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GAUTENG DEPARTMENT OF EDUCATION

PROVINCIAL EXAMINATION

NOVEMBER 2021
GRADE 10

ECONOMICS

(PAPER 1)

TIME: 2 hours

MARKS: 150

14 pages
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INSTRUCTIONS AND INFORMATION

1. Answer FOUR questions as follows in the ANSWER BOOK:

SECTION A: COMPULSORY
SECTION B: Answer TWO of the three questions.
SECTION C: Answer ONE of the two questions.

2. Answer only the required number of questions. Answers in excess of the

required number will NOT be marked.

3. Number the answers correctly according to the numbering system used in this
question paper.

4. Write the question number above each answer.

5. Read the questions carefully.

6. Start EACH question on a NEW page.

7. Leave 2 – 3 lines between subsections of questions.

8. Answer the questions in full sentences and ensure that the format, content and
context of your responses comply with the cognitive requirements of the
questions.

9. Use only black or blue ink.

10. You may use a non-programmable calculator.

11. Write neatly and legibly.

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SECTION A (COMPULSORY)

QUESTION 1 30 MARKS – 20 MINUTES

1.1 Various options are provided as possible answers to the following questions.
Choose the answer and write only the letter (A – D) next to the question
numbers (1.1.1 to 1.1.8) in the ANSWER BOOK, e.g. 1.1.9 D.

1.1.1 Which ONE of the following does not fall within the economics field of
study?

A Scarce resources
B Choice
C What people should buy
D Opportunity cost

1.1.2 The term that best describes the fact that people have unlimited needs
and wants, with limited resources to satisfy them is …

A the economic problem.

B abundance.
C factors of production.
D the branches of economics.

1.1.3 When new money is added to the circular flow it is known as ...

A savings.
B profits.
C leakages.
D injections.

1.1.4 The income an individual has available for spending and saving after
paying tax is known as …

A real income.
B disposable income.
C nominal income.
D gross income.

1.1.5 During the middle ages road networks developed along popular routes
due to ...

A tourism.
B visiting friends and relatives.
C trade.
D self-sufficiency.
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1.1.6 The field of study that that deals with customs and practices of local and
international commerce is called …

A political science.
B common law.
C social science.
D mercantile law.

1.1.7 Which of the following population groups can be classified as

economically active?

A Employed people
B Learners attending school
C People 65 years and older
D People who are 14 years and younger

1.1.8 The difference between the birth rate and the death rate of a country is
called the …

A population deficit.
B natural growth rate.
C migration rate.
D active population rate. (8 × 2) (16)
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1.2 Choose a description from COLUMN B that matches an item in COLUMN A.

Write only the letter (A – I) next to the question numbers (1.2.1 to 1.2.8) in the
ANSWER BOOK.

COLUMN A COLUMN B
1.2.1 Scientific method A A cyclical pattern that reflects the natural
growth rate of a population
1.2.2 Circular flow of the
economy B A modern medium of exchange

1.2.3 Households C A systematic approach to uncover regular

patterns
1.2.4 Global warming
D A system of exchange where goods or
1.2.5 Demographic cycle services are directly exchanged for other
goods or services
1.2.6 Life expectancy
E A group of people that live together and
1.2.7 Barter make economic decisions

1.2.8 Money F The increase of the earth’s average

surface temperature due to the effects of
greenhouse gases

G A diagram showing the flow of goods,

services, natural resources, income and
expenditure

H The decrease in average temperature

due to the effects of greenhouse gases

I The number of years a person can be

expected to live for, based on the current
demographics
(8 × 1) (8)
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1.3 Give ONE term for each of the following descriptions. Write only the term next
to the question number (1.3.1 to 1.3.6) in the ANSWER BOOK. Abbreviations,
acronyms and examples will NOT be accepted.

1.3.1 Natural resources, people, machinery and land used in the production
of goods and services

1.3.2 The movement of income and expenditure among the participants in

the economy

1.3.3 A tax charged to discourage the consumption of demerit goods

1.3.4 A government policy that uses tax and spending to intervene in the
economy

1.3.5 The movement of people to live and work in cities

1.3.6 Citizens leaving the country to become citizens of another country

(6 × 1) (6)

TOTAL SECTION A : 30
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SECTION B

Answer any TWO of the three questions from this section in the ANSWER BOOK.

