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ECONOMIC AND MANAGEMENT SCIENCES STUDY GUIDE Grade 8
A member of the FUTURELEARN group
Economic and Management Sciences Study guide
CAPS aligned
S Loots B Pretorius
2008-E-EMS-SG01
Í4(È-E-EMS-SG01HÎ
Grade 8
Study Guide G08 ~ Economic and Management Sciences
CONTENTS LESSON ELEMENTS ................................................................................................ 5 PREFACE .................................................................................................................. 7 YEAR PLAN .............................................................................................................. 9 UNIT 1 ...................................................................................................................... 11 Lesson 1: Revision ................................................................................................... 11 ACTIVITY 1.1..................................................................................................... 15 Lesson 2: The economy – Government ................................................................... 16 ACTIVITY 2.1..................................................................................................... 18 ACTIVITY 2.2..................................................................................................... 19 Lesson 3: The economy – National budget .............................................................. 22 ACTIVITY 3.1..................................................................................................... 25 ACTIVITY 3.2..................................................................................................... 27 Lesson 4: The economy – Standard of living ........................................................... 30 ACTIVITY 4.1..................................................................................................... 32 ACTIVITY 4.2..................................................................................................... 33 ACTIVITY 4.3..................................................................................................... 36 ACTIVITY 4.4..................................................................................................... 37 ACTIVITY 4.5..................................................................................................... 39 ACTIVITY 4.6..................................................................................................... 41 Lesson 5: Financial literacy – Accounting concepts ................................................. 41 ACTIVITY 5.1..................................................................................................... 47 ACTIVITY 5.2..................................................................................................... 47 ACTIVITY 5.3..................................................................................................... 48 ACTIVITY 5.4..................................................................................................... 49 ACTIVITY 5.5..................................................................................................... 50 ACTIVITY 5.6..................................................................................................... 51 ACTIVITY 5.7..................................................................................................... 56 ACTIVITY 5.8..................................................................................................... 56 Lesson 6: Financial literacy – Source documents .................................................... 57 ACTIVITY 6.1..................................................................................................... 66 ACTIVITY 6.2..................................................................................................... 69 ACTIVITY 6.3..................................................................................................... 69 ACTIVITY 6.4..................................................................................................... 70 EXERCISE 1: OPEN BOOK TEST .................................................................... 71
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Study Guide G08 ~ Economic and Management Sciences
UNIT 2 ...................................................................................................................... 75 Lesson 7: Revision ................................................................................................... 75 ACTIVITY 7........................................................................................................ 78 Lesson 8: Financial literacy – Overview of the accounting cycle .............................. 79 ACTIVITY 8.1..................................................................................................... 82 Lesson 9: Financial literacy – Cash Receipts Journal (services).............................. 82 ACTIVITY 9.1..................................................................................................... 88 ACTIVITY 9.2..................................................................................................... 88 ACTIVITY 9.3..................................................................................................... 89 ACTIVITY 9.4..................................................................................................... 90 ACTIVITY 9.5..................................................................................................... 91 Lesson 10: Entrepreneurship – Factors of production .............................................. 92 ACTIVITY 10.1................................................................................................... 95 ACTIVITY 10.2................................................................................................... 98 ACTIVITY 10.3................................................................................................. 102 Lesson 11: The economy – Markets ...................................................................... 102 ACTIVITY 11.1................................................................................................. 105 EXERCISE 2: OPEN BOOK TEST .................................................................. 105 Lesson 12: Revision for the June examination ....................................................... 107 UNIT 3 .................................................................................................................... 110 Lesson 13: Revision ............................................................................................... 110 ACTIVITY 13.................................................................................................... 112 Lesson 14: Financial literacy – Cash Receipts Journal .......................................... 113 ACTIVITY 14.1................................................................................................. 