Economic Environment. NQF Level 4 LECTURER S GUIDE. D Bekker, M Richards, FHB Serfontein & A Smith

Transcription

1 Economic Environment NQF Level 4 D Bekker, M Richards, FHB Serfontein & A Smith LECTURER S GUIDE

2 Economic Environment Lecturer' s G uide TVET FIRST NQF Level 4 D Bekker, M Richards, FHB Serfontein, A Smith

3 TVET FIRST Economic Environment NQF Level 4 Lecturer s Guide D Bekker, M Richards, FHB Serfontein, A Smith 2008 Illustrations and design Macmillan South Africa (Pty) Ltd 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, photocopying, recording, or otherwise, without the prior written permission of the copyright holder or in accordance with the provisions of the Copyright Act, 1978 (as amended). Any person who does any unauthorised act in relation to this publication may be liable for criminal prosecution and civil claims for damages. First published 2008 Published by Macmillan South Africa (Pty) Ltd Private Bag X19, Northlands, 2116, Gauteng, South Africa ISBN-13: WIP: 2126M000 It is illegal to photocopy any page of this book without written permission from the publishers. While every effort has been made to trace the copyright holders and obtain copyright permission from them, in some cases this has proved impossible due to logistic and time constraints. Any copyright holder who becomes aware of infringement on our side is invited to contact the publisher. Note: Any reference to Further Education and Training (FET) in this book should be taken to mean Technical and Vocational Education and Training (TVET). To order any of these books, contact Macmillan Customer Services at: Tel: (011) Fax: (011) customerservices@macmillan.co.za

4 Contents TVET Colleges An overview The NQF National Certificate (Vocational) Purpose of the qualification Structure, rules of combination and credit allocation Certification requirements Assessment Outcomes-based assessment Critical Outcomes OBE assessment is student-centred Designing outcomes-based assessment tasks Designing outcomes-based assessment instruments Assessment and the National Certificate (Vocational) External assessment Internal assessment The Portfolio of Evidence (PoE) Recording and reporting v v v v vi vi vi vii viii viii ix xi xii xii xii xv The TVET FIRST series xvi TVET FIRST Economic Environment NQF Level 4 What is Economic Environment? Why is Economic Environment important in the Finance, Economics and Accounting programme? The link between the Economic Environment Learning Outcomes and the Critical and Developmental Outcomes Factors contributing to achieving the Economic Environment Learning Outcomes Topics dealt with in Economic Environment Learning Programme for Economic Environment Resources needed for teaching Economic Environment Level 4 xvi xvi xvi xvii xvii xvii xviii xxxiv

5 Topic 1: Macro economic principles as they apply to the South African business environment Module 1: Basic economic principles 1 Module 2: Measure the macro economy 12 Module 3: Trends in the world economy 18 Module 4: Role of money and monetary policy 22 Module 5: Fiscal policy 25 Topic 2: Basic economic concepts central to local economic development in South Africa Module 6: The interaction of supply and demand in the South African political economy 30 Module 7: The role of government in the South African economy 34 Module 8: The nature of development economics with specific reference to South Africa 37 Module 9: Presentation to illustrate the key economic concepts central to local economic development 41 Topic 3: The environment of local economic development in South Africa Module 10: Define and explain the purpose of local economic development in South Africa 43 Module 11: Identify and describe legislation that impacts on local economic development 48 Module 12: Explain the current challenges for local economic development 53 Module 13: Explain the role of municipalities in local economic development 56 Topic 4: Requirements of import and export factoring for discounting Module 14: International trade 60 Module 15: Basic International Finance 68 Module 16: Compare import/export factoring with Letter of Credit 73 Module 17: The process of initiating import/export factoring 79 Module 18: Risk management principles associated with import/export factoring 82 Annexure A Portfolio of Evidence for Economic Environment 86 Rubrics 97

6 TVET colleges An overview The Constitution of South Africa (Act No. 108 of 1996) states in section 29(1) that: Everyone has the right to a basic education, including adult basic education; and to further education which the state must make progressively available and accessible. The Department of Education s plan to realise the goal of making further education progressively available and accessible includes the introduction of public TVET colleges (formerly called technical colleges). Following a process of merging, the technical colleges have been restructured into 50 TVET colleges, of which all but one has multiple campuses. Substantial funding has been allocated to redevelop and re-equip the public colleges of the next few years. The NQF National Certificate (Vocational) The NQF National Certificate is a vocationally orientated qualification that allows students to progress from the General Education and Training (GET) band into the Further Education and Training (FET) band along a vocational pathway into a particular sector of the world of work. This qualification is underpinned by: an outcomes-based approach to education high knowledge and high skills integrated and applied competence progression, articulation and portability social transformation, human rights, inclusivity, environmental and social justice credibility, quality and efficiency. Purpose of the qualification The NQF National Certificate aims to equip students with the practical knowledge, skills, understanding and applied competence required for employment at an elementary level of a particular occupation or trade. It also aims to promote the holistic development of young people into responsible, productive citizens. Structure, rules of combination and credit allocation The NQF National Certificate integrates academic knowledge and theory with practical skills and values specific to each vocational area. The National Certificate is registered as a 130-credit qualification. Students have to demonstrate competence in a total of seven subjects drawn from the two components that make up the qualification: the fundamental learning component and the vocational component. The fundamental learning component forms the basis for all other learning at this level of certification and has to be completed by all students. The vocational component defines the qualification as being of a specific type. It involves learning experiences relevant to the particular vocational field and also provides for the attainment of specific learning required for depth and specialisation within a particular programme. The diagram that follows shows the rules of combination and credit allocation for the seven subjects required for certification. Note that the fourth vocational subject can be selected from any of the vocational programmes offered by the college. v

