2. ASSESSMENT IN GRADE 12 2.1 Format of question papers 2.2 Details of question papers 2.3 Cognitive-level grid 2.4 A guideline to marking 2.5 Command verb detail 2.6 Higher-order questions
4 4 4 6 7 10 12
3. CONTENT
14
4. CONCLUSION
34
1. INTRODUCTION The Curriculum and Assessment Policy Statement (CAPS) for Economics outlines the nature and purpose of the subject Economics. This guides the philosophy underlying the teaching and assessment of the subject in Grade 12. The purpose of these Examination Guidelines is to:
Provide clarity on the depth and scope of the content to be taught and assessed in the Grade 12 National Senior Certificate (NSC) Examination in Economics.
Assist teachers to adequately prepare learners for the examinations.
This document deals with the final Grade 12 external examinations. It does not deal in any depth with the School-Based Assessment (SBA). These Examination Guidelines should be read in conjunction with:
The National Curriculum Statement (NCS) Curriculum and Assessment Policy Statement (CAPS): Economics
The National Protocol of Assessment: An addendum to the policy document, the National Senior Certificate: A qualification at Level 4 on the National Qualifications Framework (NQF), regarding the National Protocol for Assessment (Grades R–12)
The national policy pertaining to the programme and promotion requirements of the National Curriculum Statement, Grades R–12
NOTE: All topics where 'discuss in detail/examine in detail/compare and contrast in detail' appear, should be regarded as essay topics for the next three-year cycle.
2. ASSESSMENT IN GRADE 12 2.1 Format of the question papers CLASSIFICATION OF TOPICS FOR THE GRADE 12 ECONOMICS QUESTION PAPERS
ECONOMICS GR.12
PAPER 1 150 MARKS – 2 HOURS
PAPER 2 150 MARKS – 2 HOURS
MAIN TOPIC: MACROECONOMICS
MAIN TOPIC: MICROECONOMICS
SUBTOPICS:
Circular flow
Business cycles
Public sector
Foreign exchange markets
SUBTOPICS:
Perfect markets
Imperfect markets
Market failures
MAIN TOPIC: ECONOMIC PURSUITS
MAIN TOPIC: CONTEMPORARY ECONOMIC ISSUES
SUBTOPICS:
*Protectionism and free trade
Growth and development
Industrial development policies
Economic and social performance indicators
SUBTOPICS:
Inflation
Tourism
Environmental sustainability
* Note that Protectionism and Free Trade has been moved from Macroeconomics to Economic Pursuits.
2.2 Details of question papers
Each paper carries 150 MARKS.
The duration of each paper is 2 HOURS.
Each paper comprises SIX QUESTIONS divided into three sections. Of the six questions only FOUR must be answered as follows:
SECTION A: QUESTION 1 is COMPULSORY.
SECTION B: Consists of THREE questions: QUESTIONS 2–4 of which the candidate must choose only TWO
SECTION C: Consists of TWO questions: QUESTIONS 5–6 of which the candidate must choose only ONE
The above papers must NOT be written on the same day.
The detailed requirements of each section (per question paper) are indicated on the next page.
SECTION A (COMPULSORY) TOTAL: 30 QUESTION 1 1.1 MULTIPLE-CHOICE ITEMS (lower order) WITH 4 POSSIBLE options per main topic = 8 items (2 marks per item) (8 x 2)(16) 1.2 MATCHING ITEMS (COLUMN A AND B) (lower order) FOUR items per main topic = 8 items (1 mark per item) (8 x 1)(8) 1.3 GIVE THE TERM (lower order) THREE items per main topic = 6 items (1 mark per item) (6 x 1)(6) Abbreviations, acronyms and examples are not acceptable. Although the questions are regarded as lower order, they may be classified as EASY (e.g. open economy), MODERATE (e.g. real flow) or DIFFICULT (e.g. autonomous consumption).
SECTION B (ANSWER TWO QUESTIONS IN THIS SECTION) TOTAL: 80 QUESTIONS 2–4 (THREE QUESTIONS) ONE question per MAIN TOPIC and ONE combination question between the 2 MAIN TOPICS. (50%/50%)) 2.1 Short items 2.1.1 Lower order (2 ITEMS) Name TWO. (2 x 1) (2) 2.1.2 Middle order (1 ITEM), e.g. How, why and what (an application type of question). (1 x 2) (2) 2.2–2.3 TWO data response questions (middle order), e.g. Study the following graph/cartoon/ table/extract/real data and answer the questions that follow. (10 x 2)(20)
Items in the data response questions must be 'scaffolded' from easy to difficult: 2 marks easy, 4 marks moderate and 4 marks difficult
The answers to the first 2 questions (1 mark each) may appear in the data, but will be one of application
Data response questions give a context on what aspects to be assessed, and answers would not necessary appear in the data
2.4 ONE single question (middle order), e.g. explain, discuss, distinguish or differentiate between, draw a correctly labelled graph/draw a correctly labelled graph and explain//use the given graph and explain.(8) 2.5 ONE single question (higher order), e.g. how, why or evaluate.(8) Higher order questions are grounded in the content. These types of questions test critical thinking, where candidates should be able to apply their knowledge, through logical reasoning and also have an awareness of their current economic climate. Content (covered by discuss/examine/describe/ analyse/explain/evaluate/compare/assess/justify/construct/calculate) can be assessed as higher-order questions. Answers will not necessarily be found in textbooks.
With regard to what, how and why questions, learners must be guided by the mark allocation when answering the question. E.g. Why … (2 marks) will require ONE discussion point and Why … (8 marks) will require THREE to FOUR discussion points depending on examples given. Responses must give effect to the contextual demands of the question!
[40]
SECTION C (ANSWER ONE QUESTION IN THIS SECTION TOTAL: 40 QUESTIONS 5–6 (TWO ESSAY QUESTIONS) ONE question per MAIN TOPIC
STRUCTURE OF ESSAY
MARK 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.
Do not include any part of the question in your introduction.
Do not repeat any part of the introduction in the body.
Avoid saying in the introduction what you are going to discuss in the body.
Max. 2
Body Main part: Discuss in detail/In-depth discussion/Examine/Critically discuss/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain / Draw a graph and explain / Use the graph given and explain/Complete the given graph/ Additional part: Give own opinion/Critically discuss/Evaluate/Critically evaluate/ Calculate/Deduce/Compare/Explain/Distinguish/Interpret/Briefly debate/ How/Suggest /Construct graph (foreign exchange market, multiplier)
Max. 26
Max. 10
Conclusion Any higher-order conclusion should include:
A brief summary of what has been discussed without repeating facts already mentioned
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
Max. 2
TOTAL
40
2.3 Cognitive-level grid
MAIN TOPICS
SECTION A
SECTION B
SECTION C
Multiple choice
Matching Items A and B
Give the term
Short items
Data response
Single Questions
Essay Questions
Lower
Lower
Lower
Lower
Middle
Middle
Middle
Higher
Lower
Higher
PAPER 1
Macroeconomics
4 x 2 = 8
4 x 1 = 4
3 x 1 = 3
2x1=2
1 x 2=2
2 x 10 = 20
8
8
10
30
Economic Pursuits
4 x 2 = 8
4 x 1 = 4
3 x 1 = 3
2x1=2
1 x 2=2
2 x 10 = 20
8
8
10
30
Macro and Pursuits
2x1=2
1 x 2=2
2 x 10 = 20
8
8
TOTAL
16
8
6
4
4
40
16
16
10
30
PAPER 2
Microeconomics
4 x 2 = 8
4 x 1 = 4
3 x 1 = 3
2 x1=2
1 x 2=2
2 x 10 = 20
8
8
10
30
Contemporary Economics
4 x 2 = 8
4 x 1 = 4
3 x 1 = 3
2 x1=2
1 x 2=2
2 x 10 = 20
8
8
10
30
Micro and Contemporary
2 x1=2
1 x 2=2
2 x 10 = 20
8
8
TOTAL
8
6
4
4
40
16
16
10
30
PAPER 1 AND PAPER 2
COGNITIVE LEVELS
MARKS
%
Lower Order (Levels 1 and 2)
44
29.3
Middle Order(Levels 3 and 4)
60
40.0
Higher Order(Levels 5 and 6)
46
30.7
NOTE: Cognitive-level deviations not to exceed 2,67%. 2.4 A guideline to marking Mark allocation depends on the cognitive level of the question, as follows:
SECTION A
Multiple choice items: 2 marks per item (8 x 2) 16
E.g. Oligopolies that collude in a formal manner are called … A. cartels. ✓✓ (Items from this section are easy/moderate lower-order questions, and requires only recall the candidate must only identify a particular economic concept from a description given )
Matching items (Column A and B): 1 mark per item (8 x 1) (8)
E.g. Inflation Sustained increase in the general price level ✓ (Items from this section are easy/moderate lower-order questions, and requires only recall The candidate must match a particular economic item in Column A with a description given in Column B)
Give one term for definition given: 1 mark per item (6 x 1) (6)
E.g. The system of processing waste material into new products. Recycling ✓ (Items from this section are moderate/difficult lower-order questions and require recall. The candidate must be able to recall a particular economic concept from a given definition) NOTE: In these items the answers are not provided.
SECTION B
List TWO 1 mark per item (2 x 1) (2)
E.g. Give TWO reasons for market failure. Externalities✓ Missing markets ✓ Imperfect competition ✓ (This is an easy lower-order question and requires recall. It is therefore expected that the candidate shall provide the correct facts according to the approved textbooks.)
What? Why? How? and Show 2 marks for a correct answer (1 x 2) (2)
E.g. What effect will a weak currency have on exports? It will lead to an increase in exports.✓✓ (This is an easy to moderate middle-order question and requires understanding. It is therefore expected that the candidate shall provide the correct reasoning/understanding of the particular concept or fact)
TWO data response questions 2 x 10 (20)
Items on a : Cartoon, Extract, Graph, Table, Pictures, or a mix (This is an easy to difficult middle-order question and requires insight and understanding of the particular topic) Questions range from easy to difficult. E.g. GRAPH
2.2.1 What is the selling price of the business above? (1) 2.2.2 Identify the letter in the graph above that represents the loss minimising point. (1) 2.2.3 Briefly describe the term monopoly. (2) 2.2.4 Why is the equilibrium position above typical of the short run? (2) 2.2.5 Determine the loss for this business. Show ALL calculations. (4)
Paragraph question (4 x 2) or (2 x 4) (8)
(This is a moderate to difficult middle-order question and requires insight and understanding of the particular topic, candidates must be able to recall, reason facts from approved textbooks and then substantiate/demonstrate the facts with appropriate examples) Allocation of marks: TWO marks will be allocated per fact. Listing of examples will only count ONE mark. If an example is appropriately explained, TWO marks will be allocated. If facts are only listed, a maximum of FOUR marks will be allocated.
Paragraph question (4 x 2) or (2 x 4) (8)
(This is a higher-order question and requires deeper insight and understanding of the particular topic. Candidates must be able to give their own opinion and then substantiate / demonstrate arguments against / in favour of or to recommend solutions on certain issues. Application of knowledge.) Candidates must be able to:
give their own opinion and then substantiate / demonstrate arguments against or in favour
evaluate and critique certain actions/values… in the economy
analyse certain aspects … in the economy by unpacking and critique
use economic models e.g. graph and diagram to explain certain aspects of economics
SECTION C
Essay question (40)
Introduction (2)
(The introduction is a moderate to difficult lower-order response, A candidate can use an accepted definition or an appropriate explanation of the topic under discussion as an introduction) Allocation of marks: TWO marks will be allocated if a candidate can provide a correct definition or an appropriate explanation of the topic under discussion.
