Economics Grade 11 Paper 1 Gauteng November 2017 Memo

Downloaded from hlayiso.com GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION NOVEMBER 2017 GRADE 11 ECONOMICS PAPER 1 MARKING GUIDELINE 20 pages 1

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 GAUTENG DEPARTMENT OF EDUCATION PROVINCIAL EXAMINATION ECONOMICS (Paper 1) MEMORANDUM SECTION A (COMPULSORY) QUESTION 1 1.1 MULTIPLE-CHOICE QUESTIONS 1.1.1 A √√ inputs 1.1.2 C √√ foreign direct investment 1.1.3 D √√ full employment 1.1.4 C √√ national roads 1.1.5 A √√ level of per capita income 1.1.6 B √√ reducing child mortality 1.1.7 D √√ Lorenz curve 1.1.8 B √√ repurchase rate (8x2) (16) 1.2 MATCHING ITEMS 1.2.1 F√ This document outlines how government proposes to finance its expenditure in a given period. 1.2.2 E√ A process where foreign countries withdraw businesses from a country. 1.2.3 H√ This institution was established in 1983 to promote economic development in Southern Africa. 1.2.4 A√ Enterprises which are controlled by the authorities. 1.2.5 B√ State intervention to protect workers against unfair labour practises. 1.2.6 D√ A policy aimed to increase the ownership of agricultural land to black people in the economy. 1.2.7 C√ The relationship between input and output 1.2.8 G√ The sum total of factor income in a country (8) (8 x 1) 2

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 1.3 GIVE THE TERM 1.3.1 Per capita income√ 1.3.2 Informal sector√ 1.3.3 Gross value added at basic prices√ 1.3.4 Economic integration√ 1.3.5 Micro financing√ 1.3.6 SACU√ (6 x 1) (6) TOTAL SECTION A: 30 3

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 SECTION B QUESTION 2 2.1 2.1.1 Name TWO groups which contribute to capital formation in a country.  households / consumers√  businesses√  government / state / public sector√  foreign sector√ Any (2 x 1) (2) 2.1.2 Why are all economies mixed systems? There is some form of state / government intervention√√ (Accept any relevant answer.) (1 x 2) (2) 2.2 DATA RESPONSE 2.2.1 Give an example of a primary income from the rest of the world. (2)  RSA citizen working and earning money in the UK. √ (Accept any other correct relevant response.) (1) 2.2.2 Do we add a subsidy to the basic prices or subtract it?  Subtract √ (1) 2.2.3 Describe the concept Gross Domestic Product.  The total value of final goods and services produced within the borders of a country in one year. √√ (2) 2.2.4 Explain the difference between current prices and constant prices.  Current prices – (Nominal prices) Does not take into account changes in the general price level / no inflationary effect. √√  Constant prices – (Real prices) Where the change in the general price levels were taken into account (inflation added). √√ (4) 4

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 2.2.5 Calculate the value of A in the table. (Show all calculations)  Gross domestic product at market prices: R 2 964 805  Plus: Primary income from the rest of the world: 48 501  Minus: GNI at market prices: 2 978 806 √ Primary income to the rest of the world (A) 34 500 √ (2) 2.3 DATA RESPONSE 2.3.1 What economic message is conveyed in the above cartoon?  The people are suffering due to corruption in government √  Government is abusing state funds √ (Accept any other correct relevant response.) (1) 2.3.2 What would indicate that social services are NOT delivered efficiently?  Decreased standard of living (condition of welfare not good, e.g. more poverty and malnutrition) √  High crime levels / more corruption√  Increased number of people without houses√  Deterioration in health conditions – no medication for sick people at clinics and government hospitals√  Deterioration in literacy and numeracy levels – more people are illiterate and have no skills. √  Social unrest increased / Looting of personal property / businesses√ (Accept any other correct relevant response.) (1) 2.3.3 Briefly describe the national budget.  The government’s planned income and expenditure for the financial year.  (2) 2.3.4 In your own opinion, how can corruption be eliminated?  To eliminate corrupt officials from parliament/public office √√  To control the abuse of state funds √√  To monitor the allocation of state tenders √√  To avoid nepotism/inefficient officials in public sectors √√ (Accept any other correct relevant response.) (2 x 1) (2) 5

