Search for notes by fellow students, in your own course and all over the country.
Browse our notes for titles which look like what you need, you can preview any of the notes via a sample of the contents. After you're happy these are the notes you're after simply pop them into your shopping cart.
Title: Economics essays
Description: Comprehensive collection of economics Essays (68 pages)
Description: Comprehensive collection of economics Essays (68 pages)
Document Preview
Extracts from the notes are below, to see the PDF you'll receive please use the links above
lOMoARcPSD|31840077
Grade 12 Essays FOR THE NEXT Three Years 2021-2023
Amended
Economics (Germiston High School)
Studocu is not sponsored or endorsed by any college or university
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
com)
lOMoARcPSD|31840077
ESSAYS FOR THE NEXT THREE-YEAR CYCLE (2021-2023)
MACROECONOMICS- PAPER1
Discuss in detail the markets within the FOUR-SECTOR model (Circular Flow)
INTRODUCTION
The economy of a country is regarded as an open economy because of the
presence of households, producers, government, foreign sector and financial
sector as active participants in the economy
...
that satisfies some human wants or needs
Buying and selling of goods that are produced in markets e
...
Capital Goods market for trading of buildings and machinery
Consumer goods market for trading of durable consumer goods,
semi-durable consumer goods and non-durable consumer goods
...
FACTOR / RESOURCE/ INPUT MARKETS
•
•
•
Households sell factors of production on the markets: rent for natural resources, wages for
labour interest for capital and profit for entrepreneurship
The factor market includes the labour, property and financial markets
...
g
...
g
...
com)
lOMoARcPSD|31840077
•
The SARB is the key institution in the money market
CAPITAL MARKETS
•
•
•
In the capital markets long term funds are borrowed and saved by consumers and the business
sector
The Johannesburg Security Exchange (JSE) is a key institution in the capital
Products sold in this market are mortgage bonds and shares
FOREIGN EXCHANGE MARKETS
•
•
•
•
On the foreign exchange markets businesses buy/ sell foreign currency to
pay for imported goods and services
These transactions occur in banks and consists of electronic money transfers from one account
to another
The leading centres/ most important foreign exchange markets are in London, New York and
Tokyo
e
...
traveller’s cheques to travel abroad
FLOWS
•
Flows of private and public goods and services are real flows and they are accompanied by
counter flows of expenditure and taxes on the product market
• Factor services are real flows and they are accompanied by counter flows
of income on the factor market
• Imports and exports are real flows and are accompanied by counter
flows of expenditure and revenue on the foreign exchange market
[Max 26]
BODY: ADDITIONAL PART
•
•
A change in investment of R 10m will result in a change in income of R 20m
An increase in investment causes the expenditure function to shift upwards
Page 2 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
[Any other relevant conclusion]
[Max 2]
Discuss in detail 'The new economic paradigm'/Explain the 'smoothing of cycles
(Business Cycles)
INTRODUCTION
The new economic paradigm in terms of the smoothing of business cycles discourages
monetary policy makers from using monetary and fiscal policies to fine tune the economy
but rather encourages achieving stability through sound long term decisions relating to
demand and supply in the economy/smoothing out the painful part of economic down-fall
that is part of the market economy
(Accept other relevant definition/description of smoothing/new economic paradigm)
...
Demand-side policies
•
•
•
It focuses on aggregate demand in the economy
When households, firms and the government spend more, demand in the economy
increases
...
Inflation:
•
•
•
Aggregate demand increases more quickly than aggregate supply and this causes price
increases
...
This will lead to inflation (a sustained and considerable in the general price level)
Unemployment:
•
•
Demand-side policies are effective in stimulating economic growth
...
Page 3 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
As unemployment decreases inflation is likely to increase
...
The PC curve shows the initial situation
...
It shows the natural rate of unemployment, for instance 14%
At point A inflation rate is zero
...
If unemployment increases from C to B to A, inflation falls from 6% to 2% to 0%
...
Administrative costs: these costs include inspection, reports on applications
of various laws, regulations and by-laws, tax returns and returns providing
statistical
information
...
Page 4 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
It will improve the
productivity and output
...
Free advisory service: these promote opportunities to export
...
Competition: encourages the establishment of new businesses
Levelling the play field: private businesses cannot compete with public enterprises
Answers must be in full sentences and well described with examples to be able to obtain
2 marks per fact
...
(8 x 1) (8)
[Max 26]
BODY: ADDITIONAL PART
Explanation:
The above graph shows:
•
•
•
•
•
•
•
Aggregate demand (AD) and aggregate supply (AS) are in equilibrium at
point C
...
Supply is often sticky and fixed in the short term
...
Real production increases but
so does the price, in other words, with more inflation
...
The solution is to create conditions that ensure supply is more flexible
...
Page 5 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
[Accept any relevant higher order conclusion]
[Max 2]
Discuss in detail the features underpinning forecasting (Business Cycles)
INTRODUCTION
Accurate prediction is not possible in Economics
...
There are a number of techniques available to help
economists to forecast business cycles, e
...
economic indicators
OR
Successive periods of contraction and expansion of economic activities
[Accept any other relevant introduction]
[Max 2]
BODY: MAIN PART
Business cycle indicators
Leading economic indicators
•
•
•
•
•
•
These are indicators that change before the economy changes / coincide with the reference
turning point
They give consumers, business leaders and policy makers a glimpse (advance warnings) of
where the economy might be heading
...
Most important type of indicator in helping economists to predict what the economy will be like in
the future
When these indicators rise, the level of economic activities will also rise in a few months' time/an
upswing
E
...
job advertising space/inventory/sales ratio
Coincident economic indicators
•
•
•
•
They move at the same time as the economy / if the turning point of a specific time series
variable coincides with the reference turning point
It indicates the actual state of the economy
E
...
value of retail sales
...
com)
lOMoARcPSD|31840077
•
•
•
They serve to confirm the behaviour of co-incident indicators
E
...
the value of wholesalers' sales of machinery
If the business cycle reaches a peak and begins to decline, we are able to predict the value of
new machinery sold
Composite indicator
•
•
It is a summary of the various indicators of the same type into a single value
Their values are consolidated into a single value , if this is done we find a value of a composite
leading , coincident and lagging indicator
Accept ONE example from the table below:
LEADING INDICATORS
CO-INCIDENT INDICATORS
LAGGING INDICATORS
• Net new companies
registered
• Number of new vehicles sold
• Net gold and other foreign
reserves
• Number of residential
building plans passed
• Share prices
• Real export of goods (gold
excluded)
• Gross operating surplus as
% of GDP
• Labour productivity in
manufacturing
• Job advertisements in
newspapers
• Commodity prices in US $
for a basket of SA export
commodities
• Opinion survey of the
average hours of work per
factory worker in the
manufacturing sector
• Opinion survey on stocks in
relation to demand:
manufacturing and trade
• Opinion of business
confidence of
manufacturing, construction
and trade
• Opinion survey of volume of
orders in manufacturing
• Registered unemployed
• Physical volume of
manufacturing production
• Real retail sales
• Real merchandise imports
• Utilization of capacity in
manufacturing
• Gross value added at
constant prices excluding
agriculture, forestry and
fishing
• Industrial production index
• Value of wholesale, retail
and new vehicle sales at
constant prices
• Total formal non-agricultural
employment
• Employment in nonagricultural sectors
...
com)
lOMoARcPSD|31840077
Length
•
•
•
•
•
This is the time that it takes for a business cycle to move through one complete cycle (measured
from peak to peak)
It is useful to know the length because the length tends to remain relatively constant over time
...