7 3 compulsory fundamental subjects = 50 credits 3 compulsory + 1 (optional) vocational subjects = 80 credits 3 fundamental + 4 vocational subjects = 130 credits Figure 1: Fundamental and vocational subjects constituting the NQF National Certificate (Vocational), with credit allocation Certification requirements The National Certificate is awarded to students who successfully acquire the required 130 credits. With regard to the fundamental component of the qualification, students must obtain at least: 40% in their language subject 30% in Mathematics/Mathematical Literacy 40% in Life Orientation. Students must obtain at least 70% in each of their four vocational subjects. Assessment Let s begin by reviewing the principles of assessment within the context of Outcomes-based Education. Outcomes-based assessment Outcomes-based assessment should be about: judging what a student knows and can do being able to determine the relationship between the student and the curriculum at any time vi

8 monitoring learning in an ongoing manner to determine what students are doing well and where they should improve observing, describing, collecting, recording, scoring and interpreting information about what a student knows and can do, or doesn t know and can t do. Critical Outcomes Critical Outcomes support outcomes-based education and students are also required to demonstrate their competence in these outcomes. Table 1 summarises the Critical Outcomes and suggests strategies for assessing them. Critical Outcomes Assessment strategies Communicate effectively using visual, symbolic and/or Use diagrams, sketches, pictures in the assessment task language skills in various modes and ask students to interpret or explain in short answers, essays, etc. Use science and technology effectively and critically Present situations in which the students must show how showing responsibility towards the environment and the they would evaluate a situation and what decisions they health of others would make about using science or technology. Work effectively with others as members of a Divide students into different groups for tasks that require team/group/organisation/community them to divide the work and to share and collate their efforts. Assess how well the students work together and achieve the set outcomes in different groups. Organise and manage themselves and their activities Give students increasingly complex projects and assess responsibly and effectively how well they plan the project to ensure that they complete all aspects in time. Collect, analyse, organise and critically evaluate Set tasks that have a number of steps and that require information students to undertake research, to categorise the information and to make an assessment or judgement based on the information. Identify and solve problems and make decisions using Set original and increasingly complex problems or case critical and creative thinking studies and expect the students to develop their own solution to the problem. Demonstrate an understanding of the world as a set of Set assessment tasks that require depth of thinking, that related systems by recognising that problem-solving incorporate several related scenarios, and that require contexts do not exist in isolation students to decide how one problem and its resolution affects another problem and its resolution. Table 1: Critical Outcomes and suggested assessment strategies vii

9 OBE assessment is student-centred In order to give breadth and depth to assessment and to allow individual students to show their strengths, the lecturer should be conscious of the various learning styles when developing assessment tasks and try to address various learning styles. Table 2 summarises the multiple intelligences described by Howard Gardner and the learning styles that relate to them. Multiple intelligences Learning style Verbal/Linguistic The student thinks in words; likes reading, writing, listening & speaking; does well with books, dialogues and debates. Logical/Mathematical The student likes reasoning; likes to organise and interpret data; does well at mathematical and scientific problem solving. Spatial The student thinks in pictures or images; likes drawing and observing; does well at mind mapping, puzzles, and graphics. Musical/Rhythmic The student thinks rhythmically and in tunes; likes music and dance; often taps and hums. Bodily/Kinaesthetic The student thinks through sensations or feelings; likes sport, drama, movement, physical activity. Interpersonal The student thinks best by working with others; likes cooperative and group activities; is good at interactive, people-centred activities. Intrapersonal The student thinks best alone; likes individual, self-paced and managed activities; is reflective and quiet. Naturalistic The student creates an understanding and meaning through the world, excursions and research. Table 2: Gardner s multiple intelligences with corresponding learning styles Designing outcomes-based assessment tasks Bloom s taxonomy is a useful reference for designing assessment tasks that will help us ensure that students engage with the knowledge they have acquired at different levels, from lower order to higher-order thinking skills. Table 3 is a summary of how to phrase assessment tasks to elicit evidence of learning from students that demonstrates what they know and can do. Understand Apply Analyse Synthesis Evaluate Create Table 3: Bloom s taxonomy Interpreting, exemplifying, classifying, summarising, inferring, comparing, explaining Executing, implementing Differentiating, organising, attributing Collating, organising Checking, critiquing Generating, planning, producing Remember also that assessment tasks must: use appropriate assessment methods (e.g. writing an essay is not a sensible task to set for students if you want to assess their ability to demonstrate a practical skill, like wire a plug or stack a dishwashing machine correctly but an essay would be appropriate if you wanted to assess whether students can describe the function of money as a medium of exchange) provide sufficient evidence to assess the Learning Outcome you want to assess. In other words, the task should have the appropriate scope and breadth (e.g. if you want to assess a student s knowledge of how to clean a function room to the appropriate standard before and after use, the task cannot just state: Describe how you would clean a function room. ) have a realistic time allocation you can t spend more time assessing students than on teaching and learning challenge the students tasks that are too simple are a waste of everyone s time be aligned with the way in which you will record and report on the assessment you need to plan how you will record and report on an assessment task at the time of designing the task be planned in line with the criteria you will use to assess the task and the rubric you will use to make the assessment. viii