Body: Main part (26)
(The main part is a higher-order response which contains some lower-order elements. E.g. The listing of headings can be regarded as a lower-order response)
Example: If the question reads; 'Discuss how fiscal policy can be used to smooth out business cycles'.
The answer must relate to the issue surrounding taxes and government expenditure by showing how they are used in the smoothing of cycles.
If a learner only discussed fiscal policy without clearly showing the relationship in smoothing of cycles, the learner cannot obtain maximum marks.
Guard against accepting information under a particular heading just because it appears in the text. Sometimes the information does not relate to the question asked.
Keep in mind that textbooks give more or less information about a topic than is required by the examination guidelines. In terms of the examination guidelines, more than one question can be asked on a particular topic. The learner must be able to select/ extracts the relevant information and then relate it to the question.
Allocation of marks:
ONE mark will be given for a fact that is not written in context / listed / not fully explained.
TWO marks will be given for a fact that is fully explained and relates to the question.
E.g. If the candidate refers to price leadership in his response, and the candidate writes: 'price leader', (a single concept without any further detail) the candidate will only get ONE mark. If the candidate writes; 'the price leader is usually the largest or dominant business in the industry', the candidate will get TWO marks.
Body: Additional part (10)
(This is a moderate to difficult higher-order question and requires deeper insight and understanding of the particular topic. Candidates must be able to:
Give their own opinion and then substantiate/demonstrate arguments against or in favour
Evaluate and critique certain actions/values… in the economy
Analyse certain aspects … in the economy by unpacking and critique
Use economic models, e.g. graphs and diagrams, to explain certain aspects of economics
Allocation of marks:
Guard against accepting information under a particular heading just because it appears in the text. Sometimes the information does not relate to the question asked.
It must be remembered that textbooks gives more/less information about a topic than is required by the examination guidelines. In terms of the exam guideline more than one question can be asked on the topic. The learner must be able to select the relevant information and relate it to the question.
ONE mark will be given to a fact that is not in context / not fully explained.
TWO marks will be given for fact that is fully explained and is within the context of what is been asked in the question.
Conclusion (2)
(The conclusion is a moderate to difficult lower-order response, the candidate can use any appropriate final/finishing remark on the topic under discussion) Allocation of marks: TWO marks will be given if a candidate can provide an appropriate finishing/final remark on the topic under discussion) NOTE: To develop critical thinking within the subject economics teachers must comply with the prescribed way of marking, it should start at Gr.10 level.
2.5 Command verb detail The following list of command verbs, among others, gives an indication of the scope and depth of examinable content:
COMMAND VERB
LINK TO EXAMINATION PAPERS
Discuss in detail/In-depth discussion/ Examine/Critically discuss/Analyse/ Compare/Evaluate/Distinguish/ Differentiate/Explain/Assess/Debate/ Draw a graph and explain/Use the graph given and explain/Complete the graph
Main part in essay question
Higher order 20 marks (levels 5 and 6)
Lower order 10 marks (levels 1 and 2)
Give own opinion/Critically discuss/ Evaluate/Critically evaluate/Construct a graph/Calculate/Deduce/Compare/ Distinguish/Interpret/Justify/Debate/ Propose
Additional part in essay question
Higher order 10 marks (levels 5 and 6)
Give own opinion/Critically discuss/ Evaluate/Critically evaluate/Draw a graph and explain/Use the graph given and explain/Complete the graph/ Calculate/Deduce/Compare/Show/ Distinguish/Interpret/Briefly discuss/ Explain/Justify/Briefly debate
Single Questions
One 8 marks middle-order question (levels 3 and 4)
One 8 marks higher-order question (levels 5 and 6)
Use the: graph/table/diagram/cartoon/ extract/data/information/text and …/ Calculate/Deduce/Compare/Distinguish/ Interpret/Briefly discuss/Briefly explain/ Define/Give a broad outline/Briefly debate/What?/How?/Why?/Show/Give own opinion
Data Response Questions
Middle-order questions
Levels 3 and 4
10 marks each,
Items will range from easy to difficult
Choose the correct answer (multiple- choice items)/Match Columns A and B/ Give one concept for/List/What?/How?/ Why?/Show
Short and Objective items
Lower-order items
1 and 2
Items vary from easy to difficult
1 or 2 marks each
THE FOLLOWING ILUSTRATES THE TYPES OF LEARNER RESPONSES IN THE DIFFERENT COGNITIVE LEVELS
HIGH ORDER
LEVEL 6: CREATING
Can the learner create new opinions or points of view?
Propose alternative solutions.
Develop new unique structures, systems, models, approaches, ideas and creative thinking.
Develop plans or procedures, design solutions, integrate methods, resources, ideas, or new approaches, and write protocols or contingencies.
Evaluate scenarios; make judgments with evidence and state conclusions appropriately.
Assess effectiveness of whole concepts, in relation to values, outputs, efficacy, viability; critical thinking, strategic comparison and review; judgement relating to external criteria
Review strategic options or plans in terms of efficacy, return on investment or cost-effectiveness, practicability; assess sustainability; perform a SWOT analysis in relation to alternatives; produce a financial justification for a proposition or venture, calculate the effects of a plan or strategy; perform a detailed and cost benefit analysis with recommendations and justifications
MIDDLE ORDER
LEVEL 4: ANALYSES
Can the learner distinguish between the different parts?
Collect process and analyse information from various sources to evaluate problems and issues.
Interpret elements and principles
Identify constituent parts and functions of a process or concept
Break down ideas into simpler parts
LEVEL 3: APPLY KNOWLEDGE
Can learners use/apply knowledge in a new way?
Use or Apply knowledge (e.g. terms, concepts, theories and methods) and skills (e.g. communication, critical thinking) to discuss problems and issues.
Put theory into practice , generate solutions for economic issues
Apply knowledge to actual situations
LOWER ORDER
LEVEL 2: COMPREHENSION / UNDERSTANDING
Can the learners explain ideas or concepts?