114 ACTIVITY 14.2................................................................................................. 114 Lesson 15: Financial literacy – Cash Payments Journal ........................................ 116 ACTIVITY 15.1................................................................................................. 120 ACTIVITY 15.2................................................................................................. 120 ACTIVITY 15.3................................................................................................. 121 ACTIVITY 15.4................................................................................................. 122 ACTIVITY 15.5................................................................................................. 122 ACTIVITY 15.6................................................................................................. 123 ACTIVITY 15.7................................................................................................. 124 Lesson 16: Entrepreneurship – Forms of ownership .............................................. 125 ACTIVITY 16.1................................................................................................. 129 ACTIVITY 16.2................................................................................................. 134
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Study Guide G08 ~ Economic and Management Sciences
EXERCISE 3: OPEN BOOK TEST ................................................................. 138 UNIT 4 .................................................................................................................... 140 Lesson 17: Revision ............................................................................................... 140 ACTIVITY 17.................................................................................................... 142 Lesson 18: Entrepreneurship – Levels and functions of management ................... 143 ACTIVITY 18.1................................................................................................. 147 ACTIVITY 18.2................................................................................................. 149 Lesson 19: Financial literacy – General ledger and trial balance ........................... 150 ACTIVITY 19.1................................................................................................. 154 ACTIVITY 19.2................................................................................................. 160 ACTIVITY 19.3................................................................................................. 160 ACTIVITY 19.4................................................................................................. 163 ACTIVITY 19.5................................................................................................. 163 ACTIVITY 19.6................................................................................................. 163 ACTIVITY 19.7................................................................................................. 163 ACTIVITY 19.8................................................................................................. 166 ACTIVITY 19.9................................................................................................. 167 ACTIVITY 19.10............................................................................................... 169 ACTIVITY 19.11............................................................................................... 169 EXERCISE 4: OPEN BOOK TEST .................................................................. 170 Lesson 20: Examination preparation ...................................................................... 172 GLOSSARY ........................................................................................................... 179 BIBLIOGRAPHY AND REFERENCES.................................................................. 184
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Study Guide G08 ~ Economic and Management Sciences
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Study Guide G08 ~ Economic and Management Sciences
LESSON ELEMENTS LEARNING AIMS What you should know at the end of the lesson. Taken from CAPS.
IMPORTANT TERMINOLOGY New terminology to improve understanding of the subject as part of the lesson. DEFINE Definitions of concepts to understand the content. IMPORTANT A summary or explanation of the main concepts of a lesson.
TIPS Any information other than the content, to guide learners through the learning process.
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Study Guide G08 ~ Economic and Management Sciences
FOR THE CURIOUS Encouragement to do in-depth research about the content. Expand the activity and exercise to such an extent that learners are encouraged to explore. For gifted learners: expanded exercises. For Learners with Special Educational Needs (LSEN): explain the need to complete the basic questions to achieve a passing mark. ACTIVITY Questions throughout the lesson that must be answered in order to test your knowledge of the lesson completed. EXERCISE In conclusion of the specific unit. Formative assessment. CORE CONTENT Emphasise the core of content; in-depth explanation of a specific section of the lesson; needs to be understood. STUDY/REVISION Time spent to study the content in conclusion of the unit and in preparation for the test or examination.
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Study Guide G08 ~ Economic and Management Sciences
PREFACE Welcome to Economic and Management Sciences. The subject concerns the efficient and effective use of different types of private, public or collective resources to satisfy human needs. Economic Management Sciences is a practical subject that equips learners with real life skills for personal and intercommunal development. Here are some tips on how to use the study guide: •
It is essential that you work through all the units in the study guide.
•
Each lesson contains appropriate activities that you need to complete to better understand the lesson.
•
An open book test at the end of each unit will test your knowledge of that unit. This will facilitate preparation for future tests and examinations.
•
You are also provided with a workbook containing all the necessary answer sheets you will need to complete the financial literacy activities. Note that in the various activities, it is indicated when you should use the workbook.
•
It is important that you read magazines and newspapers on various topics covered in the study guide to acquire in-depth knowledge of the topics.
•
Know what is happening in the economy and finances of the country.
RECOMMENDED RESOURCES •
This study guide is essential.
•
A calculator to help you with the financial literacy sections.
•
The provided workbook to complete the accounting activities.
