Economics Grade 10 P1 North West June 2024 Memo (English)

PROVINCIAL ASSESSMENT PROVINCIAL ASSESSMENT GRADE 10 ECONOMICS P1 MARKING GUIDELINES JUNE 2024 MARKS: 100 TIME: 1 ½ hours These marking guidelines consist of 14 pages. Copyright reserved Please turn over

Economics/P1 2 NW/June 2024 Grade 10 – Marking Guidelines SECTION A (COMPULSORY) QUESTION 1 1.1 MULTIPLE CHOICE 1.1.1 C/ What people should buy  1.1.2 A/ the economic problem  1.1.3 B/ scarcity  1.1.4 B/ household  1.1.5 D/ prosperity  (2 x 5) (10) 1.2 MATCHING ITEM 1.2.1 C/ ensures that the benefits of society`s resources are distributed fairly among society member  1.2.2 B/ the sector that manufactures and processes raw materials so that they are in a form fit for human consumption  1.2.3 A/ a process of using up an article  1.2.4 E/ the period of very high economic activity just before the economy slows down  1.2.5 D/ the economic indicator that moves the same way that the economy does  (5 x 1) (5) 1.3 GIVE ONE TERM 1.3.1 Labour  1.3.2 Relative scarcity  1.3.3 Closed economy/ three-sector economy  1.3.4 Secondary sector  1.3.5 Trough  (1 x 5) (5) TOTAL SECTION A: 20 Copyright reserved Please turn over

Economics/P1 3 NW/June 2024 Grade 10 – Marking Guidelines SECTION B Answer only ONE of the two questions in this section ANSWER BOOK QUESTION 2: MACROECONOMICS 40 MARKS 2.1 Answer the following questions: 2.1.1 List any TWO examples of injections in the economy. • Investment  • Government spending  • Exports  (2 x 1) (2) 2.1.2 Why do economists make use of models in the study of economics? • Model simplifies reality to reduce complex functions that are difficult to understand.  (1 x 2) (2) 2.2 DATA RESPONSE 2.2.1 What advice is given by the lady in the cartoon? • She advises the employer to hire an Economist.  (1) 2.2.2 Give ONE career opportunity related to Economics. • Market research analyst • Credit analyst • Financial analyst • Actuary • Economic consultant • Accountant (Accept any other relevant response) (1) 2.2.3 Briefly describe the term Economics. • A social science studies how individuals, business and other organisations choose to use resources to achieve the maximum satisfaction of their unlimited needs and wants.  (2) 2.2.4 Why is Economics considered to be a social science? • Economics is a social science that examines people’s behavior and how they interact with society.  (Accept any other correct relevant responses) (2) Copyright reserved Please turn over

Economics/P1 4 NW/June 2024 Grade 10 – Marking Guidelines 2.2.5 How does macroeconomics differ from microeconomics? Macroeconomics • Macroeconomics is the study of the total economic activity.  • It includes regional, national and international study fields.  • It focuses on the economy as a whole.  Microeconomics • Microeconomics is the study of the behavior and decisions of individual participants in the economy.  • It includes how prices are determined.  • It focuses on individuals, households, firms and other organisations.  (Accept any other relevant response). (2 x 2) (4) 2.3 DATA RESPONSE 2.3.1 Identify the method used in the table above to calculate national income. • Income method  (1) 2.3.2 Name the missing item labelled as A. • Gross value added at basic prices/GVA at basic prices.  (1) 2.3.3 Briefly describe the term subsidies on production. • Subsidies on production refer to subsidies that are not linked to specific goods or services, e.g. subsidy made on employment.  (Accept any other correct relevant response) (2) 2.3.4 How is gross domestic product converted to gross national product? • By adding primary income from the rest of the world and subtracting primary income to the rest of the world/ GDP+ primary income from the rest of the world – primary income to the rest of the world.  (2) 2.3.5 Calculate the value of gross domestic product at market prices for 2021 (B). Show ALL calculations. • 5 572 608 +633 854 -13 965 = 6 192 497 (2 x 2) (4) Copyright reserved Please turn over