Understand meaning, re-state data in one's own words, explain or interpret meaning from a given scenario or statement, suggest treatment, reaction or solution to given problem, create examples or metaphors
Demonstrate an understanding of the fact
LEVEL 1: KNOWLEDGE/REMEMBERING
Can the learner recall, remember or recognize the information, ideas and principles in the approximate form in which they were learnt?
Demonstrate knowledge (remembering) of the specified content (e.g. key words or concepts or terminologies).
NOTE: Take cognisance of the following:
'Research the world over tells us: that in many instances the only reason why learners can perform with a degree of competency on their final exams, is that the questions on the exams are nearly carbon copies of questions they have seen before; the learners are not being asked to think'.
2.6 Higher-order questions Higher-order questions place advanced cognitive demand on learners. It encourages learners to think beyond literal questions. Higher-order questions promote critical thinking skills because these types of questions expect learners to apply, analyse, synthesize, and evaluate information instead of simply recalling facts. Issues from the real world can be used to either support or refute a point of view. Higher-order questions require one to make inferences, draw relevant and insightful conclusions and use their knowledge in new situations. It also requires one to relate their thinking to other situations and to their own background knowledge. Teachers need to realise that there are many more ways to teach than by rote learning. There is teaching for understanding, decision making, problem solving, and connecting a part to a whole, detail to concept, and concept to concept. There also is inference, prediction, analysis for bias, and learning for transfer. Each of these processes requires some form of critical thinking. Opportunities for learners to develop critical thinking processes are not found in classrooms dominated by the regurgitation of factual content. They are found in classrooms where active learning is an essential component.
Require learners to engage with unrehearsed or unfamiliar contexts.
Ask for deep thinking.
Grounded in CAPS curriculum content.
Types of higher-order-thinking questions: (What? How? Why?) Analysis: These questions ask learners to dissect key information and analyse essential concepts, themes and processes. For example:
How is x related to y?
What are the major reasons for?
What is the impact of b on c?
What is the problem faced by …?
What is the main idea? Theme?
What are some of the problems of …?
How is … similar to/different from …?
Why did … changes occur?
Evaluation: These questions require learners to formulate and justify judgements and criticisms based upon clearly-articulated evaluative criteria. For example:
Provide a better solution for …?
What are the consequences of …?
What are the pros and cons of …?
What are the alternatives for …?
How effective are…?
Creativity/Synthesis: These questions require learners to formulate a holistic summary of key ideas; provide an integrated, cohesive, sustained response, make inferences; reformulate, reconstruct or create scenarios. Own voice is critical. For example:
Based on these facts, what predictions would you make?
Propose a solution to this problem.
How can the errors be fixed?
What alternative will you suggest …?
*POINTS TO CONSIDER WHEN MARKING HIGHER COGNITIVE QUESTIONS USING A MARKING GUIDELINE
It is important to note that a marking guideline essentially gives the marker direction about what answers are acceptable. The learner does NOT have to present answers exactly as in the marking guideline (except objective-type questions). In terms of other questions (SECTION A, SECTION B, list, define, etc.) the essence of what the learners say must be covered by the marking guideline.
When marking a particular question, e.g. 8 marks, it is important that the learner presents his/her answer in such a way that it answers the question.
If a learner gives an example only, then 1 mark may be awarded. An explanation of the example can earn further marks.
In an 8-mark question the maximum marks a learner can earn for examples and explanations should be 4 marks. The marker must check at all times whether the explanation given, answers the question. In higher-order short questions, a maximum of 2 marks (25%) will be allocated for merely listing of facts and examples.
We need to guard against accepting information under a particular heading because it appears in the text. Sometimes the information does not relate to the question asked.
It must be remembered that textbooks give more/less information about a topic than is required by the examination guidelines. In terms of the examination guidelines more than one question can be asked on a particular topic. The learner must be able to select/extract the relevant information and relate to it in the question.
Sometimes textbooks have information under a heading that seems abstract when compared to the exam requirement. The important aspect to bear in mind is that not all information in the text may be relevant to the question.
3. CONTENT
MAIN TOPIC: MACROECONOMICS
TOPIC 1: CIRCULAR-FLOW MODEL
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Present the circular-flow model as a macroeconomic model: 1.1 The open-economy circular-flow model
Equations
Markets
1.2 National account aggregates National account conversions
1.3 The multiplier
(Focus: Relevant concepts, interaction between participants, markets, flows, injections, leakages and equilibrium in the economy)
Briefly describe the concepts related to the circular flow.
Draw and interpret an open four-sector circular-flow diagram.
Discuss the 4 participants and inter relationships between them:
Household, business, state and foreign sector
Real flows and money flows
Show the relationship of the financial sector in the circular flow
Justify the equality: L = J and indicate its component elements:
Injections (J = I + G + X) -
Leakages (L = S + T + M)
Brief explanation of an economy in equilibrium: - Y = C + I + G + (X – M)
Relate aggregate spending (consumption) to income.
Explain concepts autonomous consumption and marginal propensity to consume (mpc)
Discuss in detail the markets within the FOUR-SECTOR model:
Factor markets: (labour, resource, capital) - Product markets: (consumer and capital goods, durable, semi-durable and non-durable)
Financial (monetary and capital)
Foreign exchange market
Link the operation of financial and foreign exchange markets to the participants of the circular flow
(Focus: Relevant concepts, deducing, interpretation, analyses of aggregates and conversions)
Briefly describe the concepts GDP and GNP
Discuss the THREE methods to determine GDP using data tables:
Production GDP(P)
Income GDP(I)
Expenditure GDP(E)
Analyse, interpret and derive aggregates from data tables
Analyse the national account conversions:
Factor cost, basic prices, market prices
Taxes and subsidies on production
Taxes and subsidies on products
GDP to GNP
Explain the purpose of the System of National Accounts (SNA) as outlined by the United Nations (UN)
(Focus: Relevant concepts, calculations, interpretation or graphical explanation, deduce and apply)
Briefly describe the concept multiplier
Explanation of the multiplier process. (Relate to circular flow and examples).