QUESTION 2: MACROECONOMICS 40 MARKS – 30 MINUTES

2.1 Answer the following questions.

2.1.1 Name TWO branches of Economics. (2 x 1) (2)

2.1.2 What difficulties are faced by Social Sciences? (1 x 2) (2)

2.2 Study the cartoon below and answer the questions that follow

OUR ACCOUNTANT
SAYS WE’RE GOING
BROKE! WHAT Hire An Economist
SHOULD WE DO

Adapted source: www.google.com

2.2.1 What advice is given by the lady in the cartoon? (1)

2.2.2 Name ONE career opportunity related to Economics. (1)

2.2.3 Briefly describe the term Economics. (2)

2.2.4 Why is Economics considered to be a Social Science? (2)

2.2.5 How does Macroeconomics differ from Microeconomics? (2 x 2) (4)

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2.3 Study the illustration below and answer the questions that follow.

CIRCULAR FLOW OF THE ECONOMY

Adapted source: www.google.com

2.3.1 Which is the missing participant in the diagram of the economy? (1)

2.3.2 What is the contribution made by households to the government called? (1)

2.3.3 Briefly describe the term foreign trade. (2)

2.3.4 Why is South Africa regarded as an open economy? (2)

2.3.5 Why is it important that South Africans buy locally produced products?
(2 x 2) (4)

2.4 Explain the difference between positive and normative statements. (4 x 2) (8)

2.5 Why are financial institutions an important part of the economic circular flow
model? (8)
[40]
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QUESTION 3: ECONOMIC PURSUITS 40 MARKS – 30 MINUTES

3.1 Answer the following questions.

3.1.1 Name any TWO labour unions in South Africa. (2 x 1) (2)

3.1.2 Why is it important for the government to estimate the country’s

population growth rate? (1 x 2) (2)

3.2

1 2 3 4 5

Birth Rate
Births/Deaths per 1000

Death Rate

Total population

TIME

3.2.1 Name the cycle illustrated by the graph. (1)

3.2.2 In what stage would the population be described as an “old population”? (1)

3.2.3 Briefly describe the term economically active population (EAP). (2)

3.2.4 Why do many developing nations experience high population growth

rates? (2)

3.2.5 How can the government help reduce the national death rate?
(2 x 2) (4)
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3.3 Study the cartoon below and answer the questions that follow.

SORRY I’VE GOT WHY MONEY WAS INVENTED

NOTHING SMALLER

[Source: Internet Cartoon]

3.3.1 What type of trade is depicted in the cartoon above? (1)

3.3.2 Name a more efficient trade method than can be used? (1)

3.3.3 Briefly describe the term specialisation. (2)

3.3.4 Why is surplus production required for trade and markets to exist? (2)

3.3.5 How has specialisation led to the increase in international trade?

(2 x 2) (4)

3.4 Explain the evolution of financial institutions and the emergence of joint stock
companies. (4 x 2) (8)

3.5 How does an increase in the size of the labour force benefit the economy? (8)
[40]
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QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS

40 MARKS – 30 MINUTES

4.1 Answer the following questions.

4.1.1 Name any TWO types of consumer goods. (2 x 1) (2)

4.1.2 What effect will a recession have on business activities? (1 x 2) (2)

4.2 Study the extract below and answer the questions that follow.

How air, water, and plastic pollution affect the economy

The two biggest problems relating to pollution impacts on air
and water resources. Pollution causes billions in damage to
the environment and people’s health. A growing problem is
pollution from plastics, which is damaging our food supply
and even the air we breathe. Air pollution kills 7 million
people each year, according to the World Health
Organization.

