EMS
1 © Noted Summaries Grade 9 [EMS : Management / Economics]
www.notedsummaries.co.za
, ECONOMIC SYSTEMS
WHAT IS ECONOMICS? ECONOMIC PROBLEM
social science that examines how individuals, households, and firms satisfy SCARCITY PROBLEM
their unlimited needs and desires with limited and scarce resources >
environment in which consumers and producers seek to solve the to satisfy the unlimited wants and needs of society with the use of
economic problem limited resources
→ People only have a limited amount of money BUT many needs and
desires to satisfy
→ The government also has a limited amount of money and cannot
NEEDS WANTS satisfy all its desires
= goods and services ESSENTIAL for = human desires for goods and services
basic survival ECONOMIC SYSTEM [3 CENTRAL QUESTIONS]
Z fancy technology
Z Housing & Safety Z trendy clothes/attire 1. OUTPUT QUESTION
Z Food Z Treats (food and gifts)
Z Water → WHAT GOODS AND SERVICES WILL BE PRODUCED
AND IN WHAT QUANTITIES?
WHAT IS AN ECONOMIC
DEMAND SYSTEM/SYSTEM? 2. INPUT/INPUT QUESTION
= occurs when consumers are able and willing system used by the government of a
→ HOW will each of the goods and services be
to buy a product at a certain price country to solve the country's economic produced?
problem → HOW MANY of the scarce resources will be used in
= desires become real demand
determine : -PUBLIC AND PRIVATE BUSINESSES the production of each good
I want a Ford Figo but have demand for a -WHO OWNS OWN PROPERTY 3. DISTRIBUTION QUESTION
Kia Picanto - WHO’s IN CHARGE OF COUNTRY'S MARKETS??? = FOR WHOM will the goods and services be produced?
2 © Noted Summaries Grade 9 [EMS : Management / Economics] = WHO will receive the goods and services?
www.notedsummaries.co.za
, CENTRALLY PLANNED ECONOMY MARKET ECONOMY
BUSINESS→STATE OWNED GOVERNMENT → NOT ACTIVELY INVOLVED
STATE→ GET PROFIT & PROVIDE SERVICES GOVERNMENT → GOODS AND SERVICES
(GOVERNMENT CONTROLLED ECONOMY) (ECONOMIC DECISION IS MADE BY INDIVIDUALS)
Features of centrally planned economy: -an economic system in which economic decisions are made by private
individuals who own the factors of production
→ Government controls the factors of production (STATE)
Features of market economy:
→ Government decides what goods and services are produced
→ Private individuals own and control the factors of production
→ Government decides how these goods and services are produced
→ Entrepreneurs decide what to produce
→ Government decides who will be the consumers of these goods and
services → Entrepreneurs decide how the production will take place
→ Individuals decide what goods and services will be used.
ADVANTAGES DISADVANTAGES ADVANTAGES
→ Reduce inequality
→ government cannot process all → good way of allocating resources DISADVANTAGES
relevant information fast on an efficient way = giving private
→ EMPLOYMENT☞ STABLE enough to make economic → Economic inequality
persons a good motivation of
ECONOMY decisions profit motive and entrepreneurship → Self-interest
→ Economic equality → Absence of profit motive is encouraged
→ ENTREPRENEURSHIP IS → Exploitation
→ Resources are used for the → ENTREPRENEURS ARE ENCOURAGED AND REWARDED → public goods and services not
collective benefit of all DISCOURAGED → DETERMINE YOUR OWN STANDARD provided/scarcity provided
OF LIVING → BIG DIFFERENCE BETWEEN RICH
→ Economically vulnerable people → GOVERNMENT
→ LITTLE GOVERNMENT AND POOR PEOPLE (INCOME)
are protected CONTROLS EVERYTHING
INTERFERENCE
→ RESOURCES ARE NOT
→ INDIVIDUALS HAVE FREEDOM OF
SHARED EQUALLY CHOICE
3 © Noted Summaries Grade 9 [EMS : Management / Economics] www.notedsummaries.co.za