Calculate the value of the multiplier using the basic formulae (2-sector model): 1 1 - mpc 1 1 - mps ΔY ΔE
Application of basic formula (2-sector model)
Brief reference to the impact of a 3-sector and 4-sector economy on the value of the multiplier
Explain the multiplier with the use of a well-labelled graph.
TOPIC 2: BUSINESS CYCLES
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Analysis and explanation of business cycles, and how they are used in forecasting. 2.1 The composition and features of business cycles 2.2 Explanations/Causes 2.3 Government policy 2.4 The new economic paradigm (smoothing of cycles) 2.5 Features underpinning forecasting business cycles
(Focus: Relevant concepts, composition, explanation, government policies, new economic paradigm and features underpinning forecasting in respect of South African conditions)
Briefly describe the concepts
Briefly explain the nature of business cycles
Demonstrate/Illustrate a typical business cycle
Use a diagram and briefly discuss the different phases in a business cycle
Broadly outline the real business cycle.
Discuss the exogenous (monetarist) explanation
Discuss the endogenous (Keynesian) explanation
Compare both explanations
Give a broad outline of the types of business cycles (Kitchin, Jugler, Kuznets and Kondratieff)
Explain the composition of the following policies:
Fiscal policy
Taxes and government expenditure
Briefly relate to the budget - Monetary policy o Interest rates (repo rate)
Open market transactions
Cash reserve requirement
Moral suasion
Discuss in detail 'The new economic paradigm'/Explain the 'smoothing of cycles'
Explain demand-side policies.
Explain clearly how monetary and fiscal policies (expansionary and contractionary) can be used in smoothing out business cycles
Relate to inflation (peak) and unemployment (trough) by using the Phillips curve - Explain supply-side policies and how aggregate supply can be stimulated through:
Reduction in costs
Improving efficiency in inputs o Improving efficiency in markets
Explain the effect of demand-side and supply-side policies using a graph (aggregate demand and aggregate supply).
Briefly describe the relevant concepts
Discuss in detail the features underpinning forecasting: - Indicators
Leading
Coincidence
Lagging
Composite
Length of a cycle
Amplitude
The trend line
Extrapolation
Moving averages
Use a diagram and discuss the cycle length, amplitude and the trend line as features underpinning forecasting.
TOPIC 3: PUBLIC SECTOR
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Evaluate the role of the public sector in the economy with special reference to its socio-economic responsibility in the South African context 3.1 The composition and necessity of the public sector 3.2 Problems of public sector provisioning 3.3 Objectives of the public sector 3.4 Budgets 3.5 Fiscal policy (including Laffer curve) 3.6 Public sector failure
(Focus: Composition and necessity of public sector, problems of public sector provisioning, objectives, fiscal policy and reasons for public sector failure)
Briefly describe the composition of the public sector
Explain the necessity of the public sector:
To supply public goods
To conserve resources
To manage the economy
Discuss how each of the following factors contributes to poor public sector provisioning:
Accountability
Efficiency
Assessing needs
Pricing policy
Parastatals
Privatisation/Nationalisation
Discuss in detail the main objectives of the public sector in the economy
Economic growth
Full employment
Exchange rate stability / Balance of Payments equilibrium
Price stability
Economic equity
Broadly outline the various budgets
Emphasise public debt as a % of GDP
Analyse current main budget data relating to:
Taxes
Sources of income
Expenditure allocation
Personal income tax tables (tax calculation)
Differentiate between Medium Term Expenditure Framework (MTEF) and Medium Term Budget Policy Statement (MTBPS)
Explain how socio-economic rights are embedded in the budgets of the South African government
Briefly discuss the following:
The main variables (tax and government expenditure)
Features of fiscal policy: goal-bound, demand-based, cyclical
Discuss the effects of fiscal policy.
Income distribution
Consumption
Price level
Incentives/Disincentives in relation to the Laffer curve
(Draw and interpret the Laffer curve)
Discretion
Briefly explain the features of public sector failure:
Ineffectiveness
inefficiency
Discuss in detail the reason(s) for public sector failure ( link them to typical problems experienced through public sector provisioning)
:
Management failure
Apathy
Lack of motivation
Bureaucracy
Politicians
Structural weaknesses
Special interest groups
Briefly explain the following effects of public sector failure:
Allocation of resources
Economic instability
Distribution of income
Social instability
Infuse where appropriate: national macroeconomic policy and service delivery with regard to socio-economic rights, education, health and the environment, social security, convention of the rights of the child, taxation and compensation for human rights abuses.
TOPIC 4: FOREIGN EXCHANGE MARKETS
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Examination of the foreign exchange market, the establishment of exchange rates, and show how the Balance of Payments Account is affected 4.1 The main reasons for international trade 4.2 The Balance of Pay 4.3 Corrections of Balance of Payments surplus and deficit (disequilibria) 4.4 Foreign exchange markets 4.5 The establishment of foreign exchange ratesments
(Focus: Reasons for and effects of international trade, balance of payments, foreign exchange, foreign exchange markets and the correction of disequilibria in the foreign exchange market)
Discuss in detail the reasons for international trade Demand reasons:
Size of population - Income levels - Change in the wealth of the population
Preferences and taste
The difference in consumption patterns
Absolute and Comparative advantage
Supply reasons:
Natural resources
Climatic conditions
Labour resources
Technological resources
Specialisation
Capital
Briefly discuss the following effects of international trade:
Specialisation
Mass production
Efficiency
Globalisation
Briefly describe the concepts
Explain the value/purpose of the BoP
*Discuss the composition of the current BoP (which changed recently) in terms of the different accounts. Each item within the accounts should be explained.