Source adapted from: https://www.thebalance.com/]

4.2.1 Name ONE consequence of air pollution according to the extract. (1)

4.2.2 What kind of pollution is a growing cause of global warming? (1)

4.2.3 Briefly describe the term deforestation. (2)

4.2.4 Why should government give environmental subsidies to businesses? (2)

4.2.5 How can economic development take place without harming the
environment? (2 x 2) (4)
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4.3 Study the table below and answer the questions that follow:

Provincial distribution of South Africa’s population in 2019

POPULATION % OF TOTAL
ESTIMATE POPULATION
Eastern Cape 6 712 276 11,4
Free State 2 887 465 4,9
Gauteng 15 176 116 25,8
KwaZulu-Natal 11 289 086 19,2
Limpopo 5 982 584 10,2
Mpumalanga 4 592187 7,8
Northern Cape 1 263 875 2.2
North West 4 027 160 6,9
Western Cape 6 844 272 11,6
Total 58 775 022 100
Adapted source: Statistics South Africa

4.3.1 Name the institution that publishes the above information. (1)

4.3.2 Which province had the highest population in 2019? (1)

4.3.3 Briefly describe the term migration. (2)

4.3.4 Why is urbanisation a problem for the government? (2)

4.3.5 How can the government curb urbanisation? (2 x 2) (4)

4.4 Briefly discuss the evolution of labour unions. (4 x 2) (8)

4.5 How successful was the government’s actions in addressing the negative
impact of COVID-19 on households and businesses? (8)
[40]

TOTAL SECTION B: 80
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SECTION C

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

Your answer will be assessed as follows:

MARK
STRUCTURE OF ESSAY
ALLOCATION
Introduction

The introduction is a lower-order response.

• A good starting point would be to define the main concept
related to the question topic. Max. 2
• Do not include any part of the question in your introduction.
• Do not repeat any part of the introduction in the body.
• Avoid mentioning in the introduction what you are going to
discuss in the body.
Body

Main part: Discuss in detail/In-depth discussion/Examine/ Max. 26

Critically discuss/Analyse/Compare/ Evaluate/Distinguish/
Differentiate/Explain

Additional part: Give own opinion/Critically discuss/Evaluate/

Critically evaluate/Draw a graph and explain/Use the graph given
and explain/ Complete the given graph/Calculate/Deduce/ Max. 10
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
Max. 2
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the
discussion/analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL: 40
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QUESTION 5: MACROECONOMICS 40 MARKS – 40 MINUTES

● Discuss in detail the effects of economic fluctuations on the participants in the

economy. (26 marks)
● Evaluate the exogenous reasons (monetarist view) for business cycles. (10
marks) [40]

QUESTION 6: ECONOMIC PURSUITS 40 MARKS – 40 MINUTES

● Discuss the South African labour force in detail under the following headings:
o Age and composition (8)
o Employment and unemployment (10)
o Geographic distribution (8) (26 marks)
● What is the impact of HIV and AIDS on the South African economy? (10 marks) [40]

TOTAL SECTION C: 40

TOTAL: 150
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PROVINCIAL EXAMINATION
NOVEMBER 2021
GRADE 10
MARKING GUIDELINES

ECONOMICS (PAPER 1)

1919 pages
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SECTION A (COMPULSORY)

QUESTION 1

1.1 MULTIPLE-CHOICE QUESTIONS

1.1.1 C What people should buy

1.1.2 A the economic problem.

1.1.3 D  injections.

1.1.4 B disposable income.

1.1.5 C trade.

1.1.6 D mercantile law.

1.1.7 A Employed people

1.1.8 B natural growth rate. (8 x 2) (16)

1.2 MATCHING ITEMS

1.2.1 C A systematic approach to uncover regular patterns

1.2.2 G A diagram showing the flow of goods, services, natural

resources, income and expenditure

1.2.3 E A group of people that live together and make economic

decisions

1.2.4 F The increase of the earth’s average surface temperature due

to the effects of greenhouse gases

1.2.5 A A cyclical pattern that reflects the natural growth rate of a

population

1.2.6 I The number of years a person can be expected to live for,

based on the current demographics

1.2.7 D A system of exchange where goods or services are directly

exchanged for other goods or services

1.2.8 B A modern medium of exchange (8 x 1) (8)

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1.3 GIVE A TERM

1.3.1 Factors of production

1.3.2 Money flow

1.3.3 Excise/Sin tax

1.3.4 Fiscal policy 

1.3.5 Urbanisation

1.3.6 Emigrants (6 x 1) (6)

TOTAL SECTION A: 30
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SECTION B

Answer any TWO of the three questions from this section in the ANSWER BOOK.

