployment and
                                              environmental sustainability √√
        Concerned with goods and              Concerned with people and human
        services √√                           development √√
        Is necessary input for economic       Growth should lead to development √√
        development √√
                                 ( 2 x 2) (4)                                  (2 x 2) (4)
                                                                                       (8)

4.5    Discuss reasons for the unequal distribution of income.

        •   Unequal holdings of wealth – As wealth generates income in the form of
            profits, interest and dividends, differentials in wealth cause differences in
            income. √√
        •   Differences in the composition of households – Some households are big
            and others are small. √√
        •   Differences in skills and qualifications – Those with advanced skills and
            qualifications are likely to earn high incomes. √√
        •   Discrimination – The income of some groups is adversely effected by
            discrimination in terms of employment opportunities, pay and promotion
            chances. √√                                                          (2 x 4) (8)

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Economics/P1                                11                        GP/November 2019
                                Grade 11 – Marking Guidelines

SECTION C

Answer any ONE of the two Questions from this section in the ANSWER BOOK.

QUESTION 5: MACROECONOMICS                                 40 MARKS – 40 MINUTES

   •   Discuss in detail South Africa’s infrastructure.                  (26 marks)

   •   In your opinion what has caused the ongoing energy crisis in South
       Africa since 2008?                                     (10 marks) [40]

INTRODUCTION

Infrastructure refers to country’s social capital. It is the pedestal that carries the
economic structure of a country √√                                                (max. 2)

MAIN PART

Communication √

An efficient communication infrastructure is essential, particularly for business
because they have to:
   • Watch prices √√
   • Check the availability of raw materials and services √√
   • Follow financial changes √√
   • Compare and assess domestic and foreign economic conditions

   Telephones √
      Telephones operate with cable connections or signal connection. √√
       • Fixed -line telephones. The fixed-line system used in South Africa are
          owned and managed by Telkom SA. The fixed landline system is essential
          also provides for the following essential communication elements √√
           o Email: Personal computers can communicate with one another by
               means of modems. Email messages and other type of
               correspondence are transmitted from one computer to another. √√
           o Facsimile services: This machine makes it possible to send
               messages and images by telephone line. √√
           o Internet: PCs with modems can access one another’s database and
               other information storage areas. All kinds of information can be
               obtained or distributed within seconds worldwide. Buying and selling
               over the internet is called e-commerce. √√
           o Cellular phones: These phones operate on airwave signals.
               Communication can be set anywhere where signals are available
               when travelling or when stationary. SMS-function performs a short
               message function. √√

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                              Grade 11 – Marking Guidelines

       •    Postal services √
              o Mail by land or air is the most common and basic means by which
                   messages can be communicated and goods delivered.
              o The speed at which globalisation takes place depends on a fast and
                   reliable communication system. √√

       •   Media √
             o The print, such as magazines and newspapers communicate with
                 the public by providing both general and specific information.
             o Electronic media includes radio, television and internet.

Transport √
     • Road transport √
            o South Africa has a modern road transport system. √√
            o Private motor vehicles are the most important form of road
              transport. √√
            o Mini-bus taxis provide an important service to nearly half of South
              Africa’s daily commuters. √√

       •   Rail transport √
              o Spoornet manages the national railway network of South Africa. √√
              o Most of Spoornet’s rolling stock is produced in South Africa. √√
              o Spoornet provides railway transport to mainly for goods containers.
                   √√
              o South Africa’s railway network is the largest in Africa. √√

       •   Ports and marine transport. √
              o Portnet manages all harbours. √√
              o South Africa does not have a national sealine, however has a large
                  commercial fleet that is privately owned. √√

       •   Air transport √
               o South African Airways (SAA) is South Africa’s national air carrier
                   and provides extensive network of flights between all major centres
                   within South Africa, and between South Africa and some
                   neighbouring countries and major overseas cities. √√

Energy √
South Africa has a well-developed energy infrastructure, which provides an almost
uninterrupted supply without major shortages. √√
It is exceeds the norm compared to other developing countries
     • Electricity √
           o Electricity is supplied by cables and transmitted by means of power
               lines. √√
           o Eskom is the national provider. √√
           o Electricity in South Africa comes from three major sources: coal, water
               and nuclear power. √√

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                               Grade 11 – Marking Guidelines

   •   Liquid fuel √
          o Crude oil, petrol, diesel, paraffin and aviation fuel are the most
              important fuels used in South Africa. √√
          o Retail distribution of all fuel is affected by means of hundreds of fuel
              stations that belong to private firms. √√

   •   Gas √
         o Natural gas is produced from a source in Mossel Bay and it is used by
             Petro SA. √√
         o Coal gas is processed and distributed by Sasol. √√