CURRENT ACCOUNT Goods exports + Net gold exports + Services receipts + Income receipts less Merchandise imports less Payment for services less Income payments Current transfers (net receipts) Balance on Current Account Memo item: trade balance
CAPITAL TRANSFER ACCOUNT NET LENDING TO (+) OR BORROWING FROM (-) REST OF THE WORLD
FINANCIAL ACCOUNT Net direct investment Net portfolio investment Net financial derivatives Net other investments Reserve assets (SDR allowances) Balance on Financial Account Memo item: balance on Financial Account excluding reserve assets. Unrecorded transactions
Discuss the different measures to correct the BoP surplus and deficit (disequilibria):
Interest rates
Import controls
Borrowing and lending
Change in demand
Export promotion
Import substitution
Change in exchange rates
Describe the concepts (types of exchange rates, appreciation, depreciation, devaluation, revaluation, foreign exchange control)
Supply and demand of foreign exchange
Factors affecting demand
Factors affecting supply
Exchange rate equilibrium (draw and interpret graphs)
Changes to equilibrium (draw and interpret graphs)
Briefly explain interventions in the market
Briefly explain the following exchange rate systems:
Free floating (linked to South Africa)
Managed floating
Fixed
Describe the terms of trade under the following headings:
Description
Formula
The effect on the economy
MAIN TOPIC: MICROECONOMICS
TOPIC 5: PERFECT MARKETS
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Examine the dynamics of perfect markets with the aid of cost and revenue curves 5.1 Perfect competition 5.2 Individual business and industry 5.3 Market structure 5.4 Output, profits, losses and supply 5.4.1 Individual business 5.4.2 The industry 5.5 Competition policies
NOTE:
Review cost and revenue tables and curves done in Grade 11.
Distinguish between short and long term/run.
Graphs can tested as a middle order 8 marker in the following ways”
Draw a graph only/draw a graph and explain/provide an explanation to a given graph
Briefly describe the concept
Examine the characteristics of a perfect market.
Distinguish between individual businesses and the industry.
Use graphs to explain the derivation of the demand curve for the individual business.
Construct a revenue table to show that D= P=AR=MR
Use graphs to explain profit maximisation using:
Total cost and total revenue curves
Marginal cost and marginal revenue curves
Derive the supply curve from cost curves
The examination of individual business and industry should be accompanied by an analysis of tables and graphs.
Briefly describe the concept
Briefly recap comparisons between the main market structures done in Grade 11 (number of business, nature of business, examples, entry into market, prices). Refer to 6.5 for detail comparison, after completion of all four market structures.
Discuss in detail the various equilibrium positions with the aid of graphs:
Economic profit
Economic loss
Normal profit (short and long run)
Explain economic profit/economic loss/normal profit with the aid of graphs(short run).
Explain normal profit with the aid a of graph (Long run) Explain shutdown point using costs and revenue (FC, VC, TC, TR) and explain graphically (AR and AVC)
Show the relationship between the industry equilibrium positions and the individual firm’s equilibrium positions with graphs, i.e. how entry and exit into the market influence equilibrium position from the short run to the long run.
Describe the aims/objectives of the competition policy Briefly describe the Competition Act, 1998 (Act 89 of 1998), as amended
Explain the role of the Competition Commission, Competition Tribunal and Competition Appeal Court
Explain South Africa's anti-monopolistic policy
Evaluate the successes/failures of the competition policy. (relate to current examples)
TOPIC 6: IMPERFECT MARKET
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Examine the dynamics of imperfect markets with the aid of cost and revenue curves 6.1 The dynamics of imperfect markets with the aid of cost and revenue curves 6.2 Monopolies 6.3 Oligopolies 6.4 Monopolistic competition 6.5 Compare and contrsast market structures
Explain the following in an imperfect market:
Income/Revenue o Revenue schedule (a review)
Average and marginal revenue curves
Costs
Cost schedule (a review)
Average and marginal cost curves
Discuss the monopoly in detail (with/without the aid of graphs):
Concept - Characteristics
Economic profit, economic loss (short run)
Economic profit (Long-run )
Briefly describe the concept
Emphasise and highlight good practical examples of businesses in this market
Examine the characteristics in detail
Distinguish between natural and artificial monopolies
Explain the downward slope of the demand curve (AR)
Explain the marginal revenue curve (Show the relationship between the demand curve (AR) and the MR curve graphically)
Explain, with the aid of graphs, economic profit and economic loss
Explain the long-run equilibrium position with the aid of a graph
Examine the oligopoly in detail:
Concept
Characteristics
Kinked-demand curve
Briefly describe the concept
Emphasise and highlight good practical examples of businesses in this market
Discuss collusion (relate to current examples of collusive behaviour)
Distinguish between overt (explicit) collusion (cartels) and tacit (implicit) collusion (price leadership)
Broad outline of prices and production levels
Broad outline of the rationale of the kinked demand curve
Use the kinked demand curve and explain why oligopolists are reluctant to compete on prices.
Briefly describe the concept
Emphasise and highlight good practical examples of businesses in this market.
Briefly discuss product differentiation in this market
Examine the characteristics
Explain non-price competition (emphasise, amongst others, advertising, product differentiation and branding among other examples of non-price competition)
Broad outline of prices and production levels
Compare and contrast any TWO types of market structures (perfect to imperfect/imperfect to imperfect) in detail in terms of the following.