QUESTION 2

2.1 Answer the following questions.Beantwoord die volgende vrae.

2.1.1 Name TWO branches of Economics.

• Microeconomics 
• Macroeconomics 
• Monetary economics 
• Public-sector economics 
• International economics 
• Development economics 
• Environmental economics  (Any 2 x 1) (2)

2.1.2 What difficulties are faced by Social Sciences?

• Natural Sciences often test their theories or hypotheses in
laboratories, which is not possible with Economics. 
• Human nature is not always predictable. 
• Economic policies are heavily debated and can be loaded
with normative statements. 
• It is difficult to decide which facts to use. 
(Accept any other correct relevant response..) (Any 1 x 2) (2)

2.2 Data Response Datarespons

2.2.1 What advice is given by the lady in the cartoon?

She advises the employee to hire an Economist.  (1)

2.2.2 Name one career opportunity related to Economics.

• Market Research analyst 
• Credit analyst 
• Financial analyst 
• Actuary 
• Economic consultant 
• Compensation and benefits manager 
• Accountant 
(Accept any other correct relevant response.) (Any 1 x 1) (1)
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2.2.3 Briefly describe the term Economics.

A Social Science studies how individuals, businesses and other
organisations choose to use resources to achieve the maximum
satisfaction of their unlimited needs and want.s  (2)

2.2.4 Why is Economics considered to be a Social Science?

Economics is a Social Science that examines people’s behaviour
and how they interact with the society. 
(Accept any other correct relevant response..) (2)

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 behaviour 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 correct relent response) (2 x 2) (4)

2.3 Data Response

2.3.1 Which is the missing participant in the diagram of the

economy?
Foreign sector  (1)

2.3.2 What is the contribution made by households to the

government called?
Taxes (taxation)  (1)

2.3.3 Briefly describe the term foreign trade.

Foreign trade is the exchange of capital, goods and services across
international borders or territories.  (2)

2.3.4 Why is South Africa regarded as an open economy?

South Africa is regarded as an open economy because it interacts
freely with other economies around the world. (2 x 2) (2)
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2.3.5 Why is it important that South Africans buy locally

produced products?
Buying South African stimulates an increase in demand for
locally produced products and services. 
This translates into safeguarding existing employment
opportunities, economic growth and the creation of more quality
employment opportunities in our country. 
(Accept any other correct relevant response..) (4)

2.4 Explain the difference between positive and normative statements.

Verduidelik die verskil tussen positiewe en normatiewe stellings.

Positive statements Normative statements

• These statements describe facts • These statements include
without making any judgement whether value judgements or opinions
the facts are good or bad.  by economists.
• Positive statements are concerned with • These statements cannot be
what was in the past, what is today or proven. 
what will be in the future.  • Normative statements deal
• You can test positive statements, with economic behaviour and
• Example of a positive statement: “The they judge the behaviour
rand appreciated by 2% against the whether it is good or bad. 
dollar.”  • You can debate a normative
statement. 
• Example of a normative
statement: “The South African
inflation rate is too high.” 
(Accept any other correct relevant response.) (4 x 2) (8)

2.5 Why are financial institutions an important part of the economic

circular flow model?
● The financial institutions consist of banks, insurance companies and
pension fund investors. 
● They serve as a link between the participants that have surplus funds
and those that need funds. 
● Households and business enterprises do not always spend all their
income. 
● Households and business enterprises deposit their unspent income
called savings with financial institutions. 
● Business enterprises borrow from the financial institutions. 
● Business enterprises use the loaned funds to buy capital goods such
as property, machinery and equipment.
● Expenditure on capital goods is called investment.
(Accept any other correct relevant response.) (8)
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QUESTION 3