Economics/P1 5 NW/June 2024 Grade 10 – Marking Guidelines 2.4 Differentiate between positive and normative statements. Positive statements Normative statements • These statements describe facts • These statements include value without making any judgement judgements or opinions by whether the facts are good or economists.  bad.  • These statements cannot be • Positive statements are proven.  concerned with what was in the past, what is today or what will • Normative statements deal with be in the future.  economic behavior and they judge the behavior whether it is • You can test positive good or bad.  statements, e.g. the rand appreciated by 2% against the • You can debate a normative dollar.  statement.  • E.g. the South African inflation rate is too high.  (Allocate a maximum of 4 marks for a mere listing of facts/ examples) (2 x 4) (8) 2.5 How can the business sector contribute more positively to the economy? The business sector can contribute more positively by: • Investing more in labour intensive projects with the focus on in-service training and skills development of workers.  • Re-investing their profits in the gross capital formation programmes equipment, tools, transportation assets and electricity.  • Expanding their business operations and investing in the latest technology to ensure an upliftment of the quality of factors of production needed for production.  • diversifying their business operations by bringing in a differentiated product offering within or outside the range they produce.  • Supporting South African businesses in terms of procuring raw materials and increase the market share for South African produced goods and services locally and abroad.  • Ensuring the existence of sound business principles towards a long-term involvement in the economy leading to a positive economic growth rate.  • Using loans to invest in capital goods like machinery, to ensure mass production at a lower cost thus improving their competitiveness.  • (Accept any other correct higher order response) (4 X 2) (8) (Allocate a maximum of 2 marks for a mere listing of facts/ examples) [40] Copyright reserved Please turn over

Economics/P1 6 NW/June 2024 Grade 10 – Marking Guidelines QUESTION 3: MACROECONOMICS 40 MARKS 3.1 Answer the following questions: 3.1.1 List any TWO types of pollution. • Water pollution  • Land pollution  • Air pollution  • Noise pollution  (Accept any other correct relevant response) (2 x 1) (2) 3.1.2 What happens during the depression phase? • During a depression money is in short supply, leading to a further decline in spending and there is a negative impact on investment spending.  (1 x 2) (2) 3.2 DATA RESPONSE 3.2.1 Identify the human right violated in the above cartoon • Child labour  (1) 3.2.2 What is the legal age for one to be considered for formal employment? From 18 years of age  (1) 3.2.3 Briefly describe the term human rights. • Human rights are that its generally thought every person should have.  (2) 3.2.4 How can local communities contribute to a cleaner environment? • Local communities should avoid dumping of waste in undesignated areas.  • Local communities should be encouraged to recycle products.  • Avoid the unnecessary burning of waste.  • Avoid the unnecessary cutting of tress.  (Accept any other correct relevant responses) (2) 3.2.5 How can the government help to intervene in protection of human rights? • By enforcing laws through courts, setting policies that most directly to impact people’s lives.  • Government should constantly monitor human rights.  • Through awareness’s and campaigns.  (Accept any other correct relevant responses) (2 x 2) (4) Copyright reserved Please turn over

Economics/P1 7 NW/June 2024 Grade 10 – Marking Guidelines 3.3 DATA RESPONSE 3.3.1 Identify the final product in the picture above. • Bread  (1) 3.3.2 Name the economic sector that is responsible for the extraction of raw materials from nature. • Primary sector  (1) 3.3.3 Briefly describe the term consumer goods. • Consumer goods are goods that are used or consumed by individuals or households to satisfy their needs.  (2) 3.3.4 Explain the positive impact of labour intensive towards the economic activity. • It is a manual labour that is predominantly used in the production process and with less machinery used that is good for South Africa because it will generate more employment.  (2) (Accept any other correct relevant response) 3.3.5 How does the informal sector differ from formal sector in our economy? Informal sector: • The informal sector is businesses which are not legally registered and their production is not recorded in the GDP figures of the country.  Formal sector: • The formal sector is businesses which are legally registered, and their production is recorded in GDP figures of the country.  (Accept any other correct relevant response.) (2 x 2) (4) 3.4 Differentiate between free goods and economic goods. Free goods • Are useful to people and they satisfy important needs and wants, but they are not scarce.  • They are gifts of nature and there is an abundant supply  e.g. fresh air, sunshine and sea water  • These goods do not belong to anybody/are not owned by anyone • Although they have utility, they have no commercial value/exchange value  Economic goods • Are goods that are produced scarce resources  • They are scarce  • They can command a price in the market and are owned by somebody  • They have utility and value  Copyright reserved Please turn over

Economics/P1 8 NW/June 2024 Grade 10 – Marking Guidelines • Economic goods are also referred to as scarce goods (Accept any other correct relevant response) (2 x 4) (8) (Allocate a maximum of 4 marks for a mere listing of facts/ examples) 3.5 Analyse the importance of the secondary sector in the economy? • It contributes a lot towards the GDP that increases our production capacity.  • Create job opportunities that leads to factories and other secondary industries provide thousands of jobs for a range of skills levels. Example unskilled labour (e.g., cleaners) and skilled workers (e.g., engineers)  • Ensures economic independence that regards SA as a giant in Africa.  • Earns foreign exchange because sector is diverse and many of our industrial outputs are exported.  • It serves as an important area for investment because it requires expensive machinery and equipment.  • Gives strategic importance in Africa as SA has necessary minerals and infrastructure to play important role of development.  (Accept any other relevant answer.) (2 x 4) (8) (Allocate a maximum of 2 marks for a mere listing of facts/ examples) [40] TOTAL SECTION B: 40 Copyright reserved Please turn over

