ECONOMIC AND MANAGEMENT SCIENCES
GRADE 9
ASSIGNMENT
TERM 1
Marks: 50
Time: 60 minutes
Instructions:
• Answer ALL the questions on the answer sheet provided.
• Answer only what is required.
• Write neatly and legibly
MEMORANDUM
THE ECONOMY
QUESTION 1 – CIRCULAR FLOW
Study the following circular flow before answering the questions that follow
(B)
Taxes
goods &
services
Public
Government Government
spending spending
Factor Government Factors of
Factors of (A)
market production production
goods &
services
Public
Taxes
Businesses
1.1 (A) – Goods and Services Market √√ (B) – Households √√ (4)
1.2 Each of the statements describe the flow of income in an economy. Indicate the relevant
participant.
1.2.1 Earns wages from another participant - Households√√
1.2.2 Sells goods and services to other participants - Businesses√√
1.2.3 Provide labour to government and businesses - Households√√
1.2.4 Pays personal tax to the government - Households√√
(4x2) (8)
1.3. Label the four images illustrating the factors of production: (4)
A = Capital ✓ B = Natural Resources ✓
C = Entrepreneurship ✓ D = Labour ✓
1.4. Briefly discuss who the “households” are. Give your own reasons, for your answer,
why they can be both consumers and producers. (2)
• Households consist of consumers. ✓
• They are responsible for consumption by spending on goods and services.
• Households provide labour which is a factor of production. ✓
• Any other relevant and correct answer.
1.5. Government provide public goods and services with the income they receive.
List 2 services provided by government. (2)
• Education✓
• Infrastructure ✓
• Health care
• Libraries
• Any other relevant and correct service.
1.6. If government were to increase household tax substantially, how would that impact
consumer spending? (2)
- Consumers will have less disposable income as they are paying more tax. As a result
they will have less money to spend and spending will decrease. ✓✓
- Any other relevant and logical correct explanation.
1.7. Explain why the circular flow is not an accurate reflection of economic reality. (2)
- It is a model of how money and goods and services flow. ✓ It is based on the assumption
that households spend all their income, they receive goods and services and don’t save
anything. It also assume that all goods and services that are produced by businesses are
purchased by households. ✓ This is not the case.
1.8. Closed. ✓ (1)
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QUESTION 2 – ECONOMIC SYSTEMS
2.1.1. On which imported commodity did Russia spend the most money on?
Crude oil
(2)
2.1.2. When different countries trade commodities and money with one another, we are
referring to: International trade / globalisation (2)
2.1.3. Complete the following table: (2x2) (4)
One advantage of the globalisation One disadvantage of globalisation
- Increased market size. √√ - Brain drain√√
- Free flow of capital. - Outflow of profit from developing
- Access to a wider variety of products. economies.
- Free movement of labour. - Exploitation of resources.
- Specialisation - Dumping
2.2. Compare the role of each economic system with regard to each characteristic
mentioned in the table below. (8)
Characteristic Planned Economy Mixed Economy
The government takes full control The government is responsible
Government Control of the economy√ for the environment in which
business exist. Laws exist to
ensure social needs motive are
protected. √
Profit motive is replaced with Profit motive drives businesses,
Profit motive social needs motive√ while social needs motive exist to
provide public goods and
services to benefit the citizens√
Government√ Government and private
Ownership of factors of ownership of factors of
production production. √
Prices controlled by the state. √ Demand and supply determines
Prices process with state intervention
and control at times. √
2.3. Indicate how resources, the 4 factors of production will be allocated in a market economy.
(4)
- Land : Private ownership of natural resources. √
- Labour : People free to work where they want. √
- Capital : Individuals control the flow. √
- Entrepreneur : Individuals free to start their own business. √
2.4. Are the following statements TRUE or FALSE? If it is FALSE, give the correct answer. (5)
2.5.1 Socialism is another word for a planned economy.
TRUE√
2.5.2 Economic problem of scarcity refers to the limited needs and unlimited resources.
FALSE√ – refers to unlimited needs and limited resources. √
2.5.3 Capital is controlled by individuals in a planned economy.
FALSE√ – Controlled by government√
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TOTAL MARKS: 50