Number of businesses
Nature of product
Entrance
Control over prices
Information
Examples
Demand curve
Economic profit/loss
Decision-making
Collusion
Productive/Technical efficiency
Allocative efficiency
TOPIC 7: MARKET FAILURE
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Explain the reasons for and consequences of market failures, reflecting on the cost-benefit analysis 7.1 The causes of market failures 7.2 Consequences of market failures 7.3 Cost-benefit analysis
Discuss in detail how the following factors lead to the misallocation of resources in the market:
Externalities
Missing markets
Imperfect competition
Lack of information
Immobility of factors of production
Imperfect distribution of income and wealth
Compare the following inefficiencies with the aid of a well-labelled graph:
Productive inefficiency
Allocative inefficiency
Describe the following with the aid of well-labelled graphs:
Negative externalities
Positive externalities
Discuss in detail state intervention as a consequence of market failures, with the aid of relevant graphs
Direct control
Imperfect markets
Minimum wages
Maximum prices
Minimum prices
Taxes and subsidies
Subsidies on goods and services
Redistribution of wealth
Government involvement in production
Describe the concept cost-benefit analysis
Describe the reasons for a CBA
Apply the CBA in practice
MAIN TOPIC: ECONOMIC PURSUITS
TOPIC 8: PROTECTIONISM AND FREE TRADE
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Discussion of protectionism and free trade; Evaluate South African international trade policies and major protocols in terms of the following: 8.1 Export promotion 8.2 Import substitution 8.3 Protectionism 8.4 Free trade 8.5 A desirable mix 8.6 An evaluation
(Focus on export promotion, import substitution, protectionism and free trade)
Discuss in detail export promotion:
Definition
Methods
Reasons/Advantages
Disadvantages
Discuss import substitution:
Definition
Methods
Reasons/Advantages
Disadvantages
Discuss in detail the arguments in favour of protectionism:
Industrial development
Infant industries
Stable wage levels and high standard of living
Increased employment
Self-sufficiency and strategic industries
Prevention of dumping
Stable exchange rates and BoP
Protection of natural resources
Explain the following arguments in favour of free trade:
Specialisation
Economies of scale
Choices/Increased welfare
Innovations/Best practice
Improved international relations
Briefly describe the concept desirable mix
Briefly explain the desirable mix between:
Import substitution and export promotion
Protection and free trade
Explain trade liberalisation and the role of the World Trade Organisation (WTO) as part of globalisation
Briefly explain the different forms of economic integration (cite appropriate examples)
Briefly evaluate the following South Africa's trade policies:
Import substitution and export promotion
Protection and free trade
Briefly evaluate the successes and failures of the following South Africa's trade protocols:
Southern African Custom Union (SACU)
Multilateral Monetary Area (MMA)
Southern Africa Development Community (SADC)
African Union (AU)
European Union (EU)
Mercusor
AGOA
Japan
South Africa's Partnership Forum
Brazil, Russia, India, China and SA (BRICS)
TOPIC 9: ECONOMIC GROWTH AND DEVELOPMENT
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Compare South African growth and development policies in terms of international benchmarks; also highlight the North/South divide 9.1 The demand-side approach 9.2 The supply-side approach 9.3 Approaches to growth and development policies used in South Africa 9.4 The North/South divide
Distinguish between growth and development
Discuss in detail the demand-side approach in promoting growth and development in South Africa
Give an overview of the demand-side approach:
The monetary policy (interest rate changes, open market transactions, moral suasion)
The fiscal policy (progressive personal income tax, wealth tax, cash benefits, natural benefits, other redistribution, land restitution and redistribution, subsidies on property)
Discuss the supply-side approach in promoting growth and development in South Africa
Give an overview of the supply-side approach:
Efficiency and effectiveness of markets o Business efficiency
The cost of doing business
Discuss in detail the following South African growth and development policies and strategic initiatives:
Reconstruction and Development policy (RDP) - Growth, Employment and Redistribution Programme (GEAR)
National Skills Development Strategy (NSDS)
Accelerated and Shared Growth Initiative for South Africa (AsgiSA)
Joint Initiative on Priority Skills Acquisition (JIPSA)
Expanded Public Works Programme (EPWP)
The New Growth Path (NGP)
National Development Plan (NDP)
Small Business Development Promotion Programme
Black Economic Empowerment Programmes
Compare countries in the North to those in the South with respect to the following:
Unequal standards of living (per capita income, life expectancy, education)
Challenges of globalisation (poverty, growth, trade)
Environment (countries in the North, countries in the South)
TOPIC 10: REGIONAL DEVELOPMENT
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Justify South Africa's industrial development policies and their suitability in terms of international best practice 10.1 Industrial development in South Africa 10.2 Regional development 10.3 South Africa's endeavours 10.4 Incentives to encourage industrial development 10.5 Appropriaten 10.6 Appropriateness of South Africa's regional development policies in terms of benchmark criteria 10.7 Small business development 10.8 The appropriateness of black economic empowerment in the SA economyess of South Africa's industrial policies
Briefly describe the concept 'industrial development'
Explain the reasons for industrial development
Briefly explain South Africa's Industrial Development Policies:
The focus of the National Industrial Policy Framework (NIPF)
The focus of the Industrial Policy Action Plan (IPAP)
Briefly explain the following Industrial Development Strategies:
The focus of the National Research and Development Strategy (NRDS)
The focus of the Integrated Manufacturing Strategy (IMS)
Outline the aims of regional development
Discuss in detail South Africa's initiatives (endeavours) in regional development:
Spatial development initiatives (SDI's)
Corridors
Industrial Development Zones (IDZ's)
Special Economic Zones (SEZ's_
Discuss spatial development initiatives (SDIs) in South Africa and link to private-public partnerships.
Discuss corridors in South Africa
Discuss Industrial Development Zones (IDZs) in South Africa
Discuss Special Economic Zones (SEZs) in South Africa. (Relate this new development to the shortcomings of the IDZs and the benefits of SEZs)
Name the various spatial initiatives (SDI, corridors). Indicate/Identify them on a map of SA
Briefly discuss the incentives used by the SA government to improve industrial development:
Small Businesses Support Program
SEDA Technology Program (STP)
Skills Support Program (SSP)
Critical Infrastructure Facilities
Custom-free incentives
Foreign investment incentives
Strategic Investment Program
Services to Business Processes
Outline the appropriateness of South Africa's industrial policies.
Briefly discuss regional development in terms of the following benchmark criteria
Free market orientation
Competitiveness
Sustainability
Good governance
Provisioning of resources
Investment of social capital
Integration
Partnerships
Briefly evaluate South Africa's regional development policies in terms of the above benchmarks.