   •   Renewable sources √
         o Apart from water used for hydro-electrical power, the only other
            source of energy that is used on a significant scale in South Africa is
            firewood. √√
         o In some areas it is completely depleted and in other areas they are
            under heavy pressure. √√
         o The alternative is to use coal. √√
         o Solar, wind and tidal energy are at experimental levels, although at
            different stages. √√
            (A maximum of 8 marks for headings and examples)                (max. 26)

ADDITIONAL PART

   •   Eskom is the only provider of electricity in South Africa. √√
   •   Eskom has not invested enough in new power sources. √√
   •   The price of electrical power has been too low to provide the required capital
       to create new power stations. √√
   •   It is very costly to build new power stations. √√
   •   Illegal power connections by households who don’t pay for power usage.
   •   The state has been very reluctant to allow privately owned companies to enter
       the power-generation field. √√
   •   The use of renewable sources of power, especially solar power, has not been
       emphasised. √√
   •   Large power users have been given especially low rates by Eskom. √√
       (Accept any correct relevant answers.)                               (max. 10)

CONCLUSION
Infrastructure has a vital role in the country, as it is an enabler for economic growth
and economic development. √√ (Accept any other correct relevant conclusion.)
                                                                                 (max. 2)
                                                                                      [40]

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Economics/P1                              14                      GP/November 2019
                              Grade 11 – Marking Guidelines

QUESTION 6: ECONOMIC PURSUITS                            40 MARKS – 40 MINUTES

   •   Discuss the functions of the South African Reserve Bank under the
       following headings:
           o Government’s banker      (8)
           o Bank of issue            (8)
           o Bankers’ bank           (10)                      (26 marks)

   •   How will the Governor of the Reserve Bank use monetary policy to
       influence the quantity of money of the country?       (10 marks) [40]

INTRODUCTION

The central bank is the monetary authority of a country. South Africa’s central Bank
was established in 1920. The main function of the SARB is to be the monetary
authority. √√     (Any appropriate introduction is acceptable.)                (max. 2)

BODY

   •   Government as banker
         o The Reserve bank is the main banker of the state. √√
         o It renders services to the government which are similar to those
            commercial banks render to their clients. √√
         o Government departments deposit their funds with the Reserve Bank
            and draw cheques on their accounts. √√
         o The Reserve Bank also provides loans, foreign exchange and financial
            advice to the government. √√
         o Also provides monetary advice to the government √√               (max. 8)

   •   Bank of issue
         o SARB has the sole right to issue bank notes and coins. √√
         o The South African Mint Company mints South African coins. √√
         o Both these companies are subsidiaries of the SARB. √√
         o In the issuing of bank notes and coins, the Bank is guided by the needs
            of the economy. √√                                             (max. 8)

   •   Bankers’ bank
         o SARB declares and keeps the minimum cash reserves that all banks
            are required to hold to stay solvent. √√
         o SARB acts as a clearing bank by settling inter-bank obligations. √√
         o The banks do not have to repay the various cheques to one another,
            but the SARB will settle the balances between the banks. √√
         o The SARB is the lender of last resort. √√
         o It grants loans to the commercial banks when these banks have a
            liquidity problem. √√
         o The SARB oversees the commercial banks. √√
         o It ensures that the banks are operating in accordance with the Banks
            Act. √√
         o The SARB makes sure that all the banks implement monetary policy √√
                                                                        (max. 10)
                                                                        (max. 26)

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### Page 15

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Economics/P1                              15                      GP/November 2019
                              Grade 11 – Marking Guidelines

ADDITIONAL PART

How will the government of the Reserve Bank use monetary policy to influence
the quantity of money of the country?

The SARB can influence the quantity of money of the country by:
  • increasing the supply of money by adding money to the economy √√
  • or decreasing the supply of money by withdrawing money from the
     economy √√
  • contraction of economic activities will happen in times of recession and
     depression√√
  • stimulating the economy by increasing the supply of money √√
  • cooling down the economy by reducing the supply of money during inflation √√
  • stimulating the economy by decreasing repo rate using interest rates and
     banks will decrease interest rates √√
  • influencing the supply of money by changing the percentage of deposits that
     banks must keep as cash reserve √√
  • limiting the supply of money by selling securities to the banks or the opposite
     when it wants to increase the supply of money √√
  • convincing moral persuasion to ask banks to be more careful with the granting
     of loans or to encourage loans √√
      (Accept any other correct relevant response)                         (Max. 10)

CONCLUSION

The mission of the SARB is to protect the internal and external value of the rand; it
has control over all money-related issues in South Africa. √√
 (Accept any other correct relevant conclusion)
                                                                              (Max. 2)
                                                                                    [40]

                                                          TOTAL SECTION C:            40

                                                              GRAND TOTAL:           150

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