Economics/P1 9 NW/June 2024 Grade 10 – Marking Guidelines SECTION C Answer any ONE of the two questions in this section in the ANSWER BOOK. QUESTION 4: MACROECONOMICS 40 MARKS • Discuss in detail the role of the FOUR markets in a circular flow of an open economy. (26 Marks) • Why is an increase in injections important for the South African economy? (10 Marks) INTRODUCTION The circular flow is a simplified economic model that illustrates the inter- relationship between the economic participants  OR A market is a mechanism that brings buyers and sellers together to exchange different types of products  (Accept any other correct relevant introduction) (Max. 2) BODY: MAIN PART FOUR TYPES OF MARKETS IN THE CIRCULAR FLOW (a) Product/Goods market  • Product market is where goods and services are bought and sold  • Firms, government and foreign sector supply goods and services and their movement is called real flow  • Consumers, firms, government and foreign sector buy goods and services and their payments represent money flow  • Goods are defined as any tangible items such as food, clothing and cars that satisfy some human needs  • In capital goods market products such as buildings and machinery are exchanged  • Consumer goods market involves the trading of durable consumer goods, semi- durable consumer goods and non-durable consumer goods  • Services are defined as non-tangible actions and includes wholesale and retail, transport and financial markets  (b) Factor/Resources/Input market  • Factor market is where factors of production are exchanged,  e.g. the labour market, property market and the financial markets  • Households are the owners of factors of production and they sell them to firms to produce goods and services  • The factors of production are labour, entrepreneurship, capital and land and they are exchanged for wages, profit, interest, and rent respectively  • Factor services are real flows and they are accompanied by counter flows of income on the factor market  Copyright reserved Please turn over

Economics/P1 10 NW/June 2024 Grade 10 – Marking Guidelines (c) Financial markets  • Financial markets render financial services to the other participants in the economy by gathering surplus funds and lending them to those who needs funding  • Banks, insurance companies and pension funds form part of the financial market  • Financial markets are not directly involved in production of goods and services, but act as a link between households and businesses with surplus income and other participants who require it  Money market  • The money market is the market for short-term and very short-term savings and loans  • The South African Reserve Bank (SARB) is a key institution in the money market  • The SARB administers the function of legislating and managing the money market  • Money market includes inter-bank lending for a period as short as overnight  • The securities traded include short term deposits, short term debentures and treasury bills  Capital market  • The capital market is the market for long-term savings and loans  • The Johannesburg Securities Exchange (JSE) is a key institution in the capital market  • The securities traded in this market are long term deposits, mortgage bonds and shares  (d) Foreign exchange market  • The foreign exchange market is a multi-national market where currencies of all the countries are traded,  e.g. The South African rand can be exchanged for the US dollar  • The foreign exchange market originates when one country imports goods from another country and domestic currency have to be exchanged in order to pay for such imports  • Foreign exchange can be bought and sold at the banks and foreign exchange agencies  • The South African rand is freely traded in the forex markets and its value is determined by the market forces of demand and supply  (Accept any other correct relevant response) (Allocate a max of 8 marks for headings/subheadings/examples) (Max 26) Copyright reserved Please turn over

Economics/P1 11 NW/June 2024 Grade 10 – Marking Guidelines ADDITIONAL PART • Increase in investments will expand the tax base thereby increasing tax revenue for the government  • The government's capacity to develop infrastructure such as energy and transport will increase  • Establishment of new businesses and infrastructure development projects will create more employment  • Consumer spending may increase as households receive more income leading to an increase in aggregate demand  • Increase in government expenditure on welfare payments and social development improves the standard of living especially for the poor people  • Increase in government spending in the form providing subsidies and incentives to businesses will encourage production of more goods and services  • Increase in subsidies may reduce the cost of production which will reduce inflation in the economy  • Increase in South African exports may result in the appreciation of the rand which will reduce the cost of importing production inputs such as oil  • Increase in export production contribute to an increase in the real GDP of the country  • Balance of payments problems may decrease as the trade balance increases due to an increase in exports  • Through the multiplier process, the country's national income will increase by a bigger margin  (Accept any other correct relevant response) (Max 10) (Allocate a maximum of 2 marks for a mere listing of facts/ examples) CONCLUSION Markets ensure availability of consumer goods and services to households and government while allowing businesses access to factors of production.  (Accept any other relevant higher order conclusion.) (Max 2) [40] Copyright reserved Please turn over