10 Designing outcomes-based assessment instruments Assessment instruments are the tools we use to assess evidence of learning in a given task. Assessment instruments include rubrics, observation grids, marking grids, checklists, rating scales, among others. In order for these tools to be meaningful, they must: be designed simultaneously with the assessment task, as stated above include a description of the criteria you will be looking for when you assess the task so that you can show how you arrived at your evaluation of a piece of work. (For example, the criteria for drawing up a CV could be used in a post-assessment discussion with a student to explain why you allocated a particular score: These are the elements a CV should include you forgot to give your contact details and the name of a referee. ) be used in conjunction with the criteria that you have selected. It is worth taking some time to prepare good assessment tools that will enable you to assess quickly and consistently. Tables 4 to 7 are examples of different assessment instruments. A checklist is a quick and efficient tool suitable for tasks in which the outcomes can be determined by simple yes/no responses. Table 4 is an example of a checklist used to assess students written work. The task involved visiting a public health space to observe whether the service might inadvertently be giving out the message that it is intended mainly for women by means of aspects such as the sex and age of the staff; the nature of the public health messages on display; the literature available; the general atmosphere; etc. Student s name: Date: Task 1.1: Observations on the inclusivity of public health spaces The paragraphs: Yes No display evidence of information obtained during the observation excursion include evidence of other, additional observations made reflect the student s own opinions include substantiations or support for own opinions draw own, thoughtful conclusions about the exclusivity or otherwise of the pubic health space observed indicate a basic understanding of how public messages position the viewer/reader Table 4: A checklist ix

11 An observation grid contains the names of a group (or all) of the students in the class with space for the lecturer to jot down observations about different students over a period of time. It is a useful tool to assess Critical Outcomes or specific skills. Skill: Works effectively with others as members of a team/group Date: Nombusa: Brian: Vusi: Jabu: Jane: Fatima: Reginald: Kumaran: Alan: Sally: Andries: Edith: Table 5: An observation grid A holistic rubric is used to assess a product of work as a whole, for example an essay-type question. Task: Community-based conservation has gone some but not all of the way in addressing the conflict between communities and nature conservation organisations. Discuss this statement with reference to any community-based conservation programme. [20 marks] Criteria: Formulates and expresses an informed opinion on community-based conservation as a model for the management of environmental conflict. Opinion to include: a) a clear statement of what the conflict is about [2 marks] b) an identification of the parties involved [2 marks] c) an identification of the factors causing the conflict [4 marks] d) an explanation of how the factors in (c) cause tension between the parties [5 marks] e) some reference to aspects such as perception, communication, tactics, etc. in relation to the conflict between the parties [4 marks] f) a conclusion [3 marks] Marks Level Table 6: A holistic rubric An analytic rubric is used to assess individual parts of a task, product of work, or performance. The score for each part is added together to obtain a total score. For example, let s say students are given the following Mathematical Literacy task: Design furniture for a house for six people. a) Sketch the floor plan to scale, indicating the bathroom and kitchen facilities within 24 m². [7 marks] b) Describe the furniture: consider the use of multi-purpose furniture and show the position of furniture. [5 marks] c) Work out the efficiency of use of space. [8 marks] x

12 Several steps are involved in this task, with a given score for each step. An analytic rubric for step c) could look like this: Criterion Level marks Determines the Presents no or efficacy of the minimal space design used data from the grid. Some attempt at calculation but no results. Level marks Presents a partial set of space used data. One or more efficacy values used but some errors occur. Level marks Presents an almost complete set of space used data. One or more efficacy values used but interpretation is unrealistic. Level marks Presents full set of data. One or more efficacy values used with realistic interpretation. Level marks Presents full set of efficacy values including vertical use of space, with extensive and accurate interpretation. Table 7: An analytic rubric Assessment and the National Certificate (Vocational) Assessment of learning for certification in the National Certificate (Vocational) will be done externally and internally. From Figure 2 you will see that the internal assessment marks for the vocational subjects and the fundamental subjects are weighted differently. The assessment marks for the four vocational subjects constitute 50% of the final assessment mark, and 25% of the final assessment mark for the three fundamental subjects. Figure 2: Weighting of internal and external assessment for the National Certificate (Vocational) xi

13 External assessment The external assessment at NQF Level 3 consists of written assessment components that are externally set and marked by the Department of Education, and externally moderated by Umalusi and/or an appropriate Education and Training Qualifications Authority (ETQA). External assessment will take the form of an annual examination, with the option of a supplementary exam for students who do not obtain the necessary credit in the annual examination. External assessment of the three fundamental subjects will constitute 75% of the student s total assessment mark. External assessment of the four vocational subjects will constitute 50% of the student s total assessment mark. Internal assessment The TVET college will be responsible for conducting the internal assessment. Internal assessment consists of two components a Portfolio of Evidence (PoE) and a practical component. The internal assessment mark for each of the four vocational subjects will make up 50% of the student s final assessment mark, while that for the three fundamental subjects will make up 25% of the student s final assessment mark. In line with the principles of outcomes-based education, internal assessment will take the form of continuous assessment and practical/performance site-based assessment. Practical assessment is the direct and systematic observation of a student s performance during activities that require the student to demonstrate specific skills, thereby displaying his or her ability to apply theoretical knowledge in a practical situation. Practical assessment therefore gives students the opportunity to show what they know by doing. Practical assessment tasks for each of the four vocational subjects could be conducted either in a work environment or a simulated work environment (site-based assessment). All practical assessment reflected in the Portfolio of Evidence will be subject to an external moderation process by Umalusi (or an appropriate ETQA) and should therefore be available for this purpose. The Portfolio of Evidence (PoE) As stated above, the Portfolio of Evidence is one of the components of internal assessment (the other being the practical component). The PoE is made up of the written and task-based assessments that have been collected throughout the college year for each individual student. The PoE is made up of a mark for each of the seven subjects and will combine a practical assessment component and a theory assessment component. As indicated above, the PoE mark for the three fundamental subjects will count towards 25% of the final assessment mark; the PoE mark for the four vocational subjects will make up 50% of the student s final assessment mark. xii

