PROVINCIAL ASSESSMENT

GRADE 10

ECONOMICS P1

JUNE 2018

MARKING GUIDELINES

MARKS: 100

These marking guidelines consist of 12 pages.

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SECTION A: COMPULSORY

QUESTION 1

1.1 MULTIPLE CHOICE QUESTIONS

1.1.1 A Economics

1.1.2 C Capital goods

1.1.3 C its monetary value

1.1.4 B negative economic growth

1.1.5 B Has no foreign sector (5x2) (10)

1.2 MATCHING ITEMS

1.2.1 C It deals with large decisions that impact on the total economy as a
whole.

1.2.2 F Describes how something should be ( on what ought to be ) 

1.2.3 A The enterprises that are owned and controlled by the government.

1.2.4 B The application of statistical methods in Economics.

1.2.5 G An increase in the amount of goods and services produced by a

country over a certain period of time.)  (5x1) (5)

1.3 GIVE ONE TERM

1.3.1 Economics

1.3.2 Production

1.3.3 Trough 

1.3.4 Per Capita GDP

1.3.5 Circular flow (5x1)(5)

TOTAL SECTION A: 20

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SECTION B

Answer only ONE of the TWO questions in the ANSWER BOOK.

QUESTION 2: MACROECONOMICS 40 MARKS – 30MINUTES

2.1 Answer the following questions.

2.1.1 Name any TWO elements of Economics.

 Production 
 Distribution 
 Consumption (Any 2x1) (2)

2.1.2 Why is economics related to other sciences?

 Some of the practices and principles can enhance the

usefulness of economics  (1 x 2) (2)

2.2 Study the table below and answer the questions that follow:

2.2.1 Name the any TWO examples of injections from the table above.
 Investments 
 Government expenditure
 Total exports
Any (2x1)(2)

2.2.2 Why are leakages and injections not always equal?

 The decisions causing leakages and injections are taken by
different role players that have different motives, e.g.
households save and business invest. 
 They are often caused by outside forces and events in foreign
countries, for instance in oil prices. 
 Participants’ economic decisions are not the same, e.g.
households spent and save part of their income and businesses
invest.  Any (1x2)(2)

2.2.3 Calculate Wingdale’s total leakages for 2016 using the information
given in the table above.

Leakages = Savings + Tax revenue + total imports

= 100 + 210 + 190
= 500  (4)

2.2.4What equation would you use to work out the total injections from an
economy?

Injections = investments + government expenditure + payment for

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exports  (2)

2.3Study the extract below and answer the questions that follow:

2.3.1According to the extract above, what are the solutions to the

economic problem?

 We have to choose.
 We have to make trade-offs.
 We have to efficiently allocate resources. (2x1)(2)

2.3.2 Which processes is involved in study in Economics.

 Production 
 Distribution 
 Consumption (2x1)(2)

2.3.3 Briefly describe the concept opportunity cost.

 The value of the best forgone opportunity or alternative. (2x1)(2)

2.3.4 How does absolute scarcity differ from relative scarcity?

Absolute scarcity Relative scarcity

It exists where there is limited amount It exists where the demand for a good
of a good and there is no substitute is greater than the supply of a good.
for it./ it exists when it is not  / When you decide to have one
possible to increase the supply of a thing instead of another.  e.g. if
good or service because we decide to use resources for the
resources are finite. It usually applies production of cake instead of milk,
to goods and services that are milk will then be relatively scarce 
essential to human survival,  e. g.
food and water
Any (2x2) (4)

2.4 Distinguish between leakages and injections.

LEAKAGES INJECTIONS

Means withdrawal of money Additional income into the

from the economy economy
e.g. Savings e.g. Investment
Taxes Government spending
Imports Exports

Any (2x4) (8)

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2.5 How does gross domestic product relate to economic growth?