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 2.3.5 How do consumers spend their income in the national economy?  Non-durable goods are goods that can be used only once e.g. petrol, matches and food. √√  Semi-durable goods are those that last for relatively short periods of time, e.g. clothing. √√  Durable goods are those that can last for relatively long periods of time and can be used many times, e.g. cars√√  Services are non-material and are used as they are produced, e.g. a haircut. √√ (Accept any relevant examples. Max of 2 marks for 4 examples listed and lower order headings, Max 2 marks) (2 x 2) (4) 2.4 Differentiate between capital widening and capital deepening? Capital widening  Occurs when the stock of capital increases at the same rate as the workforce so that production levels are maintained. √√  Capital allows economic growth to occur. √√  Economic growth occurs when the amount of capital operating in the economy increases at a rate that is equal to or higher than the increase in the number of workers in the workforce. √√ (4) Capital deepening  Occurs when the amount of capital per worker increases. √√  Stock of capital is greater than the number of workers. √√  This is especially important for economic growth. √√ (4) (Allocate a maximum of 4 marks for listing/examples) (2 x 4) (8) 2.5 In which way does the government act as the central decision-maker in a centrally planned economy?  The state is the biggest economic entity in the economy, employing vast amounts of labour (civil servants) to execute its economic policies from a central position√√  This creates a bureaucracy of “large government” √√  Private initiative and free choice of the individual is limited (socialism) or even non-existent (communism) √√  The state dictates to individuals what occupations they need to follow and which industries they need to work in√√  The state controls all resources for the mutual benefit of all citizens√√  The state performs the entrepreneurial function√√ 6

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11  The state guides the needs and wants of the consumer by providing essential goods and services for all in equal quantities√√  There is no surplus production as there is no profit incentive to do so√√ (8) (Accept any other correct relevant response) [40] (Allocate a maximum of 2 marks for listing / examples.) QUESTION 3 ECONOMIC PURSUITS 40 MARKS – 30 MINUTES 3.1 3.1.1 Name TWO social indicators related to income distribution  Lorenz curve√  Gini Coefficient√  Quintile Ratio√  Head Count Index√  Human Development Index√  Poverty line / poverty gap√ (Accept any other correct relevant response) Any (2 x 1) (2) 3.1.2 Why do you think the government should spend more on infrastructure development?  To promote economic growth√√  To reduce unemployment√√  To improve living standards√√  To reduce poverty√√  To promote industrial development√√ (1 x 2) (2) (Accept any other correct relevant response) 3.2 DATA RESPONSE 3.2.1 Identify, in the data above, the trade agreement between Africa and the United States of America.  Africa Growth and Opportunity Act (AGOA) √ (1) 3.2.2 Describe, from the above extract, the reason why some developing countries are closing the North / South gap.  Opportunities for more equal trade and capital flow. √ (1) 7

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 3.2.3 Briefly explain the trade relations between the countries in the North and South Developing countries:  Mainly export raw material to developed countries and import manufactured products from developed countries. √√ Developed countries:  Continue to subsidise production of their agricultural goods, making it difficult for developing countries to compete√√  Insisting that developing countries eliminate their tariffs on manufactured goods√√  Most developing countries have very little foreign trade.√√ (2 x 2) (4) 3.2.4 Why will the Gini-coefficient of countries in the North differ from that of countries in the South?  Countries in the North (G8 countries) have a higher per capita income due to high GDP and low unemployment√√  The Gini coefficient in the North will be closer to 0 due to more equitable distribution of income, compared to countries in the South where the Gini coefficient was closer to 1 because of an inequitable distribution of income. √√  Reasons could be: experiencing high unemployment, √ low industrialisation, √ past political policies in the South√ (Accept any other correct relevant response) (2 x 2) (4) 3.3 DATA RESPONSE 3.3.1 Identify the cost responsible for the skyrocketing of small money loans?  The initiation fee√ (1) 3.3.2 Which costs will remain constant?  The monthly service fee√ (1) 3.3.3 Describe the effect on the cost of the loan if the monthly service fee is removed?  It will decrease the cost of credit / make credit more affordable because the consumer will pay less√√ (2) 8