14 Figure 3: Portfolio of Evidence From Figure 3, you will see that the PoE is based on written; task-based; practical and performance site-based assessments. (Remember that all practical assessment tasks that form part of your internal (PoE) assessment of a student needs to be available for external moderation.) The design or format of the Portfolio of Evidence will depend on what works best in the different teaching and learning environments. It may be that your TVET college has developed a particular format for lecturers to use. If not, you may wish to collaborate with your colleagues to develop a Portfolio of Evidence based on the guidelines reflected in Figure 4. For your convenience, a model PoE for Economic Environment has been included as Annexure A at the end of this Lecturer s Guide. xiii

15 xiv

16 Figure 4: Possible design elements for a Portfolio of Evidence Recording and reporting Seven levels of competence have been described for each subject in the fundamental learning component (Table 8), and four levels of competence have been described for each subject in the vocational component (Table 9). The purpose of these descriptions is to help lecturers assess students and place them at the correct level of achievement. Rating code Rating Marks as % 7 Outstanding Meritorious Substantial Adequate Moderate Elementary Not achieved 0 29 Table 8: Scale of achievement for the fundamental subjects Rating code Rating Marks as % 5 Outstanding Highly competent Competent Not yet competent Not achieved 0-39 Table 9: Scale of achievement for the vocational subjects The scale of achievement forms an integral part of the assessment instrument used to collect evidence of learning. xv

17 The TVET FIRST series TVET FIRST is a new series of high-quality courses developed by Macmillan South Africa, Troupant and Guidelines to satisfy the teaching and learning requirements of the NQF Level 2 vocational programmes offered at TVET colleges around the country. Students will benefit from the careful consideration given to courses that: address language needs reading levels are age-appropriate and definitions are given of new or unfamiliar words and concepts, together with explanations of subject-specific terminology make explicit links between theory and practice features such as In the workplace and case studies help to place content within a working-world context promote cognitive development by means of features such as Think about it and Did you know? present well-researched content in a user-friendly design. TVET FIRST Economic Environment NQF Level 4 This NQF Level 4 course is the final year of study in a series developed for Economic Environment, as part of the Finance, Economics and Accounting vocational programme, made up as follows: - Compulsory subjects for the National Certificate Finance, Economics and Accounting Level 4: Economic Environment, Applied Accounting and Financial Management. - Optional subjects: New Venture Creation OR one subject from another Vocational programme presented by the TVET College. What is Economic Environment? The subject of Economic Environment introduces the students to the world of macro and micro economics. The South African economic system as well as international trade is covered and awareness created of the important aspects thereof. In addition, the students develop the skills of analysing, organising and critically evaluating information when assessing the dynamics at play in the South African economy and business environment. In this subject the role of Government in the South African economy is identified and explained. This will develop the students to be active citizens of South Africa and to make a contribution towards the prosperity of the country. Source: National Certificate Subject Guidelines Economic Environment NQF Level 4, Department of Education, September 2007 Why is Economic Environment important in the Finance, Economics and Accounting programme? Studying and gaining competence in this subject will enable the student to fulfil one of the pass requirements in the Finance, Economics and Accounting qualification. Studying and gaining competence in this subject will give the students a sound knowledge of economics and economic principles. This serves as a usable foundation for all role players involved in any organisation, regardless the degree of involvement (as an employee, owner etc). This subject also prepares the student for the world of work in general and for the execution of specific functions within a small business. In addition, the students will gain an understanding of broad economic principles as they apply to businesses in South Africa. Gaining skills and techniques in the economic environment of South Africa creates better employment or self-employment opportunities for the student at the end of the programme. It also allows the student to enter into higher education. Source: National Certificate Subject Guidelines Economic Environment NQF Level 4, Department of Education, September 2007 xvi

18 The link between the Economic Environment Learning Outcomes and the Critical and Developmental Outcomes In the subject Economic Environment the students develop the skill to identify and provide possible causes and solutions to problems by identifying events in the environment that could impact on a business sector/industry. Students also learn to understand and adapt to the social environment by the meaningful interpretation of economic information which they will come across in their future lives. Students can communicate effectively in presenting information from the news on events in the physical, economic and social environments that could impact on a business sector/industry. Students can demonstrate an understanding of the world as a set of related systems by recognising the impact that the different environments can have on a business sector/industry. Students can explore educational and career opportunities in researching the business sector/industry and current events. Source: National Certificate Subject Guidelines Economic Environment NQF Level 4, Department of Education, September 2007 Factors contributing to achieving the Economic Environment Learning Outcomes A student with an interest in the field of commerce or the business world will benefit by doing Economic Environment. This subject also gives students an insight into the economic environment within which enterprises functions. This enables the students to make economically founded decisions. In addition, students with developed specific characteristic disciplines such as creative thinking and analytical reasoning will enjoy the subject Economic Environment. As a subject it may also interest and benefit students who have already explored the field of being an entrepreneur by allowing them to learn the economic principles that are required to run an enterprise. Source: National Certificate Subject Guidelines Economic Environment NQF Level 4, Department of Education, September 2007 Topics dealt with in Economic Environment On completion of Economic Environment NQF Level 4 the student should have covered and reached competency in the topics listed below. Note also the weighted value of each topic for this subject. These weightings indicate the percentage of teaching time which should be spent on the topic. The total time allocated to Economic Environment is 200 teaching and learning hours per year. Not all of this time is to be spent in the classroom. TOPICS WEIGHTED VALUE Teaching and Learning hours 1. Macro economic principles as they apply to the South African business environment. 2. Basic economic concepts central to local economic development. 3. The environment of local economic development in South Africa. 4. Requirements of import and export factoring for discounting. TOTAL xvii

19 Learning programme for Economic Environment The table below lists the Subject Outcomes and the Learning Outcomes for all of the Topics in Economic Environment and the assessment activities relevant to each section within the Modules within the Topics. Topic 1: Macroeconomic principles as they apply to the South African business environment Subject Outcomes Learning Outcomes Sections/ Page reference Assessment activities Suggested time required Explain basic economic principles Module 1: Basic economic principles Introduction page 3 Explain the concepts of scarcity, choice, efficiency, use of marginal analysis and opportunity cost. Distinguish the concept of macro economics from that of micro economics. Identify the common errors in economic thinking and sources of disagreement amongst economists. Explain the concepts of supply and demand and the elasticity of supply and demand with the use of a graphical illustration. Identify the impact of different economic systems Explain the role of the economy in producing goods and services. 1.1: Concepts in economics page : Microeconomics versus macroeconomics page : Common errors in economic thinking page : The concept of supply and demand page : The impact of different economic systems page : The role of the economy i n producing goods and services page Activity 1.1 page 5 Answer questions based on an understanding of economic concepts Activity 1.2 page 6 Practical case study used to identify and interpret economic concepts Activity 1.4 page 9 Answer questions based on an understanding of economic concepts Activity 1.9 page 19 Answer questions based on an understanding of economic concepts Activity 1.13 page 26 Answer questions based on an understanding of economic concepts Activity 1.14 page 28 Debate used to evaluate understanding of the topic Possible class test questions: Activity 1.1, 1.3, 1.4, 1.5, 1.7, 1.10, 1.11 Module Assessment page hours xviii

20 Measure the macro economy Module 2: Measure the macro economy Introduction page 36 Describe the circular flow of the market economy. Explain and measure the concepts of Unemployment, Consumer Price Index, Producer Price Index and Inflation. Explain and measure the main constituents of Gross Domestic Product (consumer spending, government investment spending, exports, imports and savings). Explain the concepts of Gross Domestic Product (GDP), Gross National Product (GNP), Gross Domestic Expenditure, Gross Domestic Income, the Balance of Payments and Exchange Rates. Explain the performance of the South African economy in the last 20 years in terms of the above factors. Calculate the GDP and the GNP. 2.1: A circular flow model of a market economy page : Gross Domestic product page : Gross domestic expenditure page : Nominal versus real GDP page : Gross National Product page : Gross National income page : Unemployment page : Inflation page : Balance of payments page : Exchange rates page Activity 2.2 page 39 Use the circular flow to explain changes in the flow of income and spending and total production Activity 2.4 page 41 Do various calculations Activity 2.9 page 48 Use provided information to answer various questions regarding GDP Activity 2.11 page 55 Use provided information to answer various questions regarding balance of payment Possible class test questions: Activity 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.10, 2.11 Module Assessment page hours xix

21 Demonstrate an understanding of trends in the world economy. Range: Economic growth, full employment, price stability, balance of payments stability and equitable distribution of income. Describe the role of money in economy and monetary policy. Module 3: Trends in the world economy Introduction page 62 Understand the importance of major macro economic objectives Describe the nature and consequences of globalisation on the world economy. Describe the recent performance of the South African economy within the context of the performance of the world economy. 3.1: Macroeconomics objectives page : Globalisation page : South Africa and the world economy page : The economic divide page Activity 3.1 page 64 Answer questions based on an understanding of macro economic objectives Activity 3.4 page 67 Identify and interpret concepts in a real life case study Possible class test questions: Activity 3.1, 3.2 Module Assessment page 73 Module 4: Role of money and monetary policy Describe the Introduction functions of money. Range: Medium of page 75 exchange, store of value, unit of account. Describe the measures of money. Describe and explain the objectives, instruments and mechanics of monetary policy. 4.1: Functions of money page : Measures of money page : Monetary policy page : The aims of the monetary policies page : The aims of the mechanics and instruments of monetary policy page Activity 4.1 page 76 Answer questions based on an understanding of the functions of money Activity 4.3 page 80 Answer questions based on an understanding of monetary policy Possible class test questions: Activity 4.2, 4.3 Module Assessment page hours 14 hours xx

22 Describe the workings of fiscal policy Understand and define fiscal policy. Describe the difference between monetary and fiscal policy as well as their interdependence. Explain how fiscal policy is working in conjunction to meet the macro economic objectives. Explain the role the budget in the fiscal policy. Module 5: Fiscal policy Introduction page : Fiscal policy page : The budget page : Fiscal and monetary policy page : Fiscal policy and macroeconomics objectives page Activity 5.1 page 90 Answer questions based on an understanding of what fiscal policy is Activity 5.3 page 93 Answer questions based on an understanding of the differences and interdependence of monetary policy and fiscal policy Possible class test questions: Activity 5.3 Module Assessment page hours 5.5: The macroeconomic goals of fiscal policy page xxi

23 Topic 2: Basic economic concepts central to local economic development in South Africa Subject Outcomes Learning Outcomes Sections/ page reference Assessment activities Suggested time required Module 6: The interaction of supply and demand in the South African political Explain the interaction of supply and demand in the South African political economy Explain the concept of consumer demand with reference to the South African economy and population. Explain the concept of supply with reference to a range of parties, both government and non-government, in the South African economy. Explain the concept of a market in terms of the place where supply and demand meet economy Introduction page : Consumer demand/consumption spending page : Factors that influence consumption spending page : Supply page : Some reasons for market failure page : The market page Activity 6.3 page 109 Discussion and report regarding consumer demand and spending Activity 6.4 page 110 Written task explaining what public and private goods and services are Possible class test questions: Activity 6.2 Module Assessment page hours Identify the role of government in the South African economy Module 7: The role of government in the South African economy Explain the role of Introduction Activity 7.1 government in page 120 raising and page 118 Research activity spending taxes with regarding government reference to the spending South African economy Explain the role of government in setting fiscal and monetary policy with reference to the South African economy Compare/contrast the South African situation with that of other political economies. 7.1: The mixed economy of South Africa page : Government spending page : Government revenue page : The role of Activity 7.5 page 124 Discussion, note taking and presentation about fiscal, monetary and industrial and trade policies Activity 7.6 page 126 Discussion and note taking comparing South Africa with other political economies 7 hours xxii

24 government in policy making page Module Assessment page : South Africa compared to other countries page Module 8: The nature of development economics with specific reference to South Africa Identify and explain the nature of development economics with specific reference to South Africa Define development economics as a separate field within the economics discipline Compare the development economics with traditional economics and political economics Discuss a range of issues in development economics with reference to the local economic development environment in South Africa Introduction page : Development economics page : Human Development Index page : Traditional economics and political economics page : Development issues in South Africa page : Sustainable development in South Africa page : Structural changes to the economy page 137 Activity 8.2 page 132 Discussion regarding human development within developmental economics Activity 8.3 page 134 Answer questions and write a paragraph concerning traditional economy in terms of developmental economics Activity 8.4 page 135 Peer assessed written essay about economic development in South Africa. Module Assessment page hours xxiii

25 Module 9: Presentation to illustrate the key economic concepts central to local economic development Identify a range of Introduction Activity 9.2 key economic page hours concepts in the page 140 Discussion and note taking local economic regarding the key concepts development of economic development environment Illustrate the key concepts central to local economic development in the form of a presentation with examples from own work context Discuss these key concepts and motivate them in your own work environment Prepare and deliver a presentation on the key concepts 9.1: The object of sustainable development page : Identifying the key concepts central to local economic development page The key components in the work of home environments. page : Preparing a presentation page 143 Activity 9.3 page 143 Presentation of a topic of chose regarding economic development xxiv

26 Topic 3 The environment of local economic development in South Africa Subject Outcomes Learning Outcomes Sections/ Page reference Assessment activities Define and explain the purpose of local economic development in South Africa Module 10: The purpose of local economic development in South Africa Define the nature of the growth and development sought in local terms List the resources available with reference to a specific location Introduction page : The nature of the growth and development sought page Activity 10.2 page 152 Research and list resources available in locations around South Africa Module Assessment page 155 Suggested time required 8 hours Discuss the beneficiaries and the benefits anticipated n the current sociopolitical and economic context 10.2: Resources available within a specific location page : The beneficiaries and the benefits anticipated page Identify and describe legislation that impacts on local economic development Module 11: Legislation that impacts on local economic development List the legislation Introduction applicable to local economic page 157 development Summarise the key principles of local economic development in the form of a presentation 11.1: The legislation applicable to local economic development page 157 Activity 11.2 page 161 Research and presentation regarding the principles of local economic development Module Assessment page hours Discuss the application of legislation in terms of local economic development in South Africa Discuss the effects of legislation on local economic development practice in own work context 11.2: T he key principles of local economic development page : The application of legislation in terms of local economic development in South Africa page xxv

27 Explain the current challenges for local economic development 11.4: The effects of legislation on local economic development practice page Module 12: The current challenges for local economic development Identify and discuss Introduction Activity 12.1 the changing needs page 169 in the local page 166 Pair work regarding economic informal and formal development economic activities context Identify and discuss the challenges in terms of how they impact on local economic development functions Discuss methods for addressing challenges in own work context 12.1: The changing needs in the local economic development context page : How challenges have an impact on local economic development functions page : Methods for addressing challenges page Module Assessment page hours xxvi

28 Explain the role of municipalities in local economic development. Module 13: The role of municipalities in local economic development Identify legislation which defines the responsibilities of municipalities in local economic development. List and explain municipal functions in terms of their possible contributions to local economic development. Identify and discuss municipal processes in terms of their necessary interactions with local economic development functions. Introduction page : Legislation which defines the responsibilities of municipalities in local economic development. page : Municipal functions page : Municipal processes page Activity 13.1 page 175 Case study to indicate municipal responsibilities and functions Module Assessment page hours xxvii

29 Subject Outcomes Demonstrate knowledge and understanding of international trade. Topic 4: Requirements of import and export factoring for discounting Learning Outcomes Sections/ Assessment Page reference activities Understand and explain the nature and structure of international trade transactions for importing and exporting goods according to generally accepted business practice. Explain the internationally accepted procedures for conducting import transactions according to accepted international business protocol. Explain the internationally accepted procedures for conducting export transactions according to accepted international business protocol. Specify the general risks associated with international trade transactions according to generally accepted business practice and in line with the financier s policy and procedure. Specify the specific risks associated with fluctuations in foreign exchange according to generally accepted business practice and in line with the financier s policy and procedure. Identify the nature and type of insurance that can be obtained to manage the risk associated with international finance according to generally accepted business practice and specify the general risks associated with international trade Module 14: International trade Introduction page : The nature and structure of international trade transactions for importing and exporting goods page : The internationally accepted procedures for conducting import transactions page : The internationally accepted procedures for conducting export transactions page : The general risks associated with international trade transactions page : The specific risks associated with fluctuations in foreign exchange page : Insurance page : Shipping terms page xxviii Activity 14.1 page 188 Case study and research to indicate understanding of concepts Activity 14.2 page 191 Case study used to indicate understating of risks Activity 14.4 page 194 Research regarding foreign currency Module Assessment page 201 Suggested time required 14 hours