3.1 Answer the following questions.

3.1.1 Name any TWO labour unions in South Africa.

CONSAWU: Confederation of South African Workers 'Unions
COSATU: Congress of South African Trade Unions
FEDUSA: Federation of Unions of South Africa
FOSATU: Federation of South African Trade Unions
ITUC: International Trade Union Confederation
NACTU: Nasionale Raad van Vakbonde
NEHAWU: National Education, Health and Allied Workers 'Union
NUM: National Union of Mineworkers
UWUSA: United Workers' Union of South Africa
(Accept any other correct relevant response.)
(Any 2 x 1) ) (2)

3.1.2 Why is it important for the government to estimate the

country’s population growth rate?
Population growth rate is an important indicator of the changing
needs of a country’s people, e.g. how great the burden will be on
providing sufficient infrastructure, (e.g. schools, hospitals, housing,
roads), resources (e.g. food, water, electricity) and jobs. 
(Accept any other correct relevant response..) (1 x 2) (2)

3.2 Data Response

3.2.1 Name the cycle illustrated by the graph.

The Demographic Cycle (1)

3.2.2 In what stage would the population be described as an “old

population”?
Stage 5 (1)

3.2.3 Briefly describe the term economically active population (EAP).

Includes all the people between the ages of 15 and 64 who work in
the formal sector, the informal sector or are self-employed.
(2)
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3.2.4 Why do many developing nations experience high population

growth rates?
The total population increases because of the higher birth rate and
decreasing death rate. 
(Accept any other correct relevant response.) (1 x 2) (2)

3.2.5 How can the government help reduce the national death rate?
● Government should improve the nation’s nutrition by stimulating
food production and help with researching better farming
methods.
● Government can improve the transport of food and storage
infrastructure.
● Government should improve public health services (e.g. provide
the smallpox vaccine). 
● Government could provide better medical services and raise
health awareness.
● Government could educate people on how to avoid illnesses like
AIDS and diabetes. 
● Government could educate people with regards to improved
hygiene (e.g. boiling of drinking water) and sanitation. 
(Accept any other correct relevant response..) (2 x 2) (4)

3.3 Data Response

3.3.1 What type of trade is depicted in the cartoon above?

Barter  (1)

3.3.2 Name a more efficient trade method than can be used?

Money  (1)

3.3.3 Briefly describe the term specialisation.

Specialisation is a method of production whereby an entity focuses
on the production of a limited scope of goods to gain a greater
degree of efficiency. 
(Accept any other correct relevant response..) (2)

3.3.4 Why is surplus production required for trade and markets to

exist?
Without surplus production households will consume all that they
produce and nothing will be left over to trade with. 
(Accept any other correct relevant response..) (2)
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3.3.5 How has specialisation led to the increase in international

trade?
● Specialisation leads to lower cost of production and greater
production quantities. 
● Because of specialisation more goods are produced and prices
are lower. 
● Countries also tend to specialise in goods they are best adapted
to produce and import goods they are less efficient in
producing.
● Worldwide, consumers benefit from the lower prices and the
availability of greater quantities of goods.
(Accept any other correct relevant response..) Any (2 x 2) (4)

3.4 Explain the evolution of financial institutions and the emergence of

joint stock companies.
● Joint stock companies arose during the 16th and 17th centuries in the
Netherlands.
● Large companies were no longer in individual ownership, but in the
hands of shareholders.
● New formal and informal rules have made it easier to take risks.
● Limited liability companies have become the norm.
● Investors in companies such as the VOC have received paper
certificates as proof of share ownership.
● These shares could be traded on stock markets such as the Amsterdam
Stock Market.
● Shareholders have been granted limited liability for possible debts.
(Accept any other relevant response.) (2 x 4) (8)

3.5 How does an increase in the size of the labour force benefit the
economy?
• An increase in the size of the labour force would lead to an increase in
the production of goods and services .
• This implies a real GDP increase and economic growth takes place.
• Economic growth makes economic development and better living
standards possible.
• A larger labour force results in an expansion of tax bases. 
• The larger labour force means households have more
disposable/available income. 
• Increased consumer spending should benefit local businesses.
• An increase in the labour force brings a younger, newer generation of
people with new ideas and inventions.
(Accept any other relevant response.) (8)
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QUESTION 4