 GDP refers to the total market value of all the final goods and services
produced within the boundaries of a country over a specific period of
time./
 GDP is the best measure of the level of economic activity in a country
(because it measures what has been produced within that country). 
 Economic growth refers to an increase in the productive capacity of the
economy to produce more goods and services over time. /
 Economic growth is an increase in real output or real output per
capita.
 The economic growth of a country is measured through real GDP.
 If the economy grows then the GDP of a country will also grow. 
 If the economy declines then the GDP of a country will also decline. 
Accept any relevant answer. (8)

QUESTION 3

3.1. Answer the following questions.

3.1.1. List the TWO methods used to calculate GDP.

 Production 
 Income 
 Expenditure Any (2x1) (2)
3.1.2 How can consumption cause environmental pollution

 Consumption causes environmental damage, such as the air

pollution caused by driving a car. 
 The release of massive quantitative of carbon dioxide is global
warming. Any (1X2) (2)

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3.2. Study the table below and answer the questions that follow

Items Amount (R million)

Government spending (G) R25m

Investment (I) R240m

Exports (X) R56m

Consumption by R10m
households (C)
Import s (Z/M) R10m

GDP @ market price A

Source: SARB Quarterly Bulletin 2016

3.2.1 What is the source for the table above?

SARB Quarterly Bulletin 2016 (1)

3.2.2 Which aggregate component is the highest?

Investment (1)

3.2.3 Explain the importance of GDP aggregates.

To determine the standard of living in the country.

To compare the prosperity levels between countries.
To measure the economic growth from one year to the next.
 Any (2x2)(4)
3.2.4 Determine the value for A. Show all your calculations.
GDP = C + I + G + (X-Z)
= 10+240+25+ (56-10) 
=R321m (4)
3.3 Study the extract and answer the questions that follow:

3.3.1. Identify a factor that leads to an improvement in the lives of South

African people.

 Economic growth or growth in the economy. (1)

3.3.2Name a document that sets out the rights of the South Africans.

 The constitution and Bill of rights  (1)

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3.3.3 Briefly describe the concept pollution.

 Pollution is the contamination of the environment with dirty and

harmful substances / it is poisonous gases and contaminants
emitted on the environment.

3.3.4 What does the statement “South Africans gained many rights that had
previously been withheld from them” mean?

 This is the clear indication that many South Africans were

oppressed and could simply not enjoy any rights that are
enshrined in the consultation of the New South Africa today. 
(2)

3.3.5 Differentiate between the right to basic education and the right to basic
standard of living.
The right to basic education Access to basic standard of living
All South Africans have the right to The government has committed itself to
basic education and the right to learn improving living conditions and standards
skills and obtain training, which will of living of all its citizens and is trying to
help them to get jobs and become provide houses, pensions, food and
productive members of the economy. health care for all.

(2 x 2) (4)

3.4 Suggest FOUR possible solutions to reduce environmental problems.

 Green Tax.Government could impose tax on production of goods and on

how they affect the environment,  and producers will have to decrease
their pollution to make sure that they keep the cost of their product down. 
 Government action.Governments are starting to put measures in place to
stop or reduce the amount of pollution within their countries,

 Public action.As more people become aware of the damage to the

environment they are taking action and taking part in programmes to help
restore the damage done and to improve the environment around them. 

 New technology.Cleaner and safer technology is being developed with the

environment in mind. 

 Fewer waste products, decreased reliance on fossil fuels and a demand by

producers for efficient and environmentally safe technology are giving rise to
new products and environmentally safe machines.  (4x2)(8)

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3.5 How can human rights be violated in an industrialised economy?

 The development of factories and large-scale production and some practices
developed affect human rights. 
 E.g. children are employed in factories and mines; women are compelled to
do work that is beyond their physical strength and dignity.
 Workers work more hours’ e.g fourteen hours a day with almost no time for
meals and other personal needs. 
 Factories are dirty, wet and smelly, ventilation and vision are poor work
safety is not considered and first aid is never given a thought. 
 People live in slums where there is no proper shelter  where there is
limited access to clean water and sanitation. 
 The rights of humans and workers are acknowledged and developed
extensively by the individual countries within international organisations.
 Politicians ,labour unions and employers organisations plays a role in putting
acts in place that protect the basic rights of people and workers. 
 People do not have access to food and water, healthcare and social security.

 The income gap in the country is large, with many people still living in
poverty./ The inequality gap in income –distribution widened.
Any (4X2) (8)
[40]

TOTAL SECTION B: 40

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SECTION C

Answer only ONE question from this section.

