# Economics Grade 10 Paper 1 November Mock 2026 Memo (English) > Grade 10 Economics Paper 1 memorandum from the November Mock Exam 2026 (English), 17 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/grade-10-economics-2026-november-mock-exam-memorandum-paper-1/aa451ed3-608a-4b51-901a-d63eec037da7 - Updated: 2026-10-29 - Subject: Economics - Grade: Grade 10 - Language: English - Document type: Memorandum - Year: 2026 - Exam period: November Mock Exam - Paper: 1 - Publisher: Hlayiso - Curriculum: CAPS - Pages: 17 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 10](https://www.hlayiso.com/library/grade-10) › [Economics](https://www.hlayiso.com/library/grade-10/economics) › [Economics Grade 10 Paper 1 November Mock 2026 Memo (English)](https://www.hlayiso.com/library/grade-10-economics-2026-november-mock-exam-memorandum-paper-1/aa451ed3-608a-4b51-901a-d63eec037da7) ## About this document Economics · Grade 10 · November Mock Exam · 2026 · English. Memorandum, 17 pages. Read online or download the PDF. Read it free online on the page above; download the PDF from there. ## Document text Text extracted from the PDF. Layout, diagrams and tables may not survive extraction. ### Page 1 hlayiso mock exams Practice Series: Grade 10 Exam Preparation WWW.HLAYISO.COM NATIONAL SENIOR CERTIFICATE GRADE 10 ECONOMICS P1 NOVEMBER EXAMINATION 2026 (MOCK) MARKING GUIDELINES MARKS: 150 These marking guidelines consist of 17 pages. Copyright reserved Please turn over ### Page 2 Economics/P1 2 Hlayiso/Mock 2026 NSC – Marking Guidelines PRINCIPLES FOR MARKING ECONOMICS (HLAYISO MOCK 2026) • Mark ALL responses in the candidate’s script, whether correct or incorrect. • Where a candidate gives more responses than required: in Section A mark the FIRST response only; in 2.1.1, 3.1.1 and 4.1.1 mark the first TWO responses only; in Sections B and C (choice questions) mark only the required number of questions and write EXTRA on any additional question. • Use ONE tick (✓) for each mark awarded, placed at the fact being credited. Use a neat cross for incorrect responses. • One-word answers are acceptable for: list, name, state, identify. FULL sentences are required for: describe, explain, evaluate, analyse, suggest, differentiate, distinguish, define, discuss, why, how. The words provide, what, tabulate, identify and give are read in context. • Calculations: 3 marks for the method/workings and 1 mark for the correct final answer. • Accept responses that are correct and relevant but expressed differently. Spelling errors are not penalised if the meaning is clear. • In multiple-choice questions, accept the correct answer written in words instead of the letter. • Record the sub-total of each sub-question in the right margin and transfer question totals to the cover of the answer book. Copyright reserved Please turn over ### Page 3 Economics/P1 3 Hlayiso/Mock 2026 NSC – Marking Guidelines SECTION A (COMPULSORY) QUESTION 1 30 MARKS – 20 MINUTES 1.1 MULTIPLE-CHOICE QUESTIONS 1.1.1 B – macroeconomics ✓✓ 1.1.2 C – durable ✓✓ 1.1.3 B – factor income ✓✓ 1.1.4 C – peak ✓✓ 1.1.5 B – leakages ✓✓ 1.1.6 C – gold ✓✓ 1.1.7 B – mortality (death) rate ✓✓ 1.1.8 C – unemployed ✓✓ (8 x 2) (16) 1.2 MATCHING ITEMS 1.2.1 C – the study of the economic behaviour of individual units such as households and firms ✓ 1.2.2 F – goods that are available in unlimited quantities and have no price, e.g. sunlight ✓ 1.2.3 A – a market in which the factors of production, e.g. labour, are bought and sold ✓ 1.2.4 H – causes of business cycles that originate outside the market system, e.g. droughts and wars ✓ 1.2.5 B – measures taken by countries to put pressure on another country to change unacceptable policies ✓ 1.2.6 G – the replacement of human and animal labour by machines in the production process ✓ 1.2.7 I – all people of working age who are either employed or unemployed ✓ 1.2.8 D – a decline in real GDP for two or more consecutive quarters ✓ (8 x 1) (8) 1.3 GIVE THE TERM 1.3.1 Ceteris paribus ✓ 1.3.2 Capital goods ✓ 1.3.3 Open economy ✓ 1.3.4 Amplitude ✓ 1.3.5 Colonialism/Imperialism ✓ 1.3.6 Census ✓ (6 x 1) (6) [30] TOTAL SECTION A: 30 Copyright reserved Please turn over ### Page 