GRADE 12 ECONOMICS TEACHER NOTES - Mail & Guardian

SENIOR SECONDARY INTERVENTION PROGRAMME 2013

GRADE 12 ECONOMICS TEACHER NOTES

The SSIP is supported by

TABLE OF CONTENTS

TEACHER NOTES

SESSION 1 2

3

4 4

5 6 6

7 7

TOPIC Topic 1. Circular flow Topic 2. The multiplier

Topic 1. Business cycle composition and reasons Topic 2. Government policy and forcasting for business

cycles

Topic 1. Necessity of public sector and problems of public sector provisions

Topic 2. Fiscal policy, laffer curve and public sector failure

Topic 1. Perfect market cost and revenue curves Topic 2. Profit maximising in a perfect market

Self Study: Topic 1. Imperfect market - monopoly Topic 2. Imperfect market ? oligopoly

Topic 1. Market failure Topic 2. Cost benifit analysis

Topic 1. Economic growth and development Topic 2. North-south divide

Self Study: Topic 1. South Africa`s industrial development policies

Topic 2. Free trade and protectionism Topic 3. Import substitution and export promotion

Topic 1. Balance of payments Topic 2. Foreign exchange market

Self Study: Topic 1. Economic Indicators

Topic 2. Social Indicators

PAGE 3 ? 16 17 - 27

28 - 39 40 ? 49 50 ? 58 59 ? 67 68 ? 76

77 - 91 92 ? 104 105 ? 119

Page 2 of 119

GAUTENG DEPARTMENT OF EDUCATION

SENIOR SECONDARY INTERVENTION PROGRAMME

ECONOMICS

GRADE 12

SESSION 1

(TEACHER NOTES)

TOPIC 1: CIRCULAR FLOW TOPIC 2: THE MULTIPLIER

Teacher Note: Make sure you explain the circular flow model and how to use it to work out the value of the output produced by the economy at factor cost. Also remember that when Leakages = Injections the economy will be in equilibrium. Point out how changes in the injections cause a change in the equilibrium level of output.

LESSON OVERVIEW

1. Briefly introduce the cicular flow/multiplier: 2. Learners answer the questions:

10 minutes 45 minutes

3. Go through Solutions and Hints with the learners: 30 minutes

4. Preview Homework Questions

5 minutes

SECTION A: TYPICAL EXAM QUESTIONS: TOPIC 1: CIRCULAR FLOW

QUESTION 1:

12 minutes

(Taken from DoE Nov 2009)

1.1 Study the table below on the calculation of GDP and answer the questions that follow.

CALCULATION OF GDP ACCORDING TO THE INCOME METHOD (2007 figures) R bn.

Compensation of employees ........................... Net operating surplus .................................... Consumption of fixed capital ............................ Gross value added @ _________ A________ Taxes on production ..................................... Subsidies on production ................................. Gross value added @ basic prices ................. __C____ on products ................................... Subsidies on products .................................... Gross domestic product @ market prices ...... Primary income from rest of world .................... Primary income to rest of world ........................ GNI @ market prices ....................................

[Source: SARB Quarterly Bulletin, September 2008]

843 644 _ _255 1 742

35 _ _6

B 231 ________6 1 996

46 ______108

1 934

1.1.1. Differentiate between GDP and GNP.

(4)

(Define both GDP and GNP)

1.1.2 Which alternative term is used for GDP in the national accounts?

(2)

(Alternative name)

1.1.3 Provide labels for A and C.

(4)

1.1.4 Calculate the gross value added at basic prices (letter B).

(4)

1.1.5 Which component contributed most to the Gross Domestic Product?

(3)

(Use data in table)

Page 3 of 119

GAUTENG DEPARTMENT OF EDUCATION

SENIOR SECONDARY INTERVENTION PROGRAMME

ECONOMICS

GRADE 12

SESSION 1

(TEACHER NOTES)

1.1.6 Give a reason why the GNP figures in South Africa are generally lower

than the GDP figures.

(3)

[20]

QUESTION 2:

20 minutes

(Taken from DoE Nov 2008)

An open economy circular flow model illustrates the economic interaction between the

four participants.

Describe this interaction in detail with the aid of a diagram, which includes injections and

withdrawals.

[35]

(This question is only part of an essay question that counts 50)

QUESTION 3:

13 minutes

(Taken from DoE Nov 2010)

3.1 Explain leakages and injections.

(8))

(Remember always to give an example)

3.2 List THREE methods by which the gross domestic product can be calculated.

(3 x 2) (6)

3.3 Discuss the role of households (consumers) in the economic circular flow

model.

(4 x 2) (8)

[22]

QUESTION 4:

6 minutes

(Taken from DoE Nov 2010)

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

4.1.1 Explain the item subsidies on products.

(3)

4.1.2 Explain the item consumption of fixed capital.

(3)

4.1.3 Calculate the compensation of employees as a percentage of GDP at market

prices. Show ALL calculations.

(4)

[10]

Page 4 of 119

GAUTENG DEPARTMENT OF EDUCATION

ECONOMICS

GRADE 12

TOPIC 2: THE MULTIPLIER

SENIOR SECONDARY INTERVENTION PROGRAMME

SESSION 1

(TEACHER NOTES)

QUESTION 1:

12 minutes

(Taken from DoE Exemplar 2008)

1.1 Study the graph below that depicts a simplified two-sector economy (where E = C + I) and answer the questions that follow.

1.1.1 Name the TWO sectors involved in deriving the macro-economic multiplier.

(4)

(Name means to give only the terms and not discuss them.)

1.1.2 What is represented by the line E = Y?

(4)

1.1.3 Use the formula, k = Y/J, to calculate the multiplier (k) for the above scenario. (4) (Remember that Y = the change in Income, and that J = the change in Injections.)

1.1.4 Calculate the multiplier, using the formula, k = 1/(1 ? MPC), when the marginal

propensity to consume (MPC) = 0.8. Show calculations.

(6)

1.1.5 Explain the relationship between the MPC and the multiplier.

(2)

(Relationship is how they affect one another.)

[20]

Page 5 of 119

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