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 3.3.4 Calculate the total cost of credit for a R500 loan over one month.  R 25 Interest R 79 Initiation fee R 50 Monthly service fee R 154 √√ (2) 3.3.5 What impact will the high cost on small loans have on low income earners?  The cost of credit will become too expensive for poor people / unaffordable√√  Poor people will have less money to spend on goods and services / more poverty√√  Poor people will struggle to pay their loans√√  People might default on the loans and be blacklisted making access to future credit very difficult √√ (Accept any other correct relevant response) (2 x 2) (4) 3.4 Discuss the aims of Small Enterprise Development Agencies (SEDA) and the National Skills Development Strategy (NSDS) as strategies for development. Small Enterprise Development Strategy: (SEDA)  Involved with the provision of information / technology to small business. √√  Provides funding for the establishment of small business. √√  Also provides information on possible markets for small business. √√ (Accept any other correct relevant response) (Max. 4) National Skills Development Strategy: (NSDS)  The NSDS provides a framework for skills development in the workplace. √√  The aim was to develop a culture of high quality lifelong learning. √√  The NSDS further aimed to accelerate BBE empowerment and employment equity in the workplace. √√  The latest objectives are towards institutional learning, linked to occupationally directed programmes. √√ (Max. 4) (Accept any other correct relevant response) (Allocate a maximum of 4 marks for listing / examples) (2 x 4) (8) 9

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 3.5 How can investment in social (human) capital improve economic development in South Africa?  Social capital is also known as human development. √√  The labour force can undergo training and skills development which can lead to better paying employment opportunities and therefore an increase in the satisfaction of wants. √√  This will improve productivity and work ethic. √√  A well-trained labour force will assist in the increase of competitive products in markets. √√  Output can therefore increase and economic growth can expand, this will have a positive impact on economic development. √√  This can lead to job creation and higher wages and can affect the general standard of living√√ (8) (Accept any other correct relevant response) [40] (Allocate a maximum of 2 marks for listing / examples) QUESTION 4 4.1 4.1.1 Name TWO economic leakages.  Savings √  Imports √  Taxes √ (2 x 1) (2) 4.1.2 What impact does the Expanded Public Works Programme have on your local community?  Community projects are earmarked√√  Jobs are created while at the same time, community upliftment takes place√√  Poverty is alleviated√√  An income for the unemployed is provided √√ (Accept any other correct relevant response) (2) 10

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 4.2 DATA RESPONSE 4.2.1 Name the sector under which electricity, gas and water is classified.  Secondary sector √ (1) 4.2.2 Which sector contributed the most to the Gross value added at basic prices for 2015?  Tertiary sector√ (1) 4.2.3 Briefly describe the following statement: “The contribution by the primary sector has increased, but at a diminishing rate.”  The contribution of the primary sector is decreasing / natural resources are becoming depleted. √√ (2) 4.2.4 How does the primary sector contribute towards the economy?  Provides raw materials for secondary industries √√  It provides power to the economy, such as coal to Eskom √√  It stimulates economic growth in the country √√  This sector earns foreign exchange and stimulates trade √√  It contributes to the GDP of the country √√  It provides employment and training to people (skills) √√  It produces food for the people of a country √√  The state’s income is increased through taxes √√ (2) 4.2.5 What is the relationship between the secondary sector and the tertiary sector?  The secondary sector manufactures goods and services with raw materials from the primary sector. √√  The tertiary sector distributes the goods and services and initiates markets closer to the consumer for final consumption. √√ (Accept any other correct relevant answer) (2 x 2) (4) 11