4.1 Answer the following questions.

4.1.1 Name any TWO types of consumer goods.

• Non-durable goods
• Semi-durable goods
• Durable Goods
• Services (Any 2 x 1) (2)

4.1.2 What effect will a recession have on business activities?

During a recession, income, production and investments will
decline. 
(Accept any other correct relevant response.) (1 x 2) (2)

4.2 Data Response

4.2.1 Name one consequence of air pollution according to the extract.

Endangers health damages the environment. 
(Accept any other correct relevant response.) (Any 1 x 1) (1)

4.2.2 What kind of pollution is a growing cause of global warming?

Pollution from plastic. 
(Accept any other correct relevant response.) (1)

4.2.3 Briefly describe the term deforestation.

Cutting down of trees and forests to make space for development. 
(Accept any other correct relevant response.) (2)

4.2.4 Why should government give environmental subsidies to

businesses?
• To encourage businesses to produce environmentally friendly
products. 
• For the development of new techniques and technology to
reduce pollution. 
• To promote recycling of waste products.
(Accept any other correct relevant response.) (1 x 2) (2)

4.2.5 How can economic development take place without harming

the environment?
This could take place by:
• Living within the limits of what the environment can provide. 
• Understanding the links between the economy, society and the
environment. 
• Distribution of resources and opportunities evenly. 
(Accept any correct relevant response.) (2 x 2) (4)
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4.3 Data Response Datarespons

4.3.1 Name the institution that publishes the above information.

Statistics South Africa/Stats SA (1)

4.3.2 Which province had the highest population in 2019?

Gauteng (1)

4.3.3 Briefly describe the term migration.

People who move across spatial boundaries (e.g. provinces,
countries) to change their residence.  (2)

4.3.4 Why is urbanisation a problem for the government?

Urbanisation leads to an increased demand for housing, municipal
services and infrastructure.
(Accept any other correct relevant response.) (2)

4.3.5 How can the government curb urbanisation?

• By introducing agricultural parks in which rural communities are
turned into industries through agricultural produce
• Government can create job opportunities in rural areas so that
people in rural areas can start to earn a living, thereby making
the rural areas as attractive as the urban areas. 
(Accept any other correct relevant response..) (2 x 2) (4)

4.4 Briefly discuss the evolution of labour unions.

• During the Industrial Revolution, working conditions in factories were
very poor. 
• This led to the formation of trade unions. 
• There were workers' organisations trying to improve wages and
working conditions. 
• By the beginning of the twentieth century, the right of workers to
organise and bargain collectively was recognised in most western
countries. 
• Union membership increased rapidly. 
• Trade unions imposed restrictions on what employers could do to
workers. 
• Some industries suffered as a result of strikes, but the unions brought
about many improvements in working conditions. 
• Trade unions played an important role in South Africa because they
served as a political forum for workers and contributed to the formation
of a new government. 
(Accept any other relevant response.) (2 x 4) (8)
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4.5 How successful was the government’s actions in addressing the

negative impact of COVID-19 on households and businesses?
• Government used measures like spending, loans, and monetary
instruments to lessen the impact of COVID-19 on households and
businesses. 
• The South African government was reasonably successful in lessening
the impact of COVID-19.
• The following measures were successfully implemented:
− The creation of the COVID-19 Solidarity Fund after the state of
national disaster was announced.
− The South Africa Reserve Bank (SARB) reduced the repo rate to
3.5%.
− The government extended funding to the health system.
− The government provided a relief package of R1 135 billion to
assist the taxi industry/taxi owners. 
− Taxi operators were given payment holidays during the severe
period of the COVID-19 pandemic. 
− The government provided relief to employees and employers in
South Africa through the COVID-19 TERS benefit. 
− To avoid further economic stress and poverty, the government
provided a relief benefit of R350 to SASSA. 
(Accept any other correct relevant response..) (4 x 2) (8)
[40]