Longer cycles show strength
...
Ways to measure lengths:
•
•
•
Crisis to crisis
Historical records
Consensus on businesses experience
Amplitude
•
•
•
•
•
It is the difference between the total output between a peak and a trough
...
g
...
(100% increase)
Trend
•
•
•
•
•
A trend is the movement of the economy in a general direction
...
The diagram above illustrates an economy which is growing – thus an upward trend (positive
slope)
Trends are useful because they indicate the general direction in which the economy is moving –
it indicates the rate of increase or decrease in the level of output
Extrapolation
•
•
•
•
Forecasters use past data e
...
trends and by assuming that this trend will continue, they make
predictions about the future
Means to estimate something unknown from facts or information that are known
if it becomes clear that the business cycle has passed through a trough and has entered a boom
phase, forecasters might predict that the economy will grow in the months that follow
It is also used to make economic predictions in other settings e
...
prediction of future share
prices
Page 8 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
Learners should be awarded 1 mark per 8 headings and examples
...
Interest rates can be reduced to encourage spending
...
The increased spending increases the level of economic activity
...
Higher levels of production, income and expenditure will be achieved
...
Inflation can be curbed by reducing money supply and availability of credit
...
Selling government bonds and securities (open market transactions) and reduce the supply of
money in circulation
...
Persuade banks to decrease lending (moral suasion)
To devaluate the exchange rate (exchange rate policy)
[Max 10]
CONCLUSION
It remain clear that business cycles must be clearly monitored through the indicators available,
policy makers must act quickly by using monetary and fiscal instruments in order to prevent
instability in the economy
...
com)
lOMoARcPSD|31840077
Discuss in detail the main objectives of the public sector in the economy (Public Sector)
INTRODUCTION:
The government provides goods and services that are under supplied by the market and
therefore plays a major role in regulating economic activity and guiding and shaping the
economy
...
These uncertainties must be limited
The SARB changed the Exchange rate from a Managed floating to a free floating
exchange rate
Price stability
•
•
•
•
Stable price causes better results in terms of job creation and economic growth
The SARB inflation target is 3% - 6% and they are successful in keeping inflation within this
target
Interest Rates, based on the Repo Rate are the main instruments used in the stabilisation
policy
The stable budget deficit also has a stabilizing effect on the inflation rate
Page 10 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
g
...
g
...
g
...
Previously SA had a 5% growth rate
In recent years the growth rate decreased steadily (presently below 3%)
Full Employment:
•
•
Compared to foreign countries unemployment is very high
...
com)
lOMoARcPSD|31840077
CONCLUSION:
While some successes have been achieved by government, the fulfilling of some of the objectives
are compromised by factors like lack of accountability, corruption, budgeting, nepotism and
incompetence
...
Accountability
•
•
•
•
•
•
•
•
•
It is required to give an explanation of one's decisions, actions and expenditures
over a period of time
There are mechanisms for evaluating government's economic and financial
performance
That the desired quantities and quality of goods and services for which taxes are
raised are delivered
That monopolies, corruption, nepotism, incompetence and apathy does not occur
Two important elements of accountability is participation and transparency
Ministerial responsibilities, i
...
the ministers of government departments are
responsible for decisions and actions and expenditures
Parliamentary questioning arises and members of the government departments
have to respond
The national treasury is responsible for treasury control
The auditor-general reports annually in writing on each government department
2
...
/insensitivity to the needs of
their clients
Incompetence- the lack of skill or ability to do a task successfully/May
have improper qualifications/or an attitude of apathy
Corruption- the exploitation of a person's position for private gain /taking
bribes, committing fraud, nepotism
•
•
•
Page 12 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
The problem of assessing needs
•
State-owned enterprises do not operate according to the forces of supply and
demand
It becomes thus very difficult for state-owned enterprises to assess needs and they
are thus prone to under- or over-supplying public goods and services
The census and other household surveys as well as local government structures
provide this type of information
Since resources are scarce, government must then decide which needs and whose
needs are to be satisfied
In the private sector houses are built according to the price that people are able
and willing to pay
In the public sector housing is regarded as a social responsibility and authorities
supply them according to the needs of people
•
•
•
•
•
4
...
g
...
g
...
g
...
g
...
g
...
g
...
Parastatals
•
State-owned enterprises that either render a service or when an existing enterprise is
nationalised
They focus on making a profit and maximizing cost at the expense of the needs of some
groups (e
...
) Iscor SABC, SAA, Spoornet
•
6
...
com)
lOMoARcPSD|31840077
•
cost of maintaining and managing state-owned enterprises are high which can lead to higher
taxes and larger public debt
•
State-owned enterprises are not run as efficiently as private enterprises
•
Nationalisation is the process whereby the state takes control and ownership of privately
owned assets and private enterprises
•
It includes contracting of services, public-private partnerships, increasing competitiveness
[Max 26]
ADDITIONAL PART
•
•
•
•
•
Possible problems in your community or elsewhere
Lack of drinking water due to burst pipes
Lack of electricity due to lack of infrastructure (load shedding)
Lack of schooling – no buildings available – lack of maintenance
Lack of health services due to lack of staff, infrastructure, strikes
Lack of adequate housing (RDP)
[Max 10 marks - List of examples max 5 marks]
[Accept any other relevant answer]
CONCLUSION
If the above problems are not dealt with timeously by government, government will continue to fail
its people in terms of service delivery, seeing many protests occurring regularly
[Any other relevant higher order conclusion]
[Max 2]
Discuss in detail the reasons for international trade (Foreign Exchange Markets)
INTRODUCTION
International trade can be defined as the exchange of goods and services between countries
globally
...
BODY-MAIN PART
The main reasons for international trade
...
• If there is an increase in population growth, it causes an increase in demand, as more people’s
needs must be satisfied
...
The population’s income levels effect demand
...
• An increase in the per capita income of people in more disposable income that can be spent on
local goods and services, some of which may then have to be imported
...
com)
lOMoARcPSD|31840077
An increase in the wealth of the population leads to greater demand for goods
...
Preferences and tastes can play a part in the determining of prices,
• E
...
customers in Australia have a preference for a specific product which they do not produce
and need to import and it will have a higher value than in other countries
...
g
...
Supply reasons
Natural resources are not evenly distributed
•
•
Across all countries of the world
...
Climatic conditions
•
Make it possible for some countries to produce certain goods at a lower price than other
countries, e
...