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Study Guide G08 ~ Economic and Management Sciences
The formal assessments for the year are fully explained in the table below and will give you a good idea what assessment tasks must be completed. Formal assessment programme for Economic and Management Sciences
Form of assessment
June examination
Case study
September test
November examination
UNIT 4
Project
UNIT 3
March test
UNIT 2
Data response
UNIT 1
Assessment instruments
Rubric memo
Memo
Rubric/ Checklist
Memo
Rubric memo
Memo
Memo
Total marks
30 marks
50 marks
50 marks
75 marks
30 marks
100 marks
200 marks
Date completed
Week 5
Week 10
Week 6
Week 9
Week 7
Week 10
Week 10
60 min
120 min
Time allowance
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60 min
60 min
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Study Guide G08 ~ Economic and Management Sciences
YEAR PLAN UNIT 1
TOPIC
STARTING DATE
1 Revision 2 The economy: Government 3 The economy: National budget 4 The economy: Standard of living 5 Financial literacy: Accounting concepts 6 Financial literacy: Source documents
2
7 Revision 8 Financial literacy: Accounting cycle 9 Financial literacy: Cash Receipts Journal (service) 10 Entrepreneurship: Factors of production 11 The economy: Markets
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COMPLETION DATE
Study Guide G08 ~ Economic and Management Sciences
12 June examination 3
13 Revision 14 Financial literacy: Cash Receipts Journal (service) 15 Financial literacy: Cash Payments Journal (service) 16 Entrepreneurship: Forms of ownership
4
17 Revision 18 Entrepreneurship: Levels and functions of management 19 Financial literacy: General ledger and trial balance (service) 20 Examination preparation 21 November examination
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Study Guide G08 ~ Economic and Management Sciences
Unit
1
UNIT 1 Lesson 1: Revision STUDY/REVISION Read through the following segment to refresh your memory on what was covered in Economic and Management Sciences in Grade 7. 1.1.1 The Economy The history of money Money is so interwoven into our entire existence that we cannot imagine a world without it. There was, however, a time when there was no money. Can you imagine what it must have been like living without money? People used to trade goods, which meant that they exchanged certain goods for other goods
Source: www.pbs.org
instead of money. Trade gave way to payment methods because all commodities did not have the same value. The first forms of payment were coins and cowrie shells. Needs and desires •
Needs: Essential goods which we cannot survive without, e.g., food, water and shelter.
•
Desires: Goods and services we can survive without, e.g., cellphones, expensive clothes and shoes.
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Source: www.123rf.com
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Study Guide G08 ~ Economic and Management Sciences
Unit
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Needs and desires affect the way societies work, live and spend money. People’s needs and desires are unlimited, but the resources needed to satisfy these needs and desires are limited. Goods and services There are four main factors of production: labour, capital, natural resources and entrepreneurship. •
Labour: Refers to the work people do.
•
Capital: Refers to money, as well as equipment, buildings and land that we call capital goods.
•
Natural resources: Resources that come from nature, e.g., water, soil and oil.
•
Entrepreneurship: Refers to an entrepreneur’s ability to combine and successfully use all three of the other factors of production in order to produce a final product or provide a service to consumers.
Inequality and poverty Poverty means that people do not have enough money to meet their basic needs. Factors that contribute to poverty are: •
Inequalities of the past.
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Illiteracy and lack of education.
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Economic conditions in a country.
The production process Productivity refers to the amount of goods and services that can be produced in a certain amount of time. •
The primary sector produces raw materials, e.g., agriculture and mining.
•
The secondary sector produces finished goods from the raw materials produced by the primary sector.
•
The tertiary sector sells the goods produced by the secondary sector and provides services to consumers.
Developing countries usually have a larger primary sector, while developed countries tend to have larger secondary and tertiary sectors.
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Study Guide G08 ~ Economic and Management Sciences
Unit
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1.1.2 Entrepreneurship Businesses Businesses are the institutions that trade in goods or services and then supply it to consumers. There are three main forms of businesses, namely: •
Formal business – A business that is registered with the government and which pays tax.
•
Informal business – A business that is not registered with the government and which does not pay tax.
•
Trading enterprise – A business involved in the purchase and sale of goods and services.
Formal and informal businesses can be both producers and consumers in the economy. The entrepreneur An entrepreneur is a person with the ability to turn an idea into a profitable business. An entrepreneur must have certain characteristics to be successful, namely: •
Expert in their field. Source: www.graphicsfactory.com
•
Motivated.