, MIXED ECONOMY [SOUTH AFRICA] GLOBALISATION
Trend towards greater economic integration and cooperation between
= mixture of private and state control over the economy different countries
Features of the mixed economy:
GLOBAL ECONOMY
→ Capital derived from banks, shares, and government [expended tax
revenue]
GLOBALISATION OF PRODUCTION MARKETS,
→ Entrepreneurs decide WHAT to produce
FINANCE, COMMUNICATIONS AND THE WORK
→ Government spends money on public services
→ Government implements legislation to control economic activity FORCES
[e.g., Affirmative action in SA]
(ECONOMY OF THE WORLD)
Features of global economy:
→ Free Trade in Goods and Services
ADVANTAGES DISADVANTAGES → Free movement of labour
→ Combination of state and → Limiting economic growth
→ Free movement of capital
private enterprises = good → Major GOVERNMENT involvement
economic growth in the economy [government
→ Government = promote bureaucratic and susceptible to
equilibrium growth of the
economy [income more equally
corruption]
ADVANTAGES DISADVANTAGES
than in market economy] FREE TRADE = EXPORTS AND IMPORTS ↑ WHICH CAUSES: → Unfair competition and more
→ Private businesses are urged to → Competition between producers ↑ + prices for consumers ↓. beneficial for developed countries
→ greater range of goods and services → Exploitation of workers due to
contribute to the welfare of
→ Expanding export markets for domestic manufacturers = being able to sell more goods +
citizens earning more revenue
investors paying low wages
→ Competition is promoted [+ THE FREE MOVEMENT OF LABOUR: → Outflow of skills due to skilled
protect citizens] → opportunity to increase income + standard of living ↑ > best jobs t labour leaving the country in
→ ↓ unemployment figure in underdeveloped areas + distribution of skills and knowledge search of high wages
between countries.
THE FREE MOVEMENT OF CAPITAL
→ Stimulate investment in poor countries
→ Lead to job creation and economic growth
4 © Noted Summaries Grade 9 [EMS : Management / Economics] www.notedsummaries.co.za
1 © Noted Summaries Grade 9 [EMS : Management / Economics]
www.notedsummaries.co.za
, ECONOMIC SYSTEMS
WHAT IS ECONOMICS? ECONOMIC PROBLEM
social science that examines how individuals, households, and firms satisfy SCARCITY PROBLEM
their unlimited needs and desires with limited and scarce resources >
environment in which consumers and producers seek to solve the to satisfy the unlimited wants and needs of society with the use of
economic problem limited resources
→ People only have a limited amount of money BUT many needs and
desires to satisfy
→ The government also has a limited amount of money and cannot
NEEDS WANTS satisfy all its desires
= goods and services ESSENTIAL for = human desires for goods and services
basic survival ECONOMIC SYSTEM [3 CENTRAL QUESTIONS]
Z fancy technology
Z Housing & Safety Z trendy clothes/attire 1. OUTPUT QUESTION
Z Food Z Treats (food and gifts)
Z Water → WHAT GOODS AND SERVICES WILL BE PRODUCED
AND IN WHAT QUANTITIES?
WHAT IS AN ECONOMIC
DEMAND SYSTEM/SYSTEM? 2. INPUT/INPUT QUESTION
= occurs when consumers are able and willing system used by the government of a
→ HOW will each of the goods and services be
to buy a product at a certain price country to solve the country's economic produced?
problem → HOW MANY of the scarce resources will be used in
= desires become real demand
determine : -PUBLIC AND PRIVATE BUSINESSES the production of each good
I want a Ford Figo but have demand for a -WHO OWNS OWN PROPERTY 3. DISTRIBUTION QUESTION
Kia Picanto - WHO’s IN CHARGE OF COUNTRY'S MARKETS??? = FOR WHOM will the goods and services be produced?