Brazil is the biggest producer of coffee
...
Some countries have highly skilled, well-paid workers with high productivity levels, e
...
Switzerland
...
g
...
Specialisation in the production
•
Certain goods and services allows some countries to produce them at a lower cost than others,
e
...
Japan produces electronic goods and sells these at a lower price
...
Due to a lack of capital, some countries cannot produce all the goods they require
themselves
...
com)
lOMoARcPSD|31840077
ADDITIONAL PART
•
•
•
•
Buying and selling goods and services from other countries:
The purchase of goods and services from abroad that leads to an outflow of currency from SAImports (M)
...
Comparative Advantage:
•
Where one country can produce goods at a lower opportunity cost it sacrifices less resources in
production
...
[Any other relevant higher order conclusion]
[Max 2]
ECONOMIC PURSUITS-PAPER 1
Discuss in detail export promotion (Protectionism and Free Trade)
INTRODUCTION
Export promotion refers to measures taken by governments increase production of goods and
services that can be exported
...
The first step to export-led economic growth is to implement policies that encourage
the establishment of industries to produce goods and services for export markets
METHODS:
Exports are promoted through:
Incentives
• Export incentives include information on export markets, research
with regard to new markets, concessions on transport charges, export credit and export credit
guarantees and publicity commending successful exporters
• This will encourage manufacturers to export an increased volume of their production
Page 16 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
• Include cash payments to exporters, refunds on import tariffs and employment subsidies
...
g
...
g
...
g
...
ADVANTAGES
•
•
•
•
•
•
•
•
No limitations on size and scale since world market is very large
Cost and efficiency of production based on this and organised along lines of
comparative advantage
Increased domestic production will expand exports to permit more imports and
may result in backward linkage effects that stimulate domestic production in
related industries
Exchange rates are realistic and there is no need for exchange control and
quantitative restrictions
Value can be added to natural resources of the country
Creates employment opportunities
Increase in exports has positive effect on balance of payments
Increase in production leads to lower domestic prices, which benefit local consumers
Page 17 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
Incentives often lead to inefficiencies in the production process, since companies
don't have to do their best to compete
Can be seen as dumping
[Max 26]
BODY: ADDITIONAL PART
How successful is South Africa in protecting the local textile industry against foreign
competition?
• Not successful:
Many domestic textile manufacturers closed down due to unfair international
competition
Many wholesalers make use of suppliers from abroad e
...
Woolworths/Walmart
• Dumping still occurs – European manufacturers still dump clothing in Africa out of
season at prices below cost
Job losses due to a lack of protection in this industry
[Accept any motivation relating to success indicators]
[Max 10]
CONCLUSION
South Africa's international trade policy facilitates globalisation thereby impacting positively on the
balance of payment
...
[Accept any other relevant definition]
[Max 2]
Page 18 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
• In smaller countries the tax base is often small due to low incomes of individuals and
businesses
...
Protecting the whole industrial base
• Maintaining domestic employment
...
• It is thought that using protectionism the country’s citizens would purchase more domestic
products and raise domestic employment
...
• Applying import policies is likely to reduce other countries ability to buy country’s exports and
may provoke retaliation
...
• Local industries would therefore be unable to compete because of higher wages pushing
up the price levels of goods
...
• Competition from low-wage countries may also reflect the fact that those countries have a
comparative advantage in low-skilled labour-intensive industries
...
• A country relying too heavily on the export of one or a few products is very vulnerable
...
• Import restrictions may be imposed on a range of products in order to ensure that a number of
domestic industries develop
...
• Developing countries may feel that they need to develop these industries in order to become
self-sufficient
...
com)
lOMoARcPSD|31840077
Protecting specific industries
Dumping
• Foreign industries may engage in dumping because government subsidies permit them to sell at
very low prices or because they are seeking to raise profits through price discrimination
...
Infant industries
• Usually newly established and find it difficult to survive due to their average costs being higher
than that of their well-established foreign competitors
...
Declining industries/sunset industries
• Structural changes in the demand and supply of a good may severely hit an industry such
industries should be permitted to go out of business gradually declining industries
• Are likely to be industries that no longer have a comparative advantage and however, if they go
out of business quickly there may be a sudden and large increase in unemployment
...
• Protecting domestic standards domestic regulations of food safety human rights and
environmental standards have been increasingly acting as trade restrictions
...
Government expenditure can provide direct financial support to domestic
producers for their exports e
...
•
Cash grants offered to South African exhibitors to exhibit their products at exhibitions
overseas
...
•
Foreign trade missions to explore new markets imposition of tariffs on imports
...
•
Subsidies for training or employing personnel
...
•
Product registration and foreign patent registrations
...
com)
lOMoARcPSD|31840077
Indirect subsidies
• Government can refund companies certain taxes to promote exports
...
• Refunds on import tariffs in the manufacturing process of exported goods companies
often use custom duties are paid on these goods and the government refunds them
...
Protectionism is needed especially where industries are young and need expansion or
development
...
Whereas economic development would focus on the individual
well being of the citizens of a country
...
Monetary policy
•
•
Is driven by the South African Reserve Bank (SARB)
...
Page 21 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
It aims to facilitate government, political and economic objectives
...
It is dependent on all components of aggregate demand, that is, C, I, X and G
...
Monetary policy
• The South African Reserve Bank (SARB) as the central bank in South Africa formulates the
monetary policy
...
• The exchange rate is stabilised by encouraging inflow or outflows
...
When banks buy these securities money flows from
banks to the SARB
...
• To encourage credit creation the SARB buys securities
...
Moral suasion
• The SARB consults with banks to act in a responsible manner based on the prevailing economic
conditions
...
• Banks have a limited amount to give out as credit
...
• The main purpose of fiscal policy is to stimulate macroeconomic growth and employment, and
ensure redistribution of wealth
...
These taxes are used to finance social development
...
Page 22 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
Transfer duties are paid when properties are bought
...
Capital gains tax is levied on gains on the sale of capital goods (e
...
properties, shares)
...
These taxes are used to finance development expenditures which benefit the poor more
often
...
These are also known as social security payments
...
When user fees are charged, poor or low income earners pay less or nothing
...
Other redistribution
•
Public works programmes, e
...
the Strategic Integrated Projects (SIP) provides employment
subsidies and other cash and financial benefits such as training, financing and export incentives
...
Land redistribution focuses on land for residential (town) and production (farm) for previously
disadvantaged groups
...
Subsidies on properties
•
•
•
It helps people to acquire ownership of fixed residential properties
...
g
...
OR
To ensure economic growth, there should be an adequate and growing demand for goods and
services produced in the economy
...
com)
lOMoARcPSD|31840077
Discuss in detail the following South African growth and development policies and strategic
initiatives (Growth and development)
INTRODUCTION
Different growth and development strategies have been implemented in South Africa since 1994,
each aimed at addressing particular needs at the time of introduction
...
• It seeked to mobilise all our people and our country’s resources toward the final eradication of
apartheid and the building of a democratic, non-racial and non-sexist future
...