Economics/P1 12 NW/June 2024 Grade 10 – Marking Guidelines QUESTION 5: MACROECONOMICS 40 MARKS • Discuss in detail the features of business cycles. (26 Marks) • Explain how endogenous (Keynesian) factors influence economic fluctuation. (10 Marks) INTRODUCTION Business cycles can be described as successive periods of contraction and expansion in the level of economic activities.  (Accept any other correct relevant introduction) (Max. 2) BODY: MAIN PART LEADING INDICATORS  • Leading indicators are indicators that change before the economy changes  • Leading indicators give consumers, business leaders and policy makers a glimpse (advance warnings) of where the economy might be heading.  These indicators peak before a business cycle has reached a peak.  • Most important type of indicator in helping economists to predict what the economy will be like in the future.  • When these indicators rise, the level of economic activities will also rise in a few months' time.  • When they decline it also means the level of economic activity will decline in the near future  • Examples: include the number of residential plans passed, number of job advertisements, number of new companies  COINCIDENT INDICATORS  • Coincident indicators are indicators that change at the same time as the economy changes  • Coincident indicators show the actual state of the economy.  • A downturn is shown by a decrease in these indicators while an upswing is shown as an increase in these indicators  • Coincident indicators confirm the changes predicted by the leading indicators.  • The value of retail sales will reach a peak and then begin to decline at the same time as the business cycle.  • Examples: are usage of capacity in manufacturing, registered unemployment, real GDP.  LAGGING INDICATORS  • Lagging indicators change after the economy has already changed  • Lagging indicators reach the turning point after the business cycle has already turned  Copyright reserved Please turn over

Economics/P1 13 NW/June 2024 Grade 10 – Marking Guidelines • Lagging indicators serve to confirm the behaviour of co-incident indicators  • Examples: number of commercial vehicles sold, real investment in machinery, unit labour costs in manufacturing COMPOSITE INDICATORS  • Composite indicators summarise a group of indicators of the same type into a single value • The single figure forms a norm for a country’s economic performance  • Composite indicators can be consolidated into single values of a composite leading, coincident and lagging indicator.  AMPLITUDE • It is the difference between the value of total output between peak and trough measured from the trend line to the peak and trough  • Amplitude reflects the intensity of the upswing and downswing in economic activity  • The amplitude shows two things: -The power of the underlying forces such as interest rates, exports or consumer spending.  A large amplitude during the upswing signifies strong underlying forces.  The duration of a cycle with larger amplitude is usually longer than one with a small amplitude  - The extent of change such a decrease in unemployment of 50% or increase in inflation of 100% during the upswing  The larger the amplitude, the more extreme the changes that may occur.  TREND LINE  • The trend line indicates the general direction in which the economy is moving  • When the economy is growing, there is an upward trend, but when the economy is contracting there is a downward trend  • The trend will change when the time series data change their behavioural patterns of the past • The trend line normally has a positive slope because the production capacity of the economy increases over time LENGTH/DURATION OF A CYCLE  • Length is measured from peak to peak or from trough to trough • Longer cycles show strength and shorter cycles show weakness with regard to economic activities • Cycles may overshoot which means that whenever activity in terms of some composite indicators increase to beyond its normal level  • The contraction in the growth of output may overshoot the level where it should naturally stop.  Copyright reserved

Economics/P1 14 NW/June 2024 Grade 10 – Marking Guidelines EXTRAPOLATION  • Extrapolation refers to the estimation of something unknown from the facts that are known  • Past data is used when predictions are made about the future based on assumptions related to trends  • Extending a trend into the future may provide information on what is likely to happen  • Economists may predict that the economy will grow in few months to come if a business cycle has passed through a trough and entered into an upswing  • Extrapolation techniques are sometimes used to predict future share prices  MOVING AVERAGES  • They are calculated along the time series so that a smoother business cycle can be established.  • Moving averages are used to analyse the changes in a series of data over a certain period of time.  • Economists use moving averages to eliminate the effect of sharp fluctuation in the business cycle  (Accept any other correct relevant response) (Max 26) (A maximum of 8 marks may be allocated for mere listing of headings/examples) ADDITIONAL PART • They are factors that are part of the economic system.  • The expansion phase contains mechanisms that eventually cause a contraction of economic activity.  • As the level of economic activity increases, total spending in the economy increases as well.  • This causes an increase in imports which negatively affects the balance of payments and leads to a depreciation of the exchange rate.  • Increased borrowing leads to increase in interest rates (negative effect on the economy).  • Positive perceptions of the economy will lead to an increase in spending and vice versa.  (Accept any other correct relevant response) (Max 10) ( A maximum of 2 marks may be allocated for mere listing of facts/examples) CONCLUSION • The country can be enabled to prepare suitable policies to deal with different changes in the economy reflected by the indicators and features.  (Accept any other correct relevant higher order conclusion) (Max 2) [40] GRAND TOTAL: 100 Copyright reserved