4 Economics/P1 4 Hlayiso/Mock 2026 NSC – Marking Guidelines SECTION B QUESTION 2: MACROECONOMICS 40 MARKS – 30 MINUTES 2.1.1 Name any TWO factors of production. • Natural resources (land) ✓ • Labour ✓ • Capital ✓ • Entrepreneurship ✓ (2 x 1) (2) 2.1.2 Why is opportunity cost important when economic choices are made? Because resources are scarce, every choice means giving up the next best alternative; knowing the opportunity cost helps people and businesses to choose the option that gives the greatest benefit ✓✓ (Accept any other correct relevant response) (1 x 2) (2) 2.2.1 Identify the flow labelled A. Factor income/remuneration for factors of production (rent, wages, interest and profit) paid to households ✓ (1) 2.2.2 Name the market labelled B. Goods market/Product market/Market for goods and services ✓ (1) 2.2.3 Briefly describe the term real flow. The flow of goods and services and of factors of production between the participants in the economy (moving in the opposite direction to money flows) ✓✓ (Accept any other correct relevant response) (2) 2.2.4 Explain why the economy in the diagram is regarded as a closed economy. The foreign sector is not included, i.e. there are no exports or imports between the economy and the rest of the world ✓✓ (Accept any other correct relevant response) (2) Copyright reserved Please turn over ### Page 5 Economics/P1 5 Hlayiso/Mock 2026 NSC – Marking Guidelines 2.2.5 How does the government take part in the circular flow of the economy? • It collects taxes (e.g. income tax, company tax, VAT) from households and firms ✓✓ • It pays grants and other transfer payments to households, e.g. old-age pensions and child support grants ✓✓ • It buys goods and services from firms in the goods market, e.g. medicine, textbooks and vehicles ✓✓ • It buys factors of production in the factor market, e.g. it pays salaries to teachers, nurses and police officers ✓✓ • It provides public goods and services, e.g. roads, education and health care ✓✓ • It pays subsidies to firms ✓✓ (Accept any other correct relevant response) (2 x 2) (4) 2.3.1 Identify the capital good that Thandeka is thinking of buying. (Second-hand) refrigerator ✓ (1) 2.3.2 Name the basic economic problem that Thandeka faces. Scarcity (limited resources and unlimited wants)/Choice ✓ (1) 2.3.3 Briefly describe the term opportunity cost. The value (cost) of the next best alternative that is given up (forgone) when a choice is made ✓✓ (Accept any other correct relevant response) (2) 2.3.4 Explain Thandeka’s opportunity cost if she buys the refrigerator. Her opportunity cost is the bookkeeping course that she gives up, i.e. the better money-management skills she would have gained in the long run ✓✓ (Accept any other correct relevant response) (2) 2.3.5 How can small business owners like Thandeka make the best use of their scarce resources? • By comparing the costs and benefits of different options before making a choice ✓✓ • By keeping proper records of income and expenses so that money is not wasted ✓✓ • By buying stock in bulk or in groups (co-operatives) to reduce costs ✓✓ • By selling products that are in high demand in the community ✓✓ • By saving part of their profits to invest in the business later ✓✓ • By using free or low-cost training and support from government agencies, e.g. small business development agencies ✓✓ (Accept any other correct relevant response) (2 x 2) (4) Copyright reserved Please turn over ### Page 6 Economics/P1 6 Hlayiso/Mock 2026 NSC – Marking Guidelines 2.4 Distinguish between microeconomics and macroeconomics. Microeconomics ✓ • Microeconomics studies the economic behaviour of individual units, such as households, firms and individual markets ✓✓ • It deals with topics such as the demand and supply of a single product, prices in individual markets and the costs and revenue of a firm ✓✓ • It examines how individual consumers and producers make choices about the use of scarce resources ✓✓ • It is sometimes referred to as the “worm’s eye” view of the economy ✓✓ (Max. 4) Macroeconomics ✓ • Macroeconomics studies the economy as a whole (national aggregates) ✓✓ • It deals with topics such as total production (GDP), economic growth, unemployment, inflation and business cycles ✓✓ • It examines the role of government policy (fiscal and monetary policy) in the economy ✓✓ • It is sometimes referred to as the “bird’s eye” view of the economy ✓✓ (Max. 4) (Accept any other correct relevant response) (A maximum of 4 marks may be allocated for mere listing of facts/examples) (2 x 4) (8) Copyright reserved Please turn over ### Page 7 Economics/P1 7 Hlayiso/Mock 2026 NSC – Marking Guidelines 2.5 How do leakages from the circular flow affect the level of economic activity in a country? • Leakages (savings, taxes and imports) withdraw money from the circular flow, so less money is spent on locally produced goods and services ✓✓ • When households save more, consumption spending falls and firms sell less ✓✓ • Higher taxes reduce the disposable income of households and the profits of firms, which reduces spending and investment ✓✓ • Spending on imports creates income and jobs in other countries instead of in the domestic economy ✓✓ • Firms that sell less reduce production and may retrench workers, which increases unemployment ✓✓ • If leakages are greater than injections, the circular flow becomes smaller and the economy contracts ✓✓ • However, savings can be borrowed by firms for investment and taxes finance government spending, so leakages can return to the flow as injections ✓✓ (Accept any other correct relevant response) (A maximum of 2 marks may be allocated for mere listing of facts/examples) (4 x 2) (8) [40] Copyright reserved Please turn over ### Page 8 Economics/P1 8 Hlayiso/Mock 2026 NSC – Marking Guidelines QUESTION 3: ECONOMIC PURSUITS 40 MARKS – 30 MINUTES 3.1.1 Name the TWO minerals that started the mineral revolution. • Diamonds ✓ • Gold ✓ (2 x 1) (2) 3.1.2 Why is a population census important for government planning? It provides accurate information about the size, composition and distribution of the population, so that the government can plan how many schools, clinics, houses and other services are needed and where ✓✓ (Accept any other correct relevant response) (1 x 2) (2) 3.2.1 Identify the stage in which both rates are high. Stage 1 ✓ (1) 3.2.2 What does the gap X represent? Natural population growth (natural increase) ✓ (1) 3.2.3 Briefly describe the term life expectancy. The average number of years that a person born in a particular year is expected to live ✓✓ (Accept any other correct relevant response) (2) 3.2.4 Explain why the death rate falls sharply during stage 2. Improvements in medical care, vaccinations, clean water, sanitation and food supply (nutrition) mean that fewer people die from diseases and hunger ✓✓ (Accept any other correct relevant response) (2) 3.2.5 How can a rapidly growing population slow down economic development? • The government must spend more on basic services (schools, clinics, housing) just to keep up, leaving less money for development projects ✓✓ • If the population grows faster than the economy, income per person (per capita) falls ✓✓ • The number of job seekers grows faster than the number of jobs, which increases unemployment ✓✓ • A high dependency ratio (many children) means that a small number of workers must support many dependants ✓✓ • Pressure on natural resources, e.g. land and water, increases, which may damage the environment ✓✓ • Informal settlements and overcrowding increase in cities ✓✓ (Accept any other correct relevant response) (2 x 2) (4) Copyright reserved Please turn over ### Page 9 Economics/P1 9 Hlayiso/Mock 2026 NSC – Marking Guidelines 3.3.1 Give ONE example of a person who is not economically active. • Full-time students/learners ✓ • Homemakers ✓ • Retired people/pensioners (under 65) ✓ • People who are ill or have disabilities and are unable to work ✓ • Discouraged work seekers ✓ • People who choose not to work ✓ (Accept any other correct relevant response) (1) 3.3.2 Identify the number of discouraged work seekers. 