1
...
2
...
3
...
4
...
5
...
6
...
•
•
The RDP consisted of many proposals, strategies and policy programmes
...
The five key programmes were:
1
...
2
...
3
...
4
...
5
...
The Growth, Employment and Redistribution Programme (GEAR)
• The GEAR built upon the strategic vision set out in the RDP, i
...
• The importance of all the objectives of the RDP was reaffirmed but it recognized the
implementation and macroeconomic problems that the government had been experiencing in
implementing the RDP
...
• While still recognizing that there were very serious needs that had to be addressed
...
Page 24 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
• The Joint Initiative on Priority Skills Acquisition (Jipsa) was established to address the
scarce and critical skills needed to meet AsgiSA’s objectives
...
the relative volatility of the currency
...
the cost, efficiency and capacity of the national logistics system
...
shortages of suitably skilled labour, and the spatial distortions of apartheid affecting
low-skilled labour costs
...
barriers to entry, limits to competition and limited new investment opportunities
...
the regulatory environment and the burden on small and medium enterprises (SME’s)
...
deficiencies in state organisation, capacity and leadership
...
But rather a national initiative supported by all the key groups in the economy
...
Joint Initiative on Priority Skills Acquisitions (JIPSA)
• It is the skills development arm of ASGISA
...
Expanded Public Works Programme (EPWP)
• It is a nationwide government intervention to create employment using labour-intensive methods,
and to give people skills they can use to find jobs when their work in the EPWP is done
...
• This plan is designed to serve as a framework for economic policy, and to be the driver
of the country’s job strategy
...
• Increasing incomes and undertaking other measures to equity and income distribution
...
• On a macroeconomic level the NGP entails accommodating or looser monetary policy
combined with stricter fiscal policy to limit inflationary pressures and enhance
competitiveness
...
Page 25 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
• A review of administered prices to ensure that they do not increase above inflation without
compelling reasons
...
• The microeconomic package involves ten programmes to control inflationary pressures and
inefficiencies combined with more proactive strategies to support an inclusive economy:
Active industrial policy
...
Competition policy
...
Enterprise development: promoting small business and entrepreneurship; eliminating
unnecessary red tape
...
Broad-based Black Economic Empowerment (BBBEE)
...
Labour practices
...
Technology policy
...
Developmental trade policies
...
Policies for African development
...
2
...
4
...
CONCLUSION
• The different growth and development strategies that have been implemented in South Africa
since 1994
...
• However, problems such as a low level of education, unemployment and unequal distribution of
income persist
...
[Any other relevant higher order conclusion]
[Max 2]
Discuss in detail South Africa's initiaties (endeavours) in regional development (Industrial
Development Policies)
INTRODUCTION
South Africa’s overall objective of Industrial Development Policy is to ensure international
competitiveness in its nine provinces
...
OR
Regional development attempts to limit the negative effects of economic activities in only a few
areas
...
com)
lOMoARcPSD|31840077
It attempts to promote the advantages of a more even regional development by using labour and
other natural resources and infrastructure in neglected areas
...
• Department of Trade and Industry is driving force behind industrial and spatial development
...
• Industrial Development Policy Programme (Spatial Development) has 2 focus points spatial
development initiative (SDI) and financial incentives
...
Key Objectives:
• Stimulate economic activity in selected strategic locations
...
• Develop projects of infrastructure in certain areas and finance them through lending and private
sector investment
...
In areas with high poverty and unemployment, SDI focuses on:
• High level support in areas where socio-economic conditions require concentrated government
assistance
...
• The approach is towards international competitiveness, regional cooperation and a more
diversified ownership base
...
It also makes it possible for private sector businesses to take advantage of the economic
potential of underdeveloped areas in private-public partnerships (PPP’s)
In PPP a private business may provide the capital to build the factory and to buy raw materials
and employ labour, while the government provides the capital for the infrastructure such as
roads and water and electricity
...
Page 27 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
User-fees:
• Private sector constructs the project and then is given the right to change a toll fee (e
...
public
road);
• The toll covers costs of construction, maintenance, operation
...
g
...
Corridors
• A track of land that forms a passageway allowing access from one area to another and particular
advantages to mining, manufacturing and other businesses
...
g
...
• Corridors beyond the South African Borders (SADC) e
...
Maputo Development Corridor
Mozambique
...
• A robust regional transport system and a solid infrastructure base hold the key to attracting
investment into the SADC region – improving competitiveness and promoting trade
...
• Corridor developments will often occur due to private investment
...
• Efficient urbanisation leads to efficient use of land and promotion of an efficient transport
system
...
• Physically enclosed and linked to an international port or airport
...
• Falls outside domestic customs zones and able to import items free of customs and trade
restrictions, add value and then export their goods
...
• Government IDZ policy designed to boost exports and jobs
...
com)
lOMoARcPSD|31840077
•
IDZ’s aim to encourage economic growth –attract foreign investment in industrial development –
facilitate international competitiveness regarding manufacturing
...
• E
...
manufacturing, agricultural, processing, aquaculture and tourism
...
• E
...
for installation, construction of infrastructure, payment of employees, materials directly
consumed during installation
...
Foreign Investment Grant (FIG)
• This has assisted foreign investors to invest in new manufacturing businesses in SA
...
Strategic Investment Projects (SIP)
• This has attracted investment from local and foreign entrepreneurs in manufacturing, computer,
research and engineering sectors
...
Black Businesses Supplier Development Programme (BBSDP)
• This 80 % cash grant has provided black-owned enterprises with access to
• Training which has improved management of their enterprises
...
• The major incentive is a tax reduction of 15 % for businesses settling in this area
...
• If a current business in the IDZ wants to expand they are allowed
...
com)
lOMoARcPSD|31840077
CONCLUSION
From the above discussion it is clear that different initiatives form part of South Africa’s Regional
Industrial Development Programme
...
This unit
can be a company, an industry, a country or a region
...
BODY-MAIN PART
Such indicators can provide an indication of:
• Changes taking place in a country
...
Inflation Rate
• This is the general increase in the price level of goods and services in the economy over a
certain period in time
...
g
...
• This is therefore an indicator of the health of the economy and it is monitored in two ways that is
at the production wholesale level producer price level (PPI) and at the retail or consumer level
consumer price index (CPI)
The Consumer Price Index (CPI)
• Shows the price increases of a representative (weighted) basket of goods and services that
consumers buy
...
• It is an overall index and weights are obtained from expenditures of different income categories
of households
...
• It shows changes in the general purchasing power of the rand and it is used for inflation
targeting
• Is compiled by Stats SA and measures the change in the price level of a basket of consumer
goods and services
...
• This basket is adjusted from time to time as consumption patterns change
...
com)
lOMoARcPSD|31840077
The Production Price Index (PPI)
• Used to measure the price of goods that are produced domestically when they leave the factory
year
...
• PPI consists of three baskets that are domestically manufactured outputs, e
...
changes in the
PPI can be made monthly or quarterly or yearly
...
