Topic 2 - Economic Systems and Circular Flow Questions

GRADE 9
ECONOMIC SYSTEMS
SHORT QUESTIONS
1. Complete the following table:
Type of Economic System Planned Market
Who decides?
What to produce?
How to produce?
For whom to produce?
2. Complete the following table:

Characteristic Planned Market Mixed
economy economy economy
Government control
Profit Motive
Ownership of factors of
production
Choice of occupation
Allocation of resource
Distribution of output
Prices
Economic growth
Privatization
Bureaucracy
Interest
Decisions
Private Enterprise
Page 1 of 6
GIVE THE TERM FOR THE FOLLOWING:
1. The way in which a country runs its economy. ________________________
2. A system that a country chooses to allocate its resources and distribute its
goods and resources. ____________________________________________
3. An economic system in which government make all the decisions about the
production and consumption of goods and services. ____________________
4. An unplanned economy in which land, property and business are owned by

private people not the government. _________________________________
5. The government as well as people and businesses owns the land and natural
resources
_____________________________________________________________
6. The increased integration of businesses and governments across the world.

_____________________________________________________________
THE CIRCULAR FLOW
SHORT QUESTIONS
1. Study the passage and then answer the questions below.
Dollf Winters is a tourist from the Netherlands who are on holiday in South Africa for two weeks.
Dan Smith and his family sold t-shirts with the South African flag on to Dollf and other tourists
along the beach under the name of "Outrages t-shirts". They have a permit obtained from the
Cape Aghalhus Municipality.
Complete the table below by selecting examples from the passage that
represents the participants in the economic cycle.
HOUSEHOLDS
BUSINESSES
GOVERNMENT
FOREIGN SECTOR
Page 2 of 6
2. Read the following statements carefully. Then identify whether these countries
have an open or a closed economy.
2.1 South Africa exports iron-ore to China. _________________
2.2 Zimbabwe don’t let foreigners buy shares in his companies. ___________
2.3 Japan does not allow its citizens to work in other countries. ___________
2.4 South Africa lend R200 million to Senegal. _____________
2.5 Russia does not allow its citizens to work in other countries. ___________
2.6 England have invested money in oil companies in Nigeria. ____________
3. Provide a different name for:

3.1 Households. ________________
3.2 Businesses. ________________
4. What is the remuneration for the following factors of production?
4.1 Natural Resources. _________________
4.2 Labour. ___________________
4.3 Capital. _________________
4.4 Entrepreneurship. _________________
5. Study the passage and answer the questions that follow.

John's family consists of himself, his father and mother and two younger sisters. His
mother is a teacher who works for the WCED and his father works at Checkers. He
and his two sisters are both still at school. Their parents' income is spent on food,
clothing, rent, transportation and other expenses that arise. John's father also repair
electrical appliances in his garage to work for extra income, under the name
"Electrocare".
5.1 Identify the following from the passage.

A. The household.
______________________________________________________________
B. Businesses.
______________________________________________________________
C. Government.
______________________________________________________________
Page 3 of 6
5.2 Why is John's father part of households and businesses?
______________________________________________________________
5.3 Give two examples of goods and services from the text that John and his
family need.
______________________________________________________________
5.4 What factor of production is owned by John's mother and father and what
do they receive as compensation?
______________________________________________________________
5.5 Briefly explain the main function of:
A. Households.
______________________________________________________________
B. Businesses.
______________________________________________________________
6. Give two other names for the government.

___________________________________________________________________
7. Identify two companies owned by the state.
___________________________________________________________________
8. Provide two examples of goods and services provide by the government.
___________________________________________________________________
9. Explain two functions of the government.
___________________________________________________________________
10. How do the government finance services it provides? _____________________
11. What levels of government are represented by the following?

11.1 WCED. ___________________________________________________
11.2 Theewaterskloof Municipality. __________________________________
11.3 The Minister of Education. ____________________________________
12. Explain the role of the government as a producer and consumer in the economic
cycle.
___________________________________________________________________
13. Explain in your own words the concepts “imports” and “exports”.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Page 4 of 6
14. Who is South Africa's largest trading partner in terms of imports and exports?
_________________________________________________________________
15. Study the passage and answer the questions that follow.
Peter's father works at Pick and Pay. They buy their groceries at Pick and Pay at the
end of each month.
15.1 Which role players in the cycle are represented by Peter's father and Pick and
Pay?
___________________________________________________________________
___________________________________________________________________
15.2 Explain the flow of goods and services between the role players mentioned in
15.1
___________________________________________________________________
15.3 Which market forms part of the flow mentioned in (5.1.2)

___________________________________________________________________
15.4 Which factor of production is mentioned in the passage?

___________________________________________________________________
15.5 Explain the flow of the factor of production mentioned in (5.1.3) between the
role players in the cycle.
___________________________________________________________________
15.6 Which market forms part of the flow in (5.1.5)?

___________________________________________________________________
16. Complete the table. Read the statements below through carefully and then
make a cross By the right participant.
Flows in the cycle Households Businesses Government
Receive tax.
B. Pay company tax.
C. Receive wages.
D. Receive payments for goods and services
Page 5 of 6
E. Pay personal income tax.
F. Receive profit from sales of goods

and services.
G. Pay rent.
H. Receive VAT from the sales of goods

and services.
I. Pay teachers' salaries.
J. Rent received on savings.
Page 6 of 6

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GRADE 9

1. Complete the following table:

Type of Economic System Planned Market

2. Complete the following table:

1. The way in which a country runs its economy. ________________________

4. An unplanned economy in which land, property and business are owned by

6. The increased integration of businesses and governments across the world.

THE CIRCULAR FLOW

3. Provide a different name for:

5. Study the passage and answer the questions that follow.

5.1 Identify the following from the passage.

6. Give two other names for the government.

10. How do the government finance services it provides? _____________________

11. What levels of government are represented by the following?

15.3 Which market forms part of the flow mentioned in (5.1.2)

15.4 Which factor of production is mentioned in the passage?

15.6 Which market forms part of the flow in (5.1.5)?

B. Pay company tax.

D. Receive payments for goods and services

F. Receive profit from sales of goods

H. Receive VAT from the sales of goods

I. Pay teachers' salaries.

J. Rent received on savings.

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