TOTAL SECTION B: 40
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SECTION C

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

QUESTION 5

• Discuss in detail the effects of economic fluctuations on the participants

in the economy. (26)
• Evaluate the exogenous reasons (monetarist view) for business cycles.
(10) [40]

Introduction

A country’s level of business activity has a big effect on its citizens. People are
normally affected positively by upswings and negatively by downswings. 
(Accept any other relevant correct response.) (Max. 2)

Body

Changes in the aggregate demand and supply: 

• The aggregate demand and supply is the total number of goods and services
demanded and supplied. 
• During an upswing, the aggregate demand and supply increased as a result of
increased income and spending by households. 
• Firms increase their production in order to meet the increase in demand. 
• For example, consumers visit restaurants more during an upswing. 
• During a downswing, the aggregate demand and supply will decrease as result
of decreased consumer spending and production by firms. 
• For example, consumers visit restaurants less during a downswing. 
• If a downward cycle continues, the economy may go into a depression. 
(Accept any other correct relevant response.)

Changes in economic growth: 

• Economic growth refers to the increase in the amount of goods and services
produced by a country over a given period. 
• Economic development refers to an improvement in education, health care or
income of the population. 
• Economic development implies an improvement of living standards. 
• An upswing leads to higher economic growth due to an increase in economic
activity and productivity. 
• The increased production and exports raises the GNI. 
• A downswing will lead to a decrease in economic growth. 
• During a downswing firms will produce less goods and services. This results in
a slowdown of the growth rate. 
(Accept any other correct relevant response.)
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Changes in price levels: 

• The price level changes when the demand and supply of goods and services
decreases. 
• During an upswing, there is an increase in production, employment and
household income. 
• Higher income and spending leads to an increase in the general price levels. 
• For example, the prices of staple foods such as bread and milk, will increase. 
• In a downswing, there is a decrease in production, employment and
households’ income. 
• The general price levels decrease because of lower consumer spending and
income. 
(Accept any other correct relevant response.)

Changes in employment: 
• During an upswing, businesses need to produce more goods and service to
keep up with demand. 
• This results in more employment. 
• Improvement in the economy will allow businesses to make better profits. 
• Businesses can afford to pay employees better wages and salaries. 
• During a downswing, businesses produce less goods and services. 
• Profits and income of businesses decrease. 
• Businesses cannot afford to pay workers and start to retrench workers. 
• Unemployment will increase. 
(Accept any other correct relevant response.)

Changes in the exchange rate: 

• In a downswing, there is a decrease in demand for local goods and services. 
• There is a decrease in exports. 
• This lowers the demand for the local currency.
• The decrease in exports reduces foreign reserves. 
• The rand will depreciate in value, weakening the currency. 
• During an upswing, there is an increase in foreign demand for local goods and
services.
• This results in an increase in export of goods and services. 
• Increased demand for the local currency can be expected. 
• This will result in the rand appreciating against other currencies. 
(Accept any other correct relevant response.)
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The impact on the economically vulnerable

• The effects of ups and downs on the economically vulnerable are enormous. 
• Any downturn will rob these people of satisfying their basic needs for food, shelter
and clothing. 
• A downturn in the economy will result in businesses downsizing their production
and closing factories or branches. 
• This will lead to large-scale unemployment, starting with the less skilled
workers. 
• The less affluent will not be able to satisfy their basic needs and desires. 
(Max. 26)

ADDITIONAL PART

• Exogenous reasons refer to changes in business cycles that originate

externally. 
• They initiate outside the economy of a country. 
• The government has no direct control over exogenous factors. 
• Examples include political and military interference in the economy (such as
wars), drought, famine, COVID-19, and other natural disasters. 
• Exogenous reasons cannot be predicted easily and it is difficult to avoid
them. 
• They affect the production and the consumption within the economy. 
• Exogenous reasons can lead to an upswing or downswing in an economy. 
(Accept any other relevant correct response.) (Max. 10)