• PPI includes capital and intermediate goods but not services
...
• It measures the cost of production rather than the cost of living
...
e
...
• Manufactured goods included in the PPI are priced when they leave the factory, not when they
are sold to consumers
...
• The PPI is nevertheless very useful in the analysis of inflation because it measures the cost of
production
...
The GDP Deflator
Is a ratio that indicates the relationship of the GDP at nominal prices to the GDP at real prices
...
• While the real GDP is the value of total gross domestic product measured at constant prices
...
In a small open economy, like that of South Africa where both, imports and exports are
significant in relation to the total size of the economy
...
Unemployment rate
• In terms of economic development, employment is a very important indicator
...
• The concept of underemployment is also important
...
Page 31 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
Someone may also be employed on a part-time basis but would prefer to work full time
...
This publication contains information and statistics concerning a variety of issues related to the
labour market, including the official unemployment rate
...
Employment in the informal sector, and even reasons for changes in employment figures
...
The total labour force includes all employed people and unemployed people who are looking for
work
...
For example if the economy starts growing at a faster pace
...
Interest rates
• Interest rates are important indicators of future economic activity, as the interest rate level is
usually an important determinant when economic decisions are being taken
...
•
•
•
•
•
•
•
•
•
•
•
There are many interest rates in the economy
...
The difference between the short term interest rates and long term interest rates:
Is called the interest rate spread and the term structure of interest rates provides an indication of
the interest rates levels on loans or investments of different maturities
...
This is due to the higher risk attached to the developing economy
...
Developing economies also need to attract foreign investment to their country
to finance growth
...
Developing countries cannot allow interest rates in their countries to become too low
...
• If M, the money supply increases, this means that either (P) prices or Y (output) has
to respond to the increase in M
...
• Whether this will translate to an increase in real production or the price level will depend on
factors like production within the economy
...
com)
lOMoARcPSD|31840077
Employment
• In addition to economic growth the employment of people of working age (15 -64 years)
is a majot economic objective
...
• The numbers are determined, not only by age, but also by people’s willingness to work
...
• It consists of people between the age of 15 and 64 who are willing to work for income in cash or
in kind and includes:
• Workers in the formal sector- workers in the informal sector
...
Unemployed Persons
• The 2021 estimate of the South African population was _______million people
...
The Employment Rate
• The number of employed persons expressed as a percentage of the EAP gives the employment
rate
...
• The SA employment rate was _____% in 2011
...
• In SA the growth in the economy is not accompanied by the similar growth in employment
numbers
...
• This indicates structural changes in the economy
...
• To show the success of the economy in utilizing its full potential
...
• It uses the standard definition of the International Labour Office (ILO) to calculate
unemployment
...
• The unemployment rate those people within the economically active population who:
• Did not work during the seven days prior to the interview
...
Page 33 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
In SA the official unemployment rate was ____% in 2021
...
From governments to fine-tune the economy
...
In developing countries, unemployment is the most important cause of poverty
...
• To develop mechanism to caution the most affected sectors of the economy promptly
• e
...
during the 2019-2020 recession/pandemic some companies required a bail out from the
government
...
• Open some other alternative markets for their goods and services
...
• It can be used to stimulate thinking and growth in a number of sectors in the Economy
...
[Accept any relevant consideration]
[Max 2]
Discuss in detail the following social indicators (Economic and Social Performance
Indicators)
INTRODUCTION
Social indicators also called human development indicators as they promote improvement in the
standard of living
...
To get this a census is done regularly to obtain this information
...
com)
lOMoARcPSD|31840077
Human development Index (HDI)
•
•
This is a measure of people’s ability to live long and healthy lives, to communicate,
To participate in the community and to have sufficient income to experience a
decent lifestyle
...
Lack of education is measured by the percentage of adults who are ill- educated
...
Infant mortality rate
...
The number of children who go hungry
...
Education
•
•
The standard of living of people is directly connected to their education
...
Two important measures are:
•
•
•
Secondary enrolment percemtage-how many children that start Grade 1 get to Grade 8 and
finish Grade 12
...
A large percentage of the annual budget is allocated to education
...
These services have a direct effect on people’s living standards
...
a)
b)
c)
d)
Electricity
Refuse disposal
Water supply
Sanitation
Page 35 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
This measures is important as more people come to live in urban areas the greater the demand
for housing, services, education, health care etc
...
The government issue housing subsidies to help poor people to own a house South African
citizens or permanent residents earning R3 500 or less a month could apply for this subsidy
...
Other measures used:
•
•
Purchasing power parity (PPP) The number of units of one country’s currency that give the
holder the same purchasing power as one unit of another country’s currency
...
[Max 40]
CONCLUSION
From the above discussion it is clear that social indicators play a significant role in South
Africa
...
[Max 2]
MICROECONOMICS-PAPER 2
Discuss in detail the various equilibrium positions with the aid of graphs-PERFECT MARKET
(Perfect Market)
INTRODUCTION
A perfect market is a market structure which has a large number of buyers and sellers
...
✓✓
OR
This means that individual businesses are price takers, i
...
they are not able to influence prices
...
com)
lOMoARcPSD|31840077
OR
Perfect competition is an imaginary situation, whereas monopolistic competition is a reality
...
✓✓
Where the dotted lines intersect the AC and AR curves either normal profit or economic profit or
economic loss will be indicated and shadowed
...
Max of 8 marks
...
e
...
com)
lOMoARcPSD|31840077
NORMAL PROFIT
Mark allocation for graph:
• Position / shape pf MC curve = 1 mark
• MR curve = 1 mark
• Position / shape of AC curve = 2 marks
• Equilibrium point = 2 marks
• Indication of price / quantity = 1 mark
• Suitable heading = 1 mark
MAX MARKS = (8)
Allocate marks on the graph according to the rubric provided and if facts are duplicated again in
writing, do not allocate marks
...
• Equilibrium is at E1 i
...
where MC = MR ✓✓
•
At this point Q1 goods are produced at a price of P1 ✓✓
•
At equilibrium (point E1) average cost is equal to price ✓✓
•
•
The AC curve is tangent to the demand curve which means that P/AR = AC (TR = TC) ✓✓
The business makes normal profit which is the minimum earnings required to prevent the
entrepreneur from leaving the industry
...
com)
lOMoARcPSD|31840077
Mark allocation for graph:
• Position / shape of MC curve = 1 mark
• MR curve = 1 mark
• Position / shape of AC curve = 2 marks
• Equilibrium point = 1 mark
• Indication of price / quantity = 1 mark
• Shading of economic loss = 2 marks
MAX MARKS = (8)
Allocate marks on the graph according to the rubric provided and if facts are duplicated again in
writing, do not allocate marks
...