STRUCTURE OF THE ESSAY MARK ALLOCATION

Introduction Max .2
Body : Max.26
Main part: Discuss in detail / In –depth discussion /Examine
/Critically discuss/Analyse/Compare/Evaluate
/Distinguish/Explain/Assess/Debate
Additional part:Give own opinion/Critically discuss/Evaluate/ Max.10
Critically evaluate/Draw a graph and explain/Use the graph given
and explain/Complete the given graph/Calculate/Deduce/
Compare/Explain/Distinguish/Interpret/Briefly
Conclusion Max.2
TOTAL 40

QUESTION 4

 Discuss in detail the role of the participants in the closed economy. (26)
 Analyse the importance of markets in the circular flow. (10)

Introduction

 The circular flow model is a simplified representation of the interaction

between the participants of the economy /
 The flows of goods and services and money, in opposite directions between
consumers, enterprises, the public sector and the foreign sector.
(Accept any relevant introduction) Max (2)

MAIN PART
HOUSEHOLDS

 They are the owners of factors of production. 

 They are consumers who make important economic decisions such as what
products to buy, where to buy them, when to buy them and how to buy and
pay for them.
 Households want to improve their standard of living. 
 They sell their factors of production to business enterprise in return they
receive the income in the form of interest, wages, profit and rent
 With the income they get from business they buy goods and services from the
businesses. 
 They are the consumers of the economic goods.  (9)

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BUSINESS ENTERPRISES / FIRMS 

 They are producers that employ the factors of production to produce and
supply goods and services so as to satisfy the consumers’ needs and
wants.
 Businesses buy factors of production from the household. 
 They are the producers of the economic goods. 
 They sell their goods and services to Household and receive the income.
 They buy capital goods to increase their returns.  (9)

GOVERNMENT/PUBLIC SECTOR 
 .Government supply necessary goods and services that are not
supplied by business enterprises. 
 It wants to provide a stable framework within which the economy
operates. 
 Government purchases factors of production from the household. 
 Also purchases goods and services from the firms.
 Receives income in the form of tax from household and businesses.
 Provides the household and the businesses with public goods e.g.
street lights and Parks  (8)

ADDITIONAL PART

Factor market Product market

Market where factors of production Markets where goods and services are sold. 
are sold. 
Households present their factors to Business enterprises sell their goods and
business enterprises on the factor services on the product market and the
market and receive income.  spending from the households in return. 
The government purchases factors of The government provides public goods and
production on the factor market and services to households and businesses. 
pays salaries. 
The foreign sector is responsible for The foreign sector imports and exports final
imports and exports of raw materials; products on the product market.
liable for immigration and emigration
of workers.

Max (10)
Conclusion

Markets are critically important institutions in our economic system because they
regulate supply and demand and safeguard price stability and general business
confidence.  Max (2)
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[40]

QUESTION 5

 Discuss the phases/stages of business cycle. (26)

 What effect do you think business cycles have on the economy? (10)

Introduction

Business cycle is consecutive periods of increasing and decreasing economic

activity. (Max. 2)

Main Part

An ordinary phase has four phases they are analysed in –order they appear in the
diagram.
1. Recession phase

 This is the phase following the boom.

 Businesses start to realise they have to provide for bad times.
 They start to reduce inventories. 
 They repay loans and reduce their workforce.
 Eventually profits come under pressure. 
 High accelerating inflation force interest rates upwards.
 Consumer budgets become under pressure. 
 They reduce expenditure and void taking up credit. 
Max 7 marks

2. Depression phase 

 Business and households become pessimistic. 

 Banks call up credits. 
 Bankruptcies increase; houses, furniture’s and cars are repossessed.
 Unemployment increases. 
Max 5 marks

3. The recovery phase 

 Tight monetary conditions eventually become successful in reducing

inflation.
 Business realise that conditions are going to improve and they take steps that
raise productivity. 
 Production and inventories increases.
 Economic activities revive and more workers are employed.
 Households’ incomes increases and so does consumption expenditure. 
Max 7 marks
4. The prosperity phase

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 Entrepreneurs borrow money and buy new machinery and equipment.

 More people are employed.
 Factories work overtime and skilled labour become extremely scarce. 
 Skewed businesses realise that this phase cannot last forever. 
 Inflation increases continuously.  Max 7 marks
Any 3 x 7 and 1 x 5)
Max 26 marks
Additional part: What effect do you think business cycles have on the
economy?

 Changes in economic growth 

 Change in employment 
 Change in price levels 
 Changes in exchange rates 
 Changes in aggregate demand and supply 

(10)

Conclusion

The analysis above shows a cycle under “normal” conditions, however modern
economic policies succeed in preventing deep depression and boom that end in
extreme conditions. Max (2)
[40]
TOTAL SECTION C: 40
GRAND TOTAL: 100

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