Explanation and evaluation
Explanation and evaluation of BBBEE
TOPIC 11: ECONOMIC AND SOCIAL INDICATORS
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Analyse South Africa's economic and social performance indicators and their uses 11.1 Assessing the performance of an economy 11.2 Economic indicators 11.3 Social indicators 11.4 International comparisons
Briefly describe the concepts
Briefly discuss the importance of measuring the performance of the economy
Discuss in detail the following economic indicators:
Inflation rate indicators
Production prices (PPI)
Consumer prices (CPI)
Foreign trade indicators
Terms of trade
The exchange rate
Employment indicators
Economically active population (EAP)
Employment rate
Unemployment rate
Productivity indicators
Labour productivity
Remuneration per worker
Interest rate indicators
Repo rate (link to other interest rates such as prime rate)
Money supply indicators
M1
M2
M3
Discuss in detail the following social indicators:
Demographic indicators
Population growth
Life expectancy
Nutrition and health indicators Nutrition
Malnutrition
Obesity
Health
Child mortality
Under 5 mortality
Spending on health
Access to clean water
Access to sanitation
Education
Percentage public-sector spending
Percentage enrolment in secondary schools
Services
Electricity
Refuse/Garbage removal
Water supply
Sanitation
Housing and urbanisation Housing
Number of houses completed
Urbanisation
Natural growth in population
Migration
Founding of new towns
Compare South Africa's growth and development performance with that of other countries by focusing on the following:
Globalisation
International standardisation (IMF, World bank, UN)
Financial aid and support
Comparison and forecasting
MAIN TOPIC: CONTEMPORARY ECONOMIC ISSUES
TOPIC 12: INFLATION
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Analyse and investigate inflation and the policies used to combat it 12.1 Inflation 12.2 Types and characteristics of inflation 12.3 Causes of inflation 12.4 Consequences of inflation 12.5 The inflation problem in South Africa 12.6 Measures to combat inflation 12.7 Inflation targets
Briefly describe the concept
Briefly examine the following ways to measure inflation:
Indexes (CPI/PPI)
Weighting (Basket of goods and services)
Inflation rate (Calculations)
Explain the different types of inflation
Consumer inflation
Headline inflation
Core inflation
Administered prices inflation
Producer inflation
CPI
PPI
All inclusive inflation
Hyper inflation
Stagflation
Briefly distinguish between the different characteristics of demand-pull and cost-push inflation
Briefly compare the Monetarists' and Keynesian explanations of inflation
Discuss the causes of demand-pull inflation
Increase in household consumption
Decline in savings
Tax reduction
Access to credit
Investors' expenditure
Government expenditure
Export services
Discuss the causes of cost-push inflation
Wages
Key inputs
Exchange rate depreciation
Profit margins
Productivity
Natural disasters
Discuss in detail the consequences of inflation under the following headings:
Debtors/Creditors
Wage and salary earners
Investors and savers
Tax payers
Industrial stability
Unemployment/poverty
Balance of payments problems
Psychological influence
Discuss expectations and inflation
Broadly outline the inflation problem in South Africa
Discuss in detail the measures to combat demand-pull and/or cost-push inflation
Monetary policy
Fiscal policy
Other measures
Evaluate the success of inflation targeting
TOPIC 13: TOURISM
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Debate the economic importance of tourism for South Africa and suggest policies to promote it. Also refer to the importance of indigenous knowledge systems (IKS). 13.1 Tourism 13.2 Reasons for its growth 13.3 The effects of tourism 13.4 The benefits of tourism 13.5 South Africa's profile 13.6 Policy suggestions
Describe the relevant concepts
Briefly explain the types of tourism
Outline the ways to measure tourism
Briefly discuss the reasons for growth in the tourism industry (internationally and domestically)
Examine in detail the effects of tourism
GDP
Employment
Poverty
Externalities
Environment
Investment
Examine in detail the benefits of tourism
Households
Businesses
State
Infrastructure development
Discuss South Africa's tourism profile with reference to:
Indigenous knowledge
heritage sites
importance
Discuss the Department of Tourism's policy suggestions under the following headings:
Marketing
Spatial distribution
Taxing
Infrastructure development
TOPIC 14: ENVIRONMENTAL SUSTAINABILITY
CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES
Analyse environmental sustainability and investigate recent international agreements in this regard, for example the Rio de Janeiro and Johannesburg summits 14.1 The state of the environment 14.2 Measures to ensure sustainability 14.3 International measures
Describe the relevant concepts
Discuss the state of the environment under the following headings:
Pollution (definition and types)
Erosion
Deforestation
Climate change
Conservation
Preservation
Brief discussion of how the markets can be used to ensure sustainability under the following headings:
The market does not take care of social costs and benefits
The market fails because of specific reasons
The mechanism of the market and social costs and benefits
Discuss in detail how the government can ensure sustainable development under the following headings:
Grant property rights
Pay for environmental use
Levy environmental tax
Pay environmental subsidies
Issue marketable permits
Command and control
Voluntary agreements
Education
Discuss in detail the following problems and the international measures taken to ensure sustainable development under the following headings:
Biodiversity
Chemical waste
Hazardous waste
Climate change policy (Nations Framework Convention on Climate Change [UNFCC], Kyoto Protocol, Paris agreement on climate change)
Indigenous knowledge
Explain the major international protocols and agreements on sustainable development and evaluate their effectiveness to ensure sustainability
Rio de Janeiro summit (UNCED)/Johannesburg summit (WSSD) (Rio +10) / Rio +20 summit
Millennium Development Goals/Sustainable Development Goals
4. CONCLUSION This Examination Guidelines document is meant to articulate the assessment aspirations espoused in the CAPS document. It is therefore not a substitute for the CAPS document which educators should teach to. Qualitative curriculum coverage as enunciated in the CAPS cannot be over-emphasised. NOTE: The structure of the NSC Economics question papers (pp. 4–7) replaces the ANNEXURE included in the CAPS (pp. 45–46).