• Equilibrium is at E1, i
...
where MC = MR ✓✓
• At this point Q1 goods are produced at a price of P1 ✓✓
• At equilibrium (point E1) price/AR is less than average cost/the AC curve is lies above the
demand curve which means that P/AR < AC (TR < TC) ✓✓
• The business makes an economic loss ✓✓
A maximum of 24 marks will be allocated for graph illustration and analysis:
8 marks max per graph illustration - (Max 26 marks)
ADDITIONAL PART
CONDITIONS
For a market to successfully operate under perfect competition, the following conditions should
prevail at the same time:
• No firm can influence the market price (price takers) due to a large number of buyers and
sellers ✓✓
• Products are identical (homogeneous) ✓✓
• There are no barriers of entry, meaning that there is freedom of entry and exit ✓✓
• Buyers and sellers act independently - no collusion between sellers ✓✓
• No government interference to influence the market – the market is unregulated ✓✓
• Free movement between markets - all factors of production are completely mobile ✓✓
• Both buyers and sellers have full knowledge of all the prevailing market conditions (perfect
information) ✓✓
• If any of the above conditions are not met, the market is regarded as an imperfect market ✓✓
Any 5 x 2 = [Max 10 marks]
CONCLUSION
Freedom of entry and exit into the perfect market alter the supply of goods on the market
...
✓✓ If price falls to a
level where it is equal to the AVC then the firm will shut-down
...
com)
lOMoARcPSD|31840077
Discuss the monopoly in detail (with/without the aid of graphs) (Imperfect Market)
INTRODUCTION
A firm is regarded as a monopolist when it owns or controls the total supply of a scarce factor of
production
...
BODY: MAIN PART
The characteristics of a monopoly
Number of firms
•
•
•
The monopoly consists out of one single firm
...
Example: Eskom or De Beers – diamond-selling
[Accept any other relevant example]
Nature of product
•
•
The product is unique with no close substitute
...
Market entry
•
•
•
Refers to how easy or difficult it is for businesses to enter or to leave the market
Is entirely/completely blocked
...
If a monopolist wants to charge a higher price, it has to sell fewer units of goods
...
A monopolist is confronted with a normal market demand curve
The demand curve slopes downwards from left to right
Any point on the monopolist’s demand curve (D) is an indication of the quantity of the product
that can be sold and the price at which it will trade
...
The monopolist’s product has to compete for the consumer’s favour and money with all other
products available in the economy
...
com)
lOMoARcPSD|31840077
They face substitutes
•
•
There are few products that have no close substitutes
...
They may enjoy favourable circumstances
•
•
Sometimes an entrepreneur may enjoy favourable circumstances in a certain
geographical area
...
They may exploit consumers
•
•
Because a monopolist is the only supplier of a product, there is always the possibility of
consumer exploitation
...
Market Information
•
•
All information on market conditions is available to both buyers and sellers
...
Control over price
•
In the case of a monopoly there are considerable price control, but limited by market demand
and the goal of profit maximisation
...
com)
lOMoARcPSD|31840077
Heading = 1 Mark
AC = 1 Mark
DD/AR =1 Mark
MC = 1 Mark
Profit maximisation point = 1 Mark
Labelling of the axis = 1 Mark
Labelling on the axis = 1 Mark
Long run equilibrium of a perfect competitor
Heading = 1 Mark
AC =
1 Mark
DD/AR =1 Mark
MC = 1 Mark
Profit maximisation point = 1 Mark
Labelling of the axis = 1 Mark
Labelling on the axis = 1 Mark
MAX = 5 marks
CONCLUSION
A monopoly does not always make economic profit in the short run; it can also make economic loss
in the short run if the total cost exceeds total revenue
...
[Accept any other relevant and correct response]
Page 42 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
If the product is differentiated, it is known as a differentiated oligopoly
...
Market entry
Market entry is not easy, it is limited in the sense that huge capital outlay might be
necessary
...
Oligopolies can frequently change their prices in order to increase their market share and
this result in price wars
...
Mutual dependence (interdependence) exists amongst these businesses
...
Non-price competition
Non - price competition can be through advertising, packaging, after-sales services
...
Participants observe one another carefully- when one oligopolist launches an advertising
campaign, its competitors soon follow suite
...
Collusion
•
•
Collusion is a strategy used by firms to eliminate competition amongst each other
...
Limited competition
• There are only a few suppliers manufacturing the same product
...
Abnormal profits may result to joint decision-making in an oligopoly
...
It is known as the kinked demand since it contains the upper relatively elastic slope and
the lower relatively inelastic slope
...
26]
Page 43 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
aggressive advertising which inform customers about the business or product it provides
...
improving their customer service in order to ensure that they return to their businesses
...
•
extending shopping hours to the convenience of customers
...
[Accept any other relevant response]
[Max
...
[Accept any other relevant response]
Compare and contrast any TWO types of market structures (perfect to imperfect/imperfect to
imperfect) in detail in terms of the following
...
NB: Learners should write in full sentences even if the comparison is done in a tabular
format)
...
The seller is the
price maker
...
com)
lOMoARcPSD|31840077
Entry
Completely
free/easy to
enter
There are no
barriers to enter
Free
There are no
barriers to enter
Varies from free
to restricted
Information
Complete
Incomplete
Incomplete
Collusion
Impossible
Impossible
Possible
Some
Considerable,
but less that in
monopoly
Considerable,
but limited by
goal of profit
maximisation
Demand curve
for the firm’s
product
None
Prices are
determined by
demand and
supply
Horizontal
(perfectly
elastic)
Downwardsloping
Downwardsloping, may be
kinked
Long run
economic profit
Zero/normal
profit
Zero/normal
profit
Can be
positive/econom
ic profit
Equals market
demand curve:
downwardsloping
Can be
positive/economi
c profit
Firm’s control
over the price
of the product
Completely
blocked by legal
restrictions and
cost advantages
e
...
natural and
artificial
monopolies
Complete/
Incomplete
Unnecessary
PLEASE NOTE: THE ABOVE TABLE SHOULD BE VERBALLY WRITTEN AS PER ESSAY
INSTRUCTION
Discuss in detail how the following factors lead to the misallocation of resources in the
market (Market Failures)
INTRODUCTION
Market failure is when the forces of supply and demand fail to allocate resources efficiently / when
markets fail to allocate goods and services efficiently
...
Missing Markets
•
Markets are often incomplete in the sense that they cannot meet the demand for
certain goods
...
Page 45 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
g
...
Non-excludability:
• Consumption cannot be confined to those who have paid, so there are free
riders e
...
radio and TV in South Africa
...
g
...
These goods are highly desirable for general welfare but not highly rated by the market,
therefore provide inadequate output/supply
...
The reason for undersupply of merit goods is that the market only takes the private
costs and benefits into account and not the social costs and benefits
...
g
...
Demerit goods lead to a lot of social costs, therefore, the government charges
sin tax / excise duties to discourage the consumption of such goods
...
Some consumers may be unaware of the true cost of consuming them
...
Producers and consumers make production and consumption
decisions based on the information they have
...
Producers might not know all the different technologies and production techniques that are
available and the different resources that can best be used to produce goods/services more
efficiently
...