CONCLUSION

• Fluctuations in economic activities should be managed so that they affect

the economy positively. 
(Accept any other relevant correct response.) (Max. 2)
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QUESTION 6

• Discuss the South African labour force in detail under the following sub-
headings:
o Age of the population (8)
o Employment and unemployment (10)
o Geographic distribution (8) (26 marks)
• What is the impact of HIV and AIDS on the South African economy?
(10 marks) [40]

Introduction

South Africa has a productive and industrialised economy with many

characteristics associated with a developing country. (Max. 2)

MAIN PART
Age and composition

• The ages of people in the labour force range from 15 and 64 years old. The
largest group employed are those between 25 and 34 years of age. 
• In the over 50 age group, the number of people employed decreases as there
are not many employment opportunities for them. 
• South Africa is a developing country, hence has a high birth rate with a larger
percentage of young people. 
• This could lead to serious problems for the labour market, because it will not
be long before all these youth will be looking for jobs. 
• The South African population of working-age is expected to continue to grow,
which will affect the size of the country’s labour force. 
• An economically active population consists of the age-group between 15 and
64 years. 
• People not included in the labour force consist of discouraged work-seekers,
students, homemakers, people with disabilities and those serving in the
military. 
• The labour force participation rate is a measure of the proportion of a country's
working-age population that engages actively in the labour market. 
(Accept any other correct relevant response.)
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Employment and unemployment

• It is difficult to achieve full employment. 

• At any given time, there will be people moving between jobs. 
• South Africa has an increasingly high unemployment rate. 
• Unemployment is the highest among unskilled and semi-skilled workers. 
• Young people with limited education and skills make up most of the numbers of
unemployed. 
• Agricultural provinces are the worst affected. 
• Youth unemployment continues to grow in the country. 
• This is the major driver of poverty. 
• Unemployment is the highest among youth between the ages of 15 to 34
years. 
• The economy has to generate more job opportunities to decrease the rate of
unemployment. 
• The tertiary industry has the highest number of employed people. 
• The decline of the labour intensive primary sector, namely mining and
agricultural, negatively affects employment numbers. 
• The tertiary and services sectors have increased due to training and skills
development. 
• Due to the increase in population, the economy has been unable to create
enough job opportunities. 
• Production methods have changed over the years, this is due to the
technological changes and environmental issues. 
(Accept any other correct relevant response.)

Geographical composition

• People are not evenly spread across the country. 

• Factors such as climate, water, fertile soil and economic opportunities influence
people’s decisions about where to live. 
• South Africa has nine provinces, each with its own distinctive economic
features. 
• Economic activity depends on local resources, geographic location, climate and
human skills. 
• The migration of people between the provinces is unavoidable, causing an
uneven geographical distribution of the population. 
• Gauteng has the largest population. 
• KwaZulu-Natal has the second highest population. 
• South African population is concentrated mainly in the urban areas of Gauteng,
Durban, Cape Town, Port Elizabeth, East London and Bloemfontein 
(Accept any other correct relevant response.) (Max. 26)
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ADDITIONAL PART

• HIV and AIDS has had a severe impact on the standard of living of many
households. 
• They lose income and experience an increase in medical expenses. 
• They spend less on food and other essentials, and this impairs the health of
other members of the households. 
• A large number of children and elderly people lose their economic support
structure. 
• Business profitability is affected because of declining productivity and
absenteeism. 
• Training new workers to replace workers means extra costs and loss of
experience. 
• Some businesses will have additional costs of assisting workers with anti-
retroviral drugs and other medications. 
• The economy is affected because HIV and AIDS causes the highest mortality
among the 25- to 40- age groups. 
• It reduces the number of trained and productive workers. 
• The number of skilled workers is diminishing. 
• Medical aid and other costs associated with HIV and AIDS are becoming so
high that it will eventually cripple the economy. 
(Accept any other correct relevant answer.) (Max. 10)

Conclusion

The population of South Africa reached more than 58 million and is largely
urbanised. All the main city areas are industrialised and offer job opportunities. 
(Accept any other correct relevant conclusion.) (Max. 2)

TOTAL SECTION C: 40

TOTAL 150