2 © Noted Summaries Grade 9 [EMS : Management / Economics] = WHO will receive the goods and services?
www.notedsummaries.co.za
, CENTRALLY PLANNED ECONOMY MARKET ECONOMY
BUSINESS→STATE OWNED GOVERNMENT → NOT ACTIVELY INVOLVED
STATE→ GET PROFIT & PROVIDE SERVICES GOVERNMENT → GOODS AND SERVICES
(GOVERNMENT CONTROLLED ECONOMY) (ECONOMIC DECISION IS MADE BY INDIVIDUALS)
Features of centrally planned economy: -an economic system in which economic decisions are made by private
individuals who own the factors of production
→ Government controls the factors of production (STATE)
Features of market economy:
→ Government decides what goods and services are produced
→ Private individuals own and control the factors of production
→ Government decides how these goods and services are produced
→ Entrepreneurs decide what to produce
→ Government decides who will be the consumers of these goods and
services → Entrepreneurs decide how the production will take place
→ Individuals decide what goods and services will be used.
ADVANTAGES DISADVANTAGES ADVANTAGES
→ Reduce inequality
→ government cannot process all → good way of allocating resources DISADVANTAGES
relevant information fast on an efficient way = giving private
→ EMPLOYMENT☞ STABLE enough to make economic → Economic inequality
persons a good motivation of
ECONOMY decisions profit motive and entrepreneurship → Self-interest
→ Economic equality → Absence of profit motive is encouraged
→ ENTREPRENEURSHIP IS → Exploitation
→ Resources are used for the → ENTREPRENEURS ARE ENCOURAGED AND REWARDED → public goods and services not
collective benefit of all DISCOURAGED → DETERMINE YOUR OWN STANDARD provided/scarcity provided
OF LIVING → BIG DIFFERENCE BETWEEN RICH
→ Economically vulnerable people → GOVERNMENT
→ LITTLE GOVERNMENT AND POOR PEOPLE (INCOME)
are protected CONTROLS EVERYTHING
INTERFERENCE
→ RESOURCES ARE NOT
→ INDIVIDUALS HAVE FREEDOM OF
SHARED EQUALLY CHOICE
3 © Noted Summaries Grade 9 [EMS : Management / Economics] www.notedsummaries.co.za
, MIXED ECONOMY [SOUTH AFRICA] GLOBALISATION
Trend towards greater economic integration and cooperation between
= mixture of private and state control over the economy different countries
Features of the mixed economy:
GLOBAL ECONOMY
→ Capital derived from banks, shares, and government [expended tax
revenue]
GLOBALISATION OF PRODUCTION MARKETS,
→ Entrepreneurs decide WHAT to produce
FINANCE, COMMUNICATIONS AND THE WORK
→ Government spends money on public services
→ Government implements legislation to control economic activity FORCES
[e.g., Affirmative action in SA]
(ECONOMY OF THE WORLD)
Features of global economy:
→ Free Trade in Goods and Services
ADVANTAGES DISADVANTAGES → Free movement of labour
→ Combination of state and → Limiting economic growth
→ Free movement of capital
private enterprises = good → Major GOVERNMENT involvement
economic growth in the economy [government
→ Government = promote bureaucratic and susceptible to
equilibrium growth of the
economy [income more equally
corruption]
ADVANTAGES DISADVANTAGES
than in market economy] FREE TRADE = EXPORTS AND IMPORTS ↑ WHICH CAUSES: → Unfair competition and more
→ Private businesses are urged to → Competition between producers ↑ + prices for consumers ↓. beneficial for developed countries
→ greater range of goods and services → Exploitation of workers due to
contribute to the welfare of
→ Expanding export markets for domestic manufacturers = being able to sell more goods +
citizens earning more revenue
investors paying low wages
→ Competition is promoted [+ THE FREE MOVEMENT OF LABOUR: → Outflow of skills due to skilled
protect citizens] → opportunity to increase income + standard of living ↑ > best jobs t labour leaving the country in
→ ↓ unemployment figure in underdeveloped areas + distribution of skills and knowledge search of high wages
between countries.
THE FREE MOVEMENT OF CAPITAL
→ Stimulate investment in poor countries
→ Lead to job creation and economic growth
4 © Noted Summaries Grade 9 [EMS : Management / Economics] www.notedsummaries.co.za