3 400 000 (3 400 thousand) ✓ (1) 3.3.3 Briefly describe the term labour force participation rate. The percentage of the population of working age (15–64 years) that is economically active, i.e. either employed or unemployed ✓✓ (Accept any other correct relevant response) (2) 3.3.4 Explain why discouraged work seekers are not included in the official unemployment rate. The official (strict/narrow) definition only counts people who are actively looking for work; discouraged work seekers want to work but have stopped looking, so they are classified as not economically active ✓✓ (Accept any other correct relevant response) (2) 3.3.5 Calculate the official unemployment rate of Country K. Labour force = employed + unemployed = 16 800 + 7 200 = 24 000 (thousand) ✓ unemployed 100 Unemployment rate = × labour force 1 7 200 100 = × ✓✓ 24 000 1 = 30% ✓ (4) Copyright reserved Please turn over ### Page 10 Economics/P1 10 Hlayiso/Mock 2026 NSC – Marking Guidelines 3.4 Briefly discuss push factors and pull factors as causes of migration. Push factors ✓ • Push factors are conditions in rural areas that force people to leave ✓✓ • A lack of jobs and low incomes in rural areas ✓✓ • Poor or no access to services such as health care, schools, water and electricity ✓✓ • Droughts, crop failures and a shortage of fertile land ✓✓ • Mechanisation of farming, which replaces farm workers ✓✓ (Max. 4) Pull factors ✓ • Pull factors are conditions in urban areas that attract people to the cities ✓✓ • Better job opportunities and higher wages in industry and services ✓✓ • Better access to education, health care and other services ✓✓ • Better infrastructure, e.g. electricity, running water and public transport ✓✓ • Entertainment and a perceived better lifestyle in cities ✓✓ (Max. 4) (Accept any other correct relevant response) (A maximum of 4 marks may be allocated for mere listing of facts/examples) (2 x 4) (8) 3.5 How can education and training improve the quality of the South African labour force? • Better schooling, especially in mathematics, science and literacy, gives workers the basic skills that employers need ✓✓ • Technical and Vocational Education and Training (TVET) colleges train artisans such as electricians and plumbers, for whom there is a shortage ✓✓ • Learnerships and apprenticeships offered through SETAs give workers on-the-job experience ✓✓ • Bursaries and student funding (e.g. NSFAS) enable more young people to obtain tertiary qualifications ✓✓ • Skilled workers are more productive, which increases output and wages ✓✓ • Training in new technology helps workers to adapt to structural changes in the economy ✓✓ • Entrepreneurship training enables people to start their own businesses and create jobs ✓✓ (Accept any other correct relevant response) (A maximum of 2 marks may be allocated for mere listing of facts/examples) (4 x 2) (8) [40] Copyright reserved Please turn over ### Page 11 Economics/P1 11 Hlayiso/Mock 2026 NSC – Marking Guidelines QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS 40 MARKS – 30 MINUTES 4.1.1 Name any TWO injections into the circular flow. • Investment (by firms) ✓ • Government spending ✓ • Exports ✓ (2 x 1) (2) 4.1.2 Why did many black South Africans become migrant labourers on the mines in the late 1800s? Colonial authorities imposed taxes (e.g. hut tax and poll tax) that had to be paid in cash, and many people had lost land and cattle, so they had to earn wages on the mines ✓✓ (Accept any other correct relevant response) (1 x 2) (2) 4.2.1 Identify the phase of the business cycle at point B. Trough ✓ (1) 4.2.2 Name ONE exogenous cause of business cycles. • Weather conditions, e.g. droughts and floods ✓ • Wars ✓ • Pandemics, e.g. COVID-19 ✓ • Technological changes/innovations ✓ • Sharp changes in the oil price ✓ • Political events/changes in government policy ✓ (Accept any other correct relevant response) (1) 4.2.3 Briefly describe the term business cycle. The recurring (successive) periods of increasing (expansion) and decreasing (contraction) economic activity over time ✓✓ (Accept any other correct relevant response) (2) 4.2.4 Explain why unemployment usually increases during a downswing. During a downswing spending and sales decrease, so firms cut back on production and retrench workers or stop hiring new workers ✓✓ (Accept any other correct relevant response) (2) 4.2.5 Calculate the amplitude of the business cycle from point B to point C. Amplitude = value at peak C – value at trough B = 3,5% – (–1,5%) ✓ ✓ ✓ = 5 percentage points (5%) ✓ (4) 4.3.1 Identify the province that attracts the most migrants. Gauteng ✓ (1) Copyright reserved Please turn over ### Page 12 Economics/P1 12 Hlayiso/Mock 2026 NSC – Marking Guidelines 4.3.2 Name ONE problem in cities caused by rapid urbanisation. • Growth of informal settlements/housing shortages ✓ • A lack of running water and sanitation ✓ • Overcrowded schools and clinics ✓ • Traffic congestion/pressure on public transport ✓ • Unemployment and crime ✓ • Pollution ✓ (Accept any other correct relevant response) (1) 4.3.3 Briefly describe the term urbanisation. The increase in the proportion (percentage) of a country’s population that lives in towns and cities (urban areas) ✓✓ (Accept any other correct relevant response) (2) 4.3.4 Explain how rural areas are negatively affected when young people move to the cities. Rural areas lose their young, economically active and often better-educated people, so fewer people are left to farm and work, production falls and mostly children and older people remain behind ✓✓ (Accept any other correct relevant response) (2) 4.3.5 How can the government reduce the negative effects of rapid urbanisation? • By promoting rural development, e.g. supporting small-scale farmers, so that fewer people need to leave rural areas ✓✓ • By building low-cost (subsidised) housing and upgrading informal settlements with water, sanitation and electricity ✓✓ • By encouraging firms to locate in smaller towns and rural areas through incentives, e.g. special economic zones ✓✓ • By improving public transport so that people can live further from city centres ✓✓ • By improving services (schools, clinics) in rural areas ✓✓ • By better urban planning and budgeting by municipalities ✓✓ (Accept any other correct relevant response) (2 x 2) (4) Copyright reserved Please turn over ### Page 13 Economics/P1 13 Hlayiso/Mock 2026 NSC – Marking Guidelines 4.4 Briefly discuss the economic activities of hunter-gatherers and pastoralists in pre-colonial South Africa. Hunter-gatherers (e.g. the San) ✓ • They obtained food by hunting wild animals and gathering wild plants, roots, berries and honey ✓✓ • They lived in small groups and moved from place to place (nomadic), following animals and the seasons ✓✓ • They used simple tools, e.g. bows and poisoned arrows, digging sticks and stone tools ✓✓ • They produced only enough for their own needs (subsistence) and shared food within the group, with little private property ✓✓ (Max. 4) Pastoralists (e.g. the Khoikhoi) ✓ • They kept herds of cattle, sheep and goats, which provided milk, meat and skins ✓✓ • They moved with their herds to find grazing and water (semi-nomadic) ✓✓ • Livestock was a measure of wealth and status ✓✓ • They exchanged (bartered) livestock and other products with neighbouring groups and later with European settlers ✓✓ (Max. 4) (Accept any other correct relevant response) (A maximum of 4 marks may be allocated for mere listing of facts/examples) (2 x 4) (8) 4.5 How can the government reduce the negative effects of a recession on the economy? • By increasing government spending, e.g. on infrastructure projects, which creates jobs and income (expansionary fiscal policy) ✓✓ • By reducing taxes, which increases the disposable income of households and the profits of firms ✓✓ • The South African Reserve Bank can lower the repo rate so that borrowing becomes cheaper and spending increases (expansionary monetary policy) ✓✓ • By expanding public employment programmes, e.g. the Expanded Public Works Programme (EPWP) ✓✓ • By paying unemployment insurance benefits (UIF) and social grants that support the incomes of affected households ✓✓ (Accept any other correct relevant response) (A maximum of 2 marks may be allocated for mere listing of facts/examples) (4 x 2) (8) [40] TOTAL SECTION B: 80 Copyright reserved Please turn over ### Page 14 Economics/P1 14 Hlayiso/Mock 2026 NSC – Marking Guidelines SECTION C QUESTION 5: MACROECONOMICS 40 MARKS – 40 MINUTES Discuss in detail the participants (sectors) in the circular flow of a closed economy and the markets through which they interact. (26 