Adele

Adele

QUESTIONS

TEST ONE

Marks: 70
QUESTION 1

Match each description in Column B with the term in Column A. Write down only the letter of the correct answer next to the question number.

COLUMN A 

COLUMN B 

1.1 

SAT 

a travel trade show 

1.2 

FEDHASA 

type of unforeseen occurrence 

1.3 

FTTSA 

Federated Hospitality Association of SA 

1.4 

WWW 

South African Tourism 

1.5 

ASATA 

Fair Trade in Tourism South Africa 

1.6 

WWF 

World Health Organisation 

1.7 

DST 

Association of South African Travel Agents 

1.8 

GMT 

Daylight saving time 

1.9 

Indaba 

Universal Time, Co-ordinated 

1.10 

UTC 

World Wild Fund for Nature 

1.11 

visa 

Global Distribution System 

1.12 

WHO 

Greenwich Mean Time 

1.13 

tsunami 

International Air Transport 

1.14 

BCEA 

World Wide Web 

1.15 

code of conduct 

Basic Conditions of Employment Act 

   

Travel document 

   

Set of rules 

[15]
QUESTION 2
Find the correct term for each of the descriptions listed below. The answers can be found in the table of letters. Answers can be vertical, horizontal or diagonal from top to bottom or backwards.
Example: A person who likes to travel for longer than twenty-four hours is known as a tourist.
focus 1 jygad

 2.1 The monetary unit used by tourists visiting France (1)
2.2 World time is measured from this place (1)
2.3 Physical condition caused by crossing time zones during a flight (1)
2.4 Natural disaster in December 2004 (1)
2.5 Telegraphic transfer system of money from one country to another (1) [5]

QUESTION 3
Read the following headlines and then answer the questions that follow.
focus 3 jaygd
3.1 How do unforeseen occurrences like these affect a country's social and economic arenas? Give FIVE examples. (5)
3.2 Can crime be regarded as an unforeseen occurrence of this type? Give a reason for your answer. (2)
3.3 Predict what influence an increase in crime would have on existing and potential tourism in South Africa. (3) [10]

QUESTION 4
Read the following extract carefully and answer the questions that follow.

“ATTACKS WON'T HARM TOURISM”

The head of Egypt's main hotel group sought on Sunday to play down the impact of attacks by Islamist militants on his country's vital tourism industry, saying they were "isolated incidents" perpetrated by "isolated people."

01/05/2005 21:28 - (SA) 

4.1 Explain what type of crisis happened in Egypt. Give a reason for your answer. (2)
4.2 Explain what is the meant by "isolated incidents". (2)
4.3 Discuss why the tourism industry is vital for a country. (2)
4.4 Discuss the major impact of a political situation on a country. Give FOUR points. (4)  [10]

QUESTION 5
Read the information, background and instructions very carefully before answering the questions that follow.

Background
A young couple from England are visiting Durban for a vacation. They will arrive on Tuesday evening and will leave on Monday morning. For calculation purposes, they will be in Durban for six days.
During their stay in Durban they want to visit a cultural city. A game reserve tour is definitely part of their itinerary as well as a mountain splendour tour. They also want to go on a city tour. They plan to spend one afternoon buying souvenirs. For Saturