Macro

Circular flow and quantitative elements

In an open economy, injections are investment, government spending and exports, and leakages are savings, taxes and imports.

CAPS

Grade 11 · Economics · Macro

Economics wants the concept, then the diagram or the data, then the consequence.

The papers
Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.
How to write it
Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.
How a marker reads it
A common mix-up is calling an import an injection because money moved, when an import leaks spending out of the domestic flow.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

Worked theory

Worked theory. A household in Mdantsane receives a social grant and spends R800 of it at a local shop on maize meal and soap, so that spending stays with a South African seller. The grant itself was government spending, an injection, when the state paid it. The same month the household spends R2 000 on a phone imported from abroad. That R2 000 is an import leakage, because it does not become a South African firm's revenue. Money kept in a tin is saving, and VAT on the maize meal is tax, the other two leakages. The spaza gained from the grant. The imported phone paid a factory somewhere else.

More worked examples

Worcester bakery oven
A bakery in Worcester spends R40 000 on a new oven made in South Africa instead of paying that money out as extra wages for consumption. Buying a capital good is investment, an injection. If the oven had been imported, the price of the machine would leak out as an import, and only the local installer's fee would stay. The label depends on where the spending lands. The same rands can inject or leak.
Durban citrus container
A farm in Limpopo sells a container of oranges to a buyer in Europe, shipped out of Durban. Foreign spending on South African output is an export, an injection. The farm then pays income tax on the profit, which is a leakage, and workers may save part of their wages, another leakage. The container leaving the harbour is not itself a leakage. The spending arrived from outside, which is the opposite direction from an import.

In ordinary words

Injections add spending that did not come from current household consumption. Investment is firms buying capital goods, government spending is the state buying goods and services, and exports are foreigners buying local output. Leakages remove spending before it returns to local firms: savings are income not spent, taxes are paid to the state, and imports are spending that leaves for foreign producers. If leakages outweigh injections, local income tends to shrink, because a rand spent on local food stays in the flow and a rand spent on an import leaks out.

In South Africa

A Mdantsane till rings up maize meal beside a phone that was made in another country.

Part 1 / 4

What it is

In an open economy, injections are investment, government spending and exports, and leakages are savings, taxes and imports.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

C = R3 000 bn, I = R700 bn, G = R1 200 bn, X = R1 400 bn, M = R1 300 bn. Calculate GDP (expenditure).

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: C = R3 000 bn, I = R700 bn, G = R1 200 bn, X = R1 400 bn, M = R1 300 bn. Calculate GDP (expenditure).

Before any working — hunt first

Given

Numbers and units already in the sentence: R3 · 000 bn · R700 bn · R1 · 200 bn · R1 · 400 bn · R1 · 300 bn. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: GDP (expenditure). Circle that word — that is the missing variable.

Find

We are required to find: GDP (expenditure). Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: GDP = C + I + G + (X − M). Then substitute the given, one line at a time, to get GDP (expenditure).

In other words — as if you have never seen this before

If you have never seen this before: GDP = C + I + G + (X − M). We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

C, I, G, X, M.

3. Which method — and why this one?

GDP=C+I+G+(X − M).

4. Step-by-step working

01 / 08
Step A — Read the question twice
Slow down. Circle the word that names the unknown. Underline every number and its unit. Do not grab a formula yet — first decide what the paper is actually asking.
Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.
02 / 08
Step A2 — Hunt: Given, Missing, Find, Calculate
Given: Numbers and units already in the sentence: R3 · 000 bn · R700 bn · R1 · 200 bn · R1 · 400 bn · R1 · 300 bn. Copy each one into a column. A name without a number is not given. Missing: After you copy the given, the letter that still has no number is missing. The paper is pointing at: GDP (expenditure). Circle that word — that is the missing variable. Find: We are required to find: GDP (expenditure). Write that as a symbol on the left, with a question mark, before you touch a formula. Calculate: What we need to calculate: GDP = C + I + G + (X − M). Then substitute the given, one line at a time, to get GDP (expenditure).
Why this step: Do not name the letters yet. First hunt: what already has a number (Given), what has no number (Missing), the word the paper wants (Find), and which formula still contains the missing letter (Calculate).
03 / 08
Step B — Write the given in a column
C, I, G, X, M.
Why this step: A column with units stops you mixing cm with m, or minutes with seconds. Markers can also see you started correctly.
04 / 08
Step C — Name the method in words
GDP=C+I+G+(X − M).
Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.
05 / 08
Add
3 000+700+1 200+(1 400 − 1 300)=R5 000 bn.
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
06 / 08
Step G — Sense-check the size
Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.
Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.
07 / 08
Step F — Box the answer with its unit
GDP R5 000 bn.
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
08 / 08
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

GDP R5 000 bn.

Copy onto your answer sheet — in this order

Answer: GDP R5 000 bn.

6. Check it like a marker

Net exports +R100 bn.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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