30 Demonstrate a knowledge and understanding of basic international finance. transactions according to generally accepted business practice in line with the financier s policy and procedure. Understand and explain the meaning of different shipping terms according to accepted international business protocol. List and explain the different types of financial instruments associated with international trade according to generally accepted international business. Understand and explain the concepts of banks and country risk according to international banking and factoring practice. Module 15: Basic International Finance Introduction page : Financial instruments associated with international trade page : The concepts of banks and country risk page Activity 15.2 page 214 Foreign currency calculations Module Assessment page hours Explain the concept of exchange rate risk in international trade finance with examples. Interpret and explain five reported exchange rates include their meaning according to the value of the currencies in relation to each other. Convert five currencies to rand according to the daily reported exchange rate. Convert rand into five currencies according to the daily reported exchange rate. Specify the standard financial products and services for minimising exchange rate risk according to accepted business and banking practice. 15.3: The concept of exchange rate risk page : Interpret and explain exchange rates page : Convert currencies to Rand page : Convert Rand to currencies page : The standard financial products and services for minimising exchange rate risk page 215 Range: Financial Instruments include bills xxix

31 of exchange, promissory notes, drafts, telegraphic transfers, international loans, guarantees, and letters of credit. Evidence of competence across the entire range is required. Compare import/export factoring with letter of credit Module 16: Compare import/export factoring with Letter of credit Compare the process and procedures for establishing a letter of credit to those associated with import/export factoring according to accepted international banking and factoring practice. Compare the parties in establishing a letter of credit to those associated with import/export factoring according to accepted international banking and factoring practice. Introduction page : Letters of Credit and Factoring goods page : The parties involved page : The rights and responsibilities of the parties page Activity 16.1 page 218 Case study explaining information included on a pro forma invoice Module Assessment page hours Compare the rights and responsibilities of the parties to a letter of credit to those associated with import/export factoring according to international banking and factoring practice. Compare the basic costs of the two modes of finance according to local banking and factoring practice. Compare the basic risks to the client of the two modes of finance according to accepted international business practice. Compare the basic risks to the agent/financier of providing the two modes of finance according to accepted banking and factoring practice. Compare the financier s/agent s recourse in the event of 16.4: The basic costs of the two modes of finance page : The basic risks to the client of the two modes of finance page : The basic risks to the agent/financier of providing the two modes of finance page : The financier s/agent s recourse in the event of default on the agreed payment and terms page : The conditions that would indicate which form of finance would be more appropriate page xxx

32 Demonstrate knowledge and understanding of the process of initiating import/export factoring default on the agreed payment and terms according to accepted banking and factoring practice. Specify the conditions that would indicate which form of finance would be more appropriate according to accepted banking and factoring practice. Module 17: The process of initiating import/export factoring Explain the process and procedure regarding how an import/export factoring transaction would take place according to accepted international practice and the financier s factoring policy and procedure. Explain the nature of relationships and rules of co-operation between local and international factoring houses according to accepted international practice and the financier s factoring policy and procedure. Introduction page : The process and procedure regarding how an import/export factoring transaction would take place page : The nature of relationships and rules of co-operation between local and international factoring houses page 234 Activity 17.1 page 235 Fun group work about factoring in South Africa Module Assessment page hours Specify the general legal and statutory requirements for an importer according to the current local legislation. Specify the general legal and statutory requirements for an exporter according to the current local legislation. Explain the process, procedure and requirements to collect money due from a local buyer for an invoice factored by a foreign exporter according to the company s factoring policy and procedure. Explain the process, procedure and requirements for a local 17.3: The general legal and statutory requirements for an importer page : The general legal and statutory requirements for an exporter page : Collecting money due from a local buyer page : Factoring invoices for goods sold to a foreign buyer page xxxi

33 exporter wishing to factor invoices for goods sold to a foreign buyer according to the company s factoring policy and procedure. Module 18: Risk management principles associated with import/export factoring Describe risk management principles associated with import/export factoring. List the risk management principles associated with import/export factoring from the client s perspective according to the financier s factoring policy and practice. List the risk management principles associated with import/export factoring from the financier s perspective. according to the company s factoring policy and practice List and explain the approaches to management of the key risks associated with export factoring in line with the financier s factoring policy and practice. Introduction page : The risk management principles associated with import/export factoring page : The approaches to management of the key risks associated with export page : The approaches to management of the key risks associated with import factoring page Activity 18.1 page 241 Case study to examine risks and how they are managed Module Assessment page hours List and explain the approaches to management of the key risks associated with import factoring in line with the financier s factoring policy and practice. List and explain the details of specific risk management practices according to the financier s factoring policy and procedure. Explain the implications of the risk management practices for the administration of import factoring in line with factoring policy and practice. 18.4: The details of specific risk management practices page : The implications of the risk management practices for the administration of import factoring page : The implications of the risk management practices for the administration of export factoring page Explain the implications of the risk management practices for the administration of export xxxii

34 factoring in line with factoring policy and practice. xxxiii

35 Resources needed for teaching Economic Environment NQF Level 4 Physical Resources The following teaching aids should be made available, if possible: Practicum room: A simulated office environment, provided with the basic office furniture and equipment. Necessary electronic equipment, e.g. adding machine, cash register, calculators, filing cabinet, computer, printer The latest development in electronic equipment must be available The computer must be provided with internet connection to enable the facilitator to demonstrate website browsing for research purposes. Media centre: Availability of computers and printers for students to complete assignments/case studies and do research Access to internet for students Research software, e.g. Encarta, etc Subject related magazines (e.g. Finance & Technique, etc.), daily newspapers and subject related reference books for research by students Subject related DVD s/videos List of stakeholders prepared to be involved in the learning process through presentations or acting as guest speakers or providing the opportunity for students to gain practical experience. Applicable legislation / Acts for use by lecturers during lessons and students for research purposes Stock room to store video/dvd machines, televisions, etc Security for stock room, media centre and practicum room. Class room: Computer and data projector or latest technology to electronically project data for students, must be available for facilitator Flash disk for facilitator to store information Presentation program on computer to be used by facilitator to provide students with visual information on learning outcomes. White board, black board and pull down screen Desks for students big enough to work on. Students are going to use many resources e.g. newspapers, documents, etc to work from. xxxiv