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 4.3 DATA RESPONSE 4.3.1 Identify any TWO previous strategies in the information that were used to improve economic growth in South Africa.  GEAR – Growth, Employment and Redistribution√  NGP – New Growth Path√  NSDS – National Skills Development Strategy √ Any (2 x 1) (2) 4.3.2 What is the main aim of the NDP?  It provides a road map to government for 2030 / poverty relief / economic growth / economic transformation / sustainable job opportunities / income distribution √√ (2) (Accept any other correct relevant response) 4.3.3 What negative impact will the NDP have on the taxpayers?  For implementation of the NDP the state will increasingly need more revenue√√ – more and higher taxation will be needed √ √  Reduce disposable income even more √√  Higher levels of fraud and corruption affecting services to the poor √√ (Accept any other correct relevant response) (2) 4.3.4 How successful will the implementation of the NDP be in the South African economy?  Good progress has been made since 2014 in the construction of renewable energy sources √√e.g. solar farms and wind farms √  Standard of living might improve that will reduce poverty levels √√ e.g. housing, social grants √ AND / OR  Since 2014 there has been no improvement in the unemployment rate and this scenario might continue to exist √√ e.g. unemployment might increase even further √√  The gap between rich and poor might increase further √√  The following targets set out in the NDP will be difficult to reach: an economic growth rate of 5 % (currently 0,8%) job creation of 5 million per annum √√ (Accept any other correct relevant response) (2 x 2) (4) 12

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 4.4 Differentiate between economic growth and economic development. Economic growth  It focuses on the production of goods and services √√  It is the increase in the real GDP over a period of time √√  Increase in the production capacity of the country √√ (Max 4 marks) Economic development  It is the increase in the real per capita GDP √√  It focuses on the increase in living standards √√  It focuses on the society’s wellbeing √√ (Max 4 marks) (Allocate a maximum of 4 marks for listing/examples) (2 x 4) (8) 4.5 How does the South African government promote indigenous knowledge systems?  Indigenous knowledge systems in South Africa refer to the body of knowledge. √√  This body of knowledge is part of African philosophy and social practices that have evolved over many centuries. √√  The IKS (Indigenous Knowledge Systems) Policy was adopted by the Cabinet in 2004. √√  It laid the basis for recognising that indigenous knowledge continues to be very important in the survival and welfare of the majority of South Africans. √√  It recognises the importance of IKS and aims to promote and protect all aspects of this knowledge. √√  Scientists are working with indigenous communities to promote sustainable agriculture and good ecological practices. √√  IKS can also be used to reduce poverty. √√  Local-level knowledge and organisations provide the foundation for development. √√ (8) (Allocate a maximum of 2 marks for listing / examples) [40] TOTAL SECTION B: 80 13

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 SECTION C Answer ONE of the two questions from this section in the ANSWER BOOK Your essay will be assessed as follows: STRUCTURE OF ESSAY: MARK ALLOCATION Introduction The introduction is a lower-order response.  A good starting point would be to determine the main concept related to the question topic  Do not include any part of the question in your Max. 2 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 discuss / Analyse / Compare / Max. 26 Evaluate / Distinguish / Differentiate / Explain / Assess / Debate Additional part: Give own opinion / Critically discuss / Evaluate / Critically evaluate / Draw a graph and explain / Use the graph given and explain / Complete the given Max. 10 graph / Calculate / Deduce / Compare / Explain / Distinguish / Interpret / Briefly debate / How? / Suggest Conclusion Any higher-order conclusion should include A brief summary of what has been discussed without repeating facts already mentioned in the body Any opinion or value judgment on the facts discussed Max. 2 Additional support information to strengthen the discussion / analysis A contradictory viewpoint with motivation, if required Recommendation TOTAL 40 14