•
Risk-taker.
•
Dedicated.
Entrepreneur’s day An entrepreneur’s day needs a lot of planning, marketing and the effective use of a budget. Before you can start planning for an entrepreneur’s day, you must prepare a detailed budget to calculate your expected income and expenses.
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Study Guide G08 ~ Economic and Management Sciences
Unit
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1.1.3 Financial literacy Accounting terms •
Capital
•
Assets and liabilities
•
Income and expenses
•
Profit and loss
•
Budget
•
Savings
•
Banking
•
Financial records
•
Transactions
Source: http://northwestchicagoland.northwestquarterly.com
Income and expenses Personal income refers to an individual’s total income from all sources such as salaries, wages, investments, dividends, rental income, profits and interest over a certain period. Personal expenses refer to all the money an individual spends on daily living expenses (e.g., food), accounts (e.g., water and electricity), fees (e.g., school fees), insurance and tax. Budget An individual’s estimated income and expenses for a certain period. Savings A portion of the money that a person earns, which they put away for future use.
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Study Guide G08 ~ Economic and Management Sciences
Unit
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ACTIVITY 1.1: Revision State whether the following statements are true or false. 1.1.1
Before the advent of money, people used to trade goods.
1.1.2
There are only three factors of production, namely labour, natural resources and raw materials.
1.1.3
A formal business must be registered with the government.
1.1.4
When saving a portion of your money, you put it away for later use.
1.1.5
A budget is the estimated income and expenditure for a month or year.
1.1.6
An entrepreneur is a person who turns a profitable idea into a business.
1.1.7
Entrepreneurship requires no planning.
1.1.8
A business refers to the purchase of goods and services.
1.1.9
The primary sector produces raw materials.
1.1.10 Formal and informal businesses can be both producers and consumers in the economy.
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Study Guide G08 ~ Economic and Management Sciences
Unit
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Lesson 2: The economy – Government LEARNING AIMS After you have completed this lesson, you should be able to: •
Understand the meaning of the government.
•
Know the different levels of the government and the roles of the different levels of government.
•
Know the different levels of government in respect of households in the use of resources and services.
INTRODUCTION South Africa’s first democratic elections were held in 1994 and gave all citizens the right to vote. This brought an end to apartheid and meant that South Africa entered a new era in its social and economic development and growth. This lesson will deal with the government, the purpose of government, different levels of government, as well as how the government works. Source: www.ezakwantu.com
IMPORTANT TERMINOLOGY Democracy National election Infrastructure
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Study Guide G08 ~ Economic and Management Sciences
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1.2.1 Meaning of government DEFINE
Democracy: A system of government where the leaders and representatives of a country have been elected by the people of the country. National election: An event in which the leaders and representatives of a country are elected by the citizens. Infrastructure: Physical facilities such as roads, bridges and buildings that a country’s economy needs to function and grow. It also includes services such as electricity, water and sewage services. The government is an organisation with the authority to govern a country. It is responsible for maintaining order and ensuring that infrastructure and services are provided to the country’s citizens. The government’s members are elected through a democratic election system. Citizens participate in the national election, which takes place every five years, and vote for who they want as leaders. Managing a country and its residents is a very big task. The government is responsible for: •
Governing the country’s residents.
•
The provision of services and infrastructure required for economic growth.
•
Generating revenue and spending it in such a way that economic objectives can be achieved to meet residents’ basic needs.
•
Protecting the country’s residents.
Although there are many different duties that the government must meet, the abovementioned responsibilities are seen as the most important tasks.
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Study Guide G08 ~ Economic and Management Sciences
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ACTIVITY 2.1 2.1.1 Make a list of ten questions you would like to ask the president of South Africa. 2.1.2 Would you want to be president? Give two reasons for your answer. 1.2.2 Different levels of government Since it is an enormous task to govern a country, the government is divided into different levels, namely: •
National government
•
Provincial government
•
Local government
The diagram below gives an explanation on how the various levels of government come together and function: The South African government Responsible for the general management of the country and its residents
National government
Provincial government
Deals with issues on a local level within towns and cities
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Local government
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The country has nine provinces, of which each has its own objectives that need to be reached in order to better the province and, in turn, the country.