3
...
com)
lOMoARcPSD|31840077
•
•
•
•
Labour takes time to move to into new occupations and geographically to meet the changes in
consumer demand
...
g
...
Technological applications change production methods e
...
use of robots rather than physical
labour
...
With greater technological change there is an increasing need for workers to become flexible,
to update skills, change employment, occupations and work patterns
...
Pressure was put on the South African government to introduce labour laws which require
employers to pay minimum wages
...
The main objectives were:
•
•
•
To redress inequality (Gap between wealthy and poor)
To improve the standard of living
...
[Max 10]
[Accept any other correct relevant response]
CONCLUSION
Governments intervene in the market when market forces cannot achieve the desired output
...
[Accept any other relevant introduction]
[Max 2]
BODY: MAIN PART
Page 47 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
10 marks]
Page 48 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
Items such as cigarettes, alcohol and non-prescription drugs are examples of demerit or
undesirable goods
...
Some consumers may be unaware of the true cost of consuming them, their negative
externalities
...
Taxation on these products will increase the market price and hopefully the demand for these
products will drop
...
com)
lOMoARcPSD|31840077
CONCLUSION
The intervention of government ensures that inefficiencies is eliminated and that the market is
operating effectively
[Accept any other relevant conclusion]
[Max 2]
CONTEMPORARY ECONOMIC ISSUES-PAPER2
Discuss in detail the consequences of inflation (Inflation)
INTRODUCTION
• This is a constant and significant increase in the general price level of goods and services in the
country over a certain period of time, e
...
a year
...
• This is because borrowers receive money with a relatively high purchasing power and they
repay their loans with money with low purchasing power, unless interest rates are sufficient to
prevent this occurrence
...
• This group includes retired people, pensioners and the poor
...
• However there are individuals and entrepreneurs whose incomes often increase at a rate that is
higher than the inflation rate and they do not suffer but gain from inflation
...
• The demand for increased skilled labour becomes a need as a result, this demand for labour
benefits the local labour market in increased employment opportunities and growth
...
• These assets have a fixed nominal value and give a return if they are held until maturity
...
Page 50 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
• Often the prices of these assets increase more rapidly than increases in the general price level
...
Tax Payers
• South Africa has a progressive personal income tax system
...
• The higher level an individual’s income, the greater the percentage of income he or she has to
pay tax
...
Taxes are levied on nominal income and not on real income
...
• Individuals will have to pay higher taxes even if they are actually no better off than before
...
• Bracket deep results from a combination of inflation and progressive income tax
...
Industrial Peace
• Wage bargaining is often accompanied by strikes and mass action
...
• In extreme situations in the presence of exceptionally high inflation together with a government
that is determined not to yield to wage increase demands (which can push inflation to even
higher levels), widespread civil unrest follows
...
• This uncertainty discourages savings and investments especially in the long term
...
Inflation affects the real money value and savings
• Because inflation reduces the real value of money, it affects the real value of money saved in
particular
...
Page 51 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
e
...
if a consumer receives 5 % interest on his/her savings account while the inflation rate is 8%,
then the real rate of interest on the consumer’s savings is -3%
...
• If a country’s rate of inflation is higher than that of its trading partners the prices of exported
goods increase while the prices of imported goods decrease
...
This has a negative effect on the country’s balance of payments (BOP)
...
The effects of inflation are uneven
...
• Inflation also tends to redistribute income from low-income groups to higher income groups
...
• Powerful groups such as trade unions large companies and the wealthy people, are able to
increase their share of national income at the expense of disadvantaged people such as
pensioners the unemployed and the welfare recipients
...
• People in lower-income brackets feel severe effects of increases in the price of essential items
such as bread, maize meal rental and transport costs
...
Inflation feeds on itself and causes further inflation
• This is called the inflation spiral
...
g
...
• This happens again and again pushing prices further every time
...
[Max 26]
Page 52 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
g
...
• Most of the administered prices are adjusted once a year which brings price stability
...
• Administered prices provide additional revenue to national treasury
...
[Accept any other relevant response]
[Max 10]
CONCLUSION
• If inflation is not controlled by the proper and effective instruments, it can have challenging
problems to the economy in general
...
• Accept any other relevant introduction
...
g
...
com)
lOMoARcPSD|31840077
• Exchange rate depreciation
•
A decrease in the value of the rand will result in an increase in prices of imports
• Profit margins
•
When firms increase profit margins, the prices that consumers pay also increase
•
Sometimes firms use their market power to push up prices
• Productivity
•
Less productive factors of production will lead to increased cost per unit
•
Strikes and stay-aways often reduce production output and can result in price increases
• Natural disasters
• Natural disasters such as drought, flood and global warming can impact on the cost of
production
• This is often the case in relation to food prices
• Interest rates
• An increase in interest rates results businesses paying more money for capital loaned
firms recover these costs by increasing the prices of their products
• Increase in taxation
• Increase in direct tax like company income tax may lead to businesses increasing
their prices to offset the extra burden
• Increase in indirect tax such as custom duty will lead to increase in costs of supplying
a particular product, therefore the price will increase
• Administered prices increase e
...
fuel prices
• Shoplifting and losses caused by employees are added to the prices of products
[Accept any other relevant fact
...
26]
DEMAND PULL INFLATION
Total spending on domestic goods and services in the economy consists of the spending by
households, firms, the government and the foreign sector
...
Page 54 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
If consumers save less & spend more
• b
...
• c
...
•
•
•
•
Investment [I] –
When business invest this increase demand for labour, cement, sand and bricks
...
Lower interest rates may result in an improvement in the sentiment and profit expectations of
businesses
...
•
If aggregate demand increases at a faster rate than aggregate supply, price increases will follow
...
• a
...
Consumption expenditure on education, health, and protection
...
Social expenditure on public work programme to create jobs and increase in social
allowances
...
When economy of trading country improve
...
When global economy expands
...
As new credit is extended the credit
multiplier kicks in and more credit is created
...
Social spending
• Governments sometimes feel they have to do something substantive about unemployment and
poverty
...
• Such expenditures invariably lead to inflation because they add to aggregate demand without
adding anything to aggregate supply
...
com)
lOMoARcPSD|31840077
Commodities demand
• The world’s demand for commodities expands and contracts like business cycles do
...
The income earned from these exports adds to aggregate demand and prices increase
...
10]
Page 56 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
• An opinion or valued judgement on the facts discussed
...
• A contradictory viewpoint with motivation
...
• E
...
Inflation can be a threat to the normal functioning of the economy; therefore, measures like
monetary and fiscal are vital to keep the phenomenon under control
...
Page 57 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
g
...
com)
lOMoARcPSD|31840077
•
•
Direct environmental stress caused by tourist activities, e
...
the destruction of vegetation and
dunes
Effects on population dynamics such as migration and increased urban densities
Investment
• An adequate physical, economic and basic services infrastructure is essential for tourist
destinations which means they invest in the following:
• Transport infrastructure, e
...
roads, airports
• Communication and infrastructure including telephone lines, electronic signal stations and radio,
TVs’
• Energy infrastructure such electricity and liquid fuel
• Basic service infrastructure such as clean water and sewerage systems
[Max
...
g
...