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 QUESTION 5: MACROECONOMICS The multiple needs of mankind are satisfied with the use of factors of production.  Discuss the economic importance of the following factors of production for the producers of goods and services: - Labour - Capital - Entrepreneurship (26 marks)  How has the land redistribution programmes (policies) contributed towards accommodating the marginalised in the economy? (10 marks) INTRODUCTION Economists often refer to the factors of production as inputs. The final product or service that is the result of the inputs is then called an output. √√ (Accept any other correct relevant introduction) (Max 2) MAIN PART THE ECONOMIC IMPORTANCE OF LABOUR  Production cannot take place without physical and mental effort √√  An economy needs to increase its production in order to grow √√  Therefore, an economy needs a suitable labour force with the right number of skilled and semi-skilled workers √√  The shortage of skilled labour, especially technically skilled labour, is thought to be one of the most serious problems in the South African labour market today √√  Many South African businesses are labour intensive, so labour costs make up a big part of production costs √√  The productivity of the labour force determines the speed with which goods are produced, the quality and the cost of the outpu t√√  If the cost of production is too high, it will push up inflation and make the price of the goods we export uncompetitive on international markets √√  Trade unions are often accused of forcing the price of wages without finding ways to improve the productivity of its members √√  However, the role of trade unions is very important in protecting employers to invest more in adult education and training √√  Education plays an important role in the development of labour in a country√√  If the labour force is educated, they are likely to be more productive √√  The Skills Development Levy Act of 1998 makes provision for 1 % of an employer’s wage bill to be paid over to the National Revenue fund √√  This money is then utilised by Sector Education training Authorities (SETA’s) to up skill our labour force √√ (Max 10 marks) 15

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 THE ECONOMIC IMPORTANCE OF CAPITAL  Economic growth is a direct result of an increase in the capital assets of a country √√  Savings create capital and a higher investment in capital goods √√  Savings are therefore the starting point for economic growth and progress√√  To increase the economic growth rate of South Africa consumer spending will have to decrease √√  The resulting savings can then be channelled to fixed investments√√  Financial institutions will have more money available to lend out to businesses to finance their expansion √√  This will result in more job opportunities and less unemployment √√  The increased income of individuals will again increase savings, and so the cycle of economic growth will continue √√  The capital translates into machinery and equipment, which is used to produce high quality goods √√  These goods raise the local standard of living by increasing the variety and choice that consumers have √√  Goods can also be exported, thus earning foreign currency and reducing our reliance on imports from other countries √√  An emerging economy like South Africa has a large demand for final consumer goods √√ (Max 10 marks) ECONOMIC IMPORTANCE OF ENTREPRENEURSHIP  Entrepreneurs play a very important role in contributing to growth and progress in any economy √√  South Africa has a very high unemployment rate √√  The formal sector cannot provide employment to all of South Africa’s population √√  Therefore entrepreneurs in the informal sector who start up small businesses, play an important role in providing income and employment √√  According to Statistics South Africa, South Africa will need approximately 200 000 to 300 000 new entrepreneurs in the next few years to maintain the current growth rate in the country √√  The role of black empowerment will play a significant role in achieving these goals √√  The success of black people (who present more than 75 % of the population of South Africa) as entrepreneurs in the economy, will eventually determine the success of future economic growth √√  The Law on Black Economic Empowerment (BEE) makes specific provision for the advancement of the black population through affirmative action in the workplace √√  Provinces will have to channel more funds into small and medium enterprises to encourage economic development √√ 16

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11  Apart from creating jobs, new entrepreneurs introduce new goods and services into markets, √√ increasing competition and reducing inflation √√  The tax revenue of the government increases as profits of entrepreneurs are taxed √√  This happens at the same time that the state has to spend less on unemployment payments and other social welfare services as wealth becomes more evenly distributed √√ (Max 10 marks) (Accept any other correct relevant response) Max (26) (Allocate a maximum of 8 marks for headings, sub-headings, examples.) ADDITIONAL PART The land redistribution programme has contributed to: The land restitution programme: √  The Act on Land Restitution allows for those people whose land was disposed of to legally claim their land back or be compensated. √√  In the case of urban claims the people are financially rewarded for their losses. √√  In situations of rural claims some land is given back to the legal owners. √√ The land redistribution programme: √  Involves the availability of agricultural land for farming production or for living. √√  The emphasis was on the provisioning of land for the poor marginalised people with land for small-scale farming to earn an income. √√ The partnership programme (farming): √  Farm workers are given certain shares (profit-sharing) options on farms. √√  The workers are also involved in joint decision-making at management level. √√  Workers also obtain permanent living rights after a certain number of years or on retirement, as well as other fringe benefits. √√ The RDP housing programme: √  Citizens with low income levels can also apply for the subsidised RDP housing scheme to provide shelter for families in need. √√  The government then subsidises the infrastructure costs, such as solar power, pre-paid meters, etc. √√ (Accept any other relevant correct answer) (Max. 10) 17