36 Human Resources Lecturer / facilitator: Applicable subject related qualification on NQF Level 5 It will be to the advantage of facilitators/lecturers if they are already declared competent as assessors and/or moderators Training in OBE Full time media centre manager (with knowledge of computers, website browsing, research and reference books) Other Resources Text Books Answer books, with examples which students must complete for practical assignments Calculator for each student. Lever arch file for each student to serve as portfolio of evidence Lever arch file for Practical Assessment Portfolio. Subscription fees for internet, subject related magazines, newspapers xxxv

37 Topic 1 Macro economic principles as they apply to the South African business environment Module 1: Basic economic principles Module Overview Subject outcome Explain basic economic principles Assessment standards The concepts of scarcity, choice, efficiency, use of marginal analysis and opportunity cost are correctly explained. Learning outcomes Explain the concepts of scarcity, choice, efficiency, use of marginal analysis and opportunity cost. Assessment activities Activity 1.1 page 5 Answer questions based on an understanding of economic concepts The concept of macro economics is distinguished from that of micro economics. The common errors in economic thinking and sources of disagreement amongst economists are identified. The concepts of supply and demand and elasticity of demand and supply are explained with the use of graphical illustration. The impact of different economic systems. The role of the economy in producing goods and services is explained. Distinguish the concept of macro economics from that of micro economics. Identify the common errors in economic thinking and sources of disagreement amongst economists. Explain the concepts of supply and demand and the elasticity of supply and demand with the use of a graphical illustration. Identify the impact of different economic systems Explain the role of the economy in producing goods and services. Activity 1.2 page 6 Practical case study used to identify and interpret economic concepts Activity 1.4 page 9 Answer questions based on an understanding of economic concepts Activity 1.9 page 19 Answer questions based on an understanding of economic concepts Activity 1.13 page 26 Answer questions based on an understanding of economic concepts Activity 1.14 page 28 Debate used to evaluate understanding of the topic Possible class test questions: Activity 1.1, 1.3, 1.4, 1.5, 1.7, 1.10, 1.11 Module Assessment page 33 1

38 Background information In this module you will learn about basic economic principles that are used by economists when they discuss or explain economic issues. For example you will learn about the concepts of scarcity, choice, efficiency and opportunity costs as they pertain to economics. You will also be introduced to marginal analysis. The difference between micro- and macro economics will be briefly explained, and you will be introduced to some common errors in economic thinking. This is followed by an explanation of the laws of demand and supply as well as the elasticity of demand and supply. You will then also look at the impact of different economic systems, specifically the market economy, the command economy and the mixed economy. Lastly you will be looking at the role supply factors play in producing goods and services in the economy. Activity 1.1 page 5 Suggested answers: 1. a) True (see section 1.1) b) False (see section 1.1) c) True (see section 1.1) d) True (see section 1.1) 2. Renewable resources are those resources which are able to renew themselves. 3. See the relevant sections as listed above. Activity 1.2 page 6 Suggested answers: Students need to understand the principle of opportunity cost. A person cannot run two businesses oneself at the same time. One has to give up one to do the other. The one you give up is the opportunity cost of the one you decide to do. Activity 1.3 page 8 Suggested answers: Students first complete the table as follows: Ice creams consumed Marginal utility in utils Total utility in utils

39 Now with the assumption that the marginal disutility of ice-cream number 4 is -37, the table will look as follows: Ice creams consumed Marginal utility in utils Total utility in utils In other words the total utility decreases when the marginal utility becomes negative. Activity 1.4 page 9 Suggested answers: 1 a) True b) True c) True d) True e) True 2. The study of the price and quantity of cold drinks is a micro economic issue because one is studying a specific product. Total output and the general price level on the other hand refer to the economy as a whole and are therefore macro economic issues. Activity 1.5 page 13 Suggested answers: 1. a) True. b) False. Economics is a social science and it is not possible to repeat experiments in order to determine the impact of one variable on another. c) True. d) False. If the inflation rate falls from 8% to 5% it means that prices are still rising. It now rises at 5% instead of 8%. e) False. Things might be correlated without there being causation. f) False. Economists use different economic models and therefore disagree on how to analyse economic problems. 2. For some economists the solution is to decrease wages, others argue that it requires an increase in the demand for goods which increases the demand for labour while a third group argues that it is due to a lack of skills and therefore they emphasise education and training. Activity 1.6 page 14 Suggested answers: 1. An increase in the price of fried chicken pieces will cause the Dlamini household to demand a lower quantity since it is now less affordable for the family. 2. A decrease in the price of fried chicken pieces will cause the Dlamini household to demand a higher quantity since it is now more affordable for the family. 3

40 Activity 1.7 page 15 Suggested answers: The missing words are: (i) same (ii) decrease (iii) increase (iv) negative (v) inverse Activity 1.8 page 17 Suggested answers: 1. The demand curve should look like this: 4

41 2. a) It is downward sloping. b) c) 5

42 d) There is a downward movement along the demand curve. e) It is more affordable. f) There is an upward movement. g) It is less affordable. Activity 1.9 page 19 Suggested answers: The missing words are: (i) same (ii) increase (iii) decrease (iv) positive 6