Where guides explain and demonstrate storytelling and indigenous knowledge practices
...
These actions will make tourists more aware of these attractions
Encourage tourists to experience different cultures and townships - experience life at home with
a household and eat at a shebeen or township restaurant
World Heritage Sites of South Africa can be promoted for their cultural significance e
...
the
Fossil Hominid Sites of Sterkfontein, Mapungubwe Cultural Landscape, Richtersveld Cultural
and Botanical Landscape, Vredefort Dome and Robben Island
Environmental World Heritage Sites of South Africa selected for their natural importance namely
the Cape Floral Region Protected Areas, Isimangaliso Wetlands Park as well as
uKhahlamba/Drakensberg Park which has been selected for its mixed significance
Arts and culture festivals e
...
the National Arts Festival, the Hermanus Festival, Awesome Africa
Music Festival and Macufe African Cultural Festival should more widely be advertised to
encourage tourists to attend
According to the World Health Organisation, a large majority of the African population make use
of traditional medicines for health, social-cultural and economic reasons and forms part of the
unique experience tourists experience when visiting local villages
In South Africa tourists are made more aware of the important role traditional medicine plays in
poverty reduction and employment creation
Relaxation of restrictive tourist visa laws to facilitate easier entry into South Africa
[Accept any other relevant answers]
[Max
...
com)
lOMoARcPSD|31840077
CONCLUSION
• South Africa attracted over ______million tourists in 2020 /For every 8
...
[Accept any other relevant higher order conclusion]
[Max
...
g
...
g
...
Locals share this infrastructure with tourists
Government often prioritises economic infrastructure such as ports and beaches
In addition to physical and basic infrastructure, social infrastructure is also important for the
growth of tourism
Most of the SDIs and development corridors also have tourism as an important focus PP
[Max 8]
Page 60 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
Many households are indirectly involved in tourism as employees e
...
in hotels, transport
sector
...
A large number of households acquire skills in the tourism industry
...
Encourages rural development because many tourist attractions are located in rural
areas PP
[Accept any other correct relevant response]
[Max
...
• focusing on a clear message that concentrates on the strength of the attraction/ uniqueness
of the destination
...
• describing the service offered in the best possible way to catch the interest of the likely tourist
PP E
...
the use of slogans
...
• helping the tourist to view the entire service as value for money – deliver a worldclass visitor
experience
• highlighting other places of interest in the vicinity of the attraction as part of a package
• focusing on proudly South African products/services / Sho’t Left campaign PP
• help disadvantaged South Africans to benefit from tourist attractions in the less
popular destinations PP
[Accept any other correct relevant response]
[Max
...
[Accept any correct relevant response]
[Max 2]
Page 61 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
BODY: MAIN PART
Public sector intervention
Because it is difficult to enforce measures to ensure sustainability the government has to
intervene
...
The government uses the income generated through these taxes to protect the environment
...
In 2003 the government has legislated the use of biodegradable plastic bags which consumers had
to pay for
The hope is that they will use fewer bags and ensure a litter free environment
...
Households already pay for the collection of rubbish
...
Industries might also pay for emitting gases that can be harmful to people and the environment
...
Waste can also be reduced by using new techniques or equipment such as solar energy
...
Granting property rights
Normally owners of properties tend to be more protective over their resources than users who are
only interested in the profits the resources offer
...
Property rights empowers owners to negotiate contracts with businesses who wish to exploit the
area’s resources
...
It then distribute pollution rights (marketable permits) to factories within that area
...
It means that marketable permits are licenses that polluters can buy or sell to meet the control
levels set by government
...
The public is gradually been made aware of this rising problem
...
com)
lOMoARcPSD|31840077
Plastic, bottles and cartons can be recycled or made biodegradable
...
Environmental Impact Assessment
In SA every projected construction, mining or similar development has to undergo an assessment
by qualified environmental professionals
...
The cost if built into the project
...
Quantity: e
...
set the limit to the amount of fish to catch, or limit the season catching certain
species of fish
...
g
...
Air quality in workplace is subject to minimum standards
...
g
...
Voluntary agreements
Agreements between government and businesses voluntarily to address negative environmental
impacts of industries
...
Most prefer negotiations so that they can tailor their specific needs and include it into their
planning
Agreements can be formal, which is legally binding contract or informal
...
The fines imposed on industries that dump waste are too lenient and they continue polluting the
environment
...
The recycling of waste materials are not widely encouraged and promoted and landfill sites are
overflowing
...
Poor service delivery also adds to the problem in certain areas
...
[Accept any other relevant conclusion]
[Max 2]
Page 63 of 66
Downloaded by Kobela Mothapo (kobelandlalo@gmail
...
The ever-increasing pressure on our environment originates from increasing population numbers
and excessive consumption
Our air, land, and water are under constant assault from the ever-growing ravages of man-made
pollution generated chiefly by industrialized societies
...
Conservation is a strategy aimed at achieving the sustainable use and management of natural
resources
...
Certain aspects of conservation need to be taken into account
...
Secondly, externalities are often present
...
Over utilization of resources causes a reduction in supply, increase in prices, contradiction of
demand and a search for substitutes
...
Conservation has to be concerned with limiting what is harvested in order to maintain a stable
stock at least at the minimum level
...
Preservation
•
•
•
•
•
•
•
Preservation involves any strategy undertaken to safeguard the environment, maintain its
current condition and keep it as habitable as possible for people and animals
...
that have special cultural or
environmental significance, are often targeted preservation
...
It may be possible to use cost-benefit analysis to calculate the social benefits of preservation of
the environment
...
Government could do any of the following:
Buy or expropriate – Environmental assets are simply closed for human use
...
com)
lOMoARcPSD|31840077
•
•
Subsidise-A subsidy would increase net benefits to the owner and raise the property’s present
value
...
[26 Max]
ADDITIONAL PART
Stockholm Conference (1972)
•
•
•
The Stockholm Conference was the first major large scale international meeting on the
environment convened with the support of the United Nations
...
The meeting directly impacted on the environmental policies of many countries
...
The conference helped to make countries around the world aware of the dangers of
unsustainable development
...
Rio + 5 (1997)
•
•
•
This conference noted that globalization made some countries poorer –
In particular African countries and the least developed countries showed a low level of
growth or even declined
...
Unfortunately, China was excluded from this agreement and the USA withdrew
...
The meeting focused on issues like poverty eradication, water and sanitation, energy, health
agriculture and biodiversity
...
Although the framework for this treaty was established it was not finalised
...
com)
lOMoARcPSD|31840077
CONCLUSION
•
The solution to our environmental problems will depend on our ability to make sound economic
decisions that take account of the natural environment and to change our individual behaviour
and attitudes
...
com)
Title: Economics essays
Description: Comprehensive collection of economics Essays (68 pages)
Description: Comprehensive collection of economics Essays (68 pages)