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 CONCLUSION South Africa has an abundance of natural resources, and if utilised productively and developed to its full potential our country could become a sustainable, thriving economy. (Max. 2) (Accept any other relevant conclusion) [40] QUESTION 6 ECONOMIC PURSUITS A central bank has functions and responsibilities that are not carried out by other financial institutions  Discuss the main functions of the SARB (26 marks)  What causes bank failures? (10 marks) INTRODUCTION The Central bank is an institution that issues banknotes and is responsible for controlling money supply and credit in a country in the interests of everyone √√ (Accept any other correct relevant answer) (Max. 2) MAIN PART - The bank supervises and controls all the activities of commercial banks and financial institutions √√ - All banks that operate in South Africa have to register and submit reports to the central bank √√ - Banking is a risky business and therefore the Reserve Bank as lender of last resort has to monitor them carefully √√ The SARB issues coins and banknotes√ - The SARB has the sole right to produce, issue and destroy banknotes and coins in South Africa √√ - The SA Mint Company, a subsidiary of the bank, mints all the coins on behalf of the Reserve Bank √√ - The SA Note Company, another subsidiary of the bank, prints all banknotes on behalf of the Reserve Bank √√ The SARB acts as banker to the government √ - It conducts a cheque account for the government √√ - It administers the financial accounts of the central government and provincial governments and various State-owned enterprises. √√ 18

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 The SARB acts as custodian of the cash reserves of banks√ - In terms of the Bank Act 94 of 1990, all banks are required to keep a minimum cash reserve deposited at the SARB √√ - This requirement prevents commercial banks from lending out too much money in the form of bank credit √√ It acts as a clearing bank to settle claims between banks √ - The SARB keeps accounts of the various banks √√ - The claims between banks are settled on a daily basis √√ - Clients from Bank A deposit cheques from Bank B into their accounts and these cheques have to be cleared √√ It acts as custodian of foreign reserves √ - The SARB is the custodian of the country’s reserves in gold and foreign exchange √√ - The SARB also markets the gold output of the country on international markets, paying the mining houses in a combination of Rands and dollars √√ It administers exchange control √ - The bank controls payments for exports and imports, and is responsible for the foreign exchange reserves of South Africa √√ It is a lender in the last resort √ - Should a bank require cash urgently, they can get advances from the SARB - This practice adds to stability in the banking sector √√ It is responsible for the monetary policy of the country √ - The Reserve Bank and the Department of Finance are together responsible for the monetary policy of the country √√ - This means that they control the level of credit, the money supply and the interest rates in our country √√ It issues economic reports √ - The Reserve Bank publishes statistics and information in its Quarterly Bulletin for the benefit of all parties interested in such information √√ Max (26) (Allocate a maximum of 8 marks for headings, sub-headings, examples.) 19

Downloaded from hlayiso.com MEMORANDUM ECONOMICS PAPER 1 GRADE 11 ADDITIONAL PART What cause a bank to fail?  A poor economic environment makes it difficult for banks to make a profit √√  Weak and fraudulent management √  Over-exposure to micro-lending and bad debts √√  Bad management of liquidity √√  Poor credit control (for example, not ensuring the credibility of borrowers and not monitoring loans and overdrafts carefully enough) √√  Banks fail when the SARB does not intervene √√  Banks fail when bank reserves are too low √√ (Accept any other correct relevant answer) Max (10) CONCLUSION The primary goal of the SARB is to protect the value of the Rand and to control inflation. √√ Max. 2 (Accept any other correct relevant answer) [40] TOTAL SECTION C: 40 TOTAL: 150 20