marks) How can an increase in government spending affect the level of economic activity? (10 marks) INTRODUCTION The circular flow is a model that shows the continuous movement of goods and services, factors of production (real flows) and money (money flows) between the participants in the economy. ✓✓ (Accept any other correct relevant introduction) (Max. 2) BODY: MAIN PART Participants (sectors) Households ✓ • Households are the owners of the factors of production (natural resources, labour, capital and entrepreneurship) ✓✓ • They supply factors of production to firms in the factor market and receive factor income (rent, wages, interest and profit) ✓✓ • They use their income to buy consumer goods and services from firms in the goods market (consumption spending) ✓✓ • They pay taxes to the government and receive transfer payments, e.g. social grants ✓✓ • Part of their income is saved in financial institutions ✓✓ Firms (businesses) ✓ • Firms buy (hire) factors of production from households in the factor market ✓✓ • They combine the factors of production to produce goods and services ✓✓ • They sell goods and services in the goods market and receive sales revenue ✓✓ • They pay taxes, e.g. company tax, to the government and may receive subsidies ✓✓ • They borrow savings from financial institutions to invest in capital goods ✓✓ Government (public sector) ✓ • The government collects taxes from households and firms ✓✓ • It buys goods and services from firms and hires factors of production, e.g. it employs teachers and nurses ✓✓ • It provides public goods and services, e.g. roads, defence, education and health care ✓✓ • It pays transfer payments (grants) to households and subsidies to firms to redistribute income ✓✓ • It regulates the economy through laws and policies ✓✓ Markets Goods (product) market ✓ • Final goods and services are bought and sold, e.g. food, clothing and transport services ✓✓ • Households and the government are the buyers; firms are the sellers ✓✓ Factor market ✓ • The factors of production are bought and sold, e.g. the labour market ✓✓ • Households are the sellers and firms and the government are the buyers ✓✓ Copyright reserved Please turn over ### Page 15 Economics/P1 15 Hlayiso/Mock 2026 NSC – Marking Guidelines Financial market ✓ • Savings of households and firms are channelled to borrowers through banks and other financial institutions ✓✓ • It includes the money market (short-term funds) and the capital market (long-term funds, e.g. shares and bonds) ✓✓ (Accept any other correct relevant response) (A maximum of 8 marks may be allocated for headings/examples) (Max. 26) ADDITIONAL PART • Government spending is an injection into the circular flow, which increases total spending (aggregate demand) in the economy ✓✓ • Firms that receive government orders increase production and employ more workers ✓✓ • Newly employed workers earn incomes and spend more, so the income of other firms also increases (multiplier effect) ✓✓ • Spending on infrastructure, e.g. roads and electricity, lowers the costs of firms and encourages investment ✓✓ • Higher incomes increase the tax revenue of the government ✓✓ • However, if the spending is financed by higher taxes, the disposable income of households falls, which reduces the positive effect ✓✓ • If the spending is financed by borrowing, government debt and interest payments increase ✓✓ • If the economy is already near full capacity, more spending may lead to inflation rather than more production ✓✓ (Accept any other correct relevant response) (A maximum of 2 marks may be allocated for mere listing of facts/examples) (Max. 10) CONCLUSION All participants in the circular flow are interdependent: the spending of one participant is the income of another, so a change in the behaviour of any participant affects the level of economic activity of the whole economy. ✓✓ (Accept any other correct relevant higher-order conclusion) (Max. 2) [40] Copyright reserved Please turn over ### Page 16 Economics/P1 16 Hlayiso/Mock 2026 NSC – Marking Guidelines QUESTION 6: ECONOMIC PURSUITS 40 MARKS – 40 MINUTES Discuss in detail the industrial development of South Africa under the following headings: the mineral revolution; mechanisation of production; urbanisation and the migrant labour system. (26 marks) How did international sanctions during the apartheid era affect the South African economy? (10 marks) INTRODUCTION Industrial development is the process through which an economy changes from mainly agricultural (primary) production to large-scale mining, manufacturing and services, using more capital and technology. ✓✓ (Accept any other correct relevant introduction) (Max. 2) BODY: MAIN PART The mineral revolution ✓ • Diamonds were discovered near Hopetown in 1867, which led to the development of Kimberley ✓✓ • Gold was discovered on the Witwatersrand in 1886, which led to the rapid growth of Johannesburg ✓✓ • The economy changed from one based mainly on agriculture to one based on mining ✓✓ • Large amounts of foreign capital and many immigrants with skills came into the country ✓✓ • Railways, roads and harbours were built to link the mines with the ports ✓✓ • Supporting industries developed, e.g. coal mining, explosives, engineering and construction ✓✓ • Financial institutions developed, e.g. banks and the Johannesburg Stock Exchange (1887) ✓✓ • Farmers found new markets for food in the mining towns ✓✓ Mechanisation of production ✓ • Mechanisation is the use of machines instead of human and animal labour ✓✓ • Deep-level gold mining required expensive machinery and large amounts of capital, which led to the formation of large mining companies ✓✓ • Manufacturing industries grew, especially during the two World Wars when imports were difficult to obtain ✓✓ • The state established industries such as Escom (now Eskom, 1923) and ISCOR (1928) to supply electricity and steel ✓✓ • Mass production lowered the cost per unit and increased output and productivity ✓✓ • Mechanisation of farming (e.g. tractors and harvesters) increased output but reduced the need for farm workers ✓✓ Urbanisation and the migrant labour system ✓ • Towns and cities, e.g. Kimberley and Johannesburg, grew rapidly as people moved to the mines and factories ✓✓ • The mines needed large numbers of unskilled workers, which led to the migrant labour system ✓✓ • Workers were recruited on contracts from rural areas and from neighbouring countries, e.g. Mozambique, Lesotho and Malawi ✓✓ • Migrant workers lived in single-sex compounds or hostels, while their families stayed behind Copyright reserved Please turn over ### Page 17 Economics/P1 17 Hlayiso/Mock 2026 NSC – Marking Guidelines in rural areas ✓✓ • Low wages, pass laws and taxes kept workers dependent on mine work ✓✓ • The system contributed to the breakdown of family life and to the poverty of rural areas ✓✓ • Rapid urbanisation led to the growth of informal settlements and a shortage of services ✓✓ (Accept any other correct relevant response) (A maximum of 8 marks may be allocated for headings/examples) (Max. 26) ADDITIONAL PART • Many countries limited trade with South Africa, so exporters lost markets and export earnings fell ✓✓ • Many foreign companies withdrew their investments (disinvestment), which led to an outflow of capital ✓✓ • Foreign banks refused to renew loans in the mid-1980s, which led to a debt crisis ✓✓ • The value of the rand fell, which made imports more expensive and increased inflation ✓✓ • Economic growth slowed down and unemployment increased ✓✓ • South Africa had to develop its own industries to replace imports (import substitution), e.g. producing fuel from coal and developing its own arms industry ✓✓ • Access to new technology and to international sport and cultural events was limited ✓✓ (Accept any other correct relevant response) (A maximum of 2 marks may be allocated for mere listing of facts/examples) (Max. 10) CONCLUSION The mineral revolution laid the foundation of South Africa’s modern industrial economy, but the migrant labour system and later the policies of apartheid left a legacy of inequality and unemployment that the economy still struggles with today. ✓✓ (Accept any other correct relevant higher-order conclusion) (Max. 2) [40] TOTAL SECTION C: 40 GRAND TOTAL: 150 Copyright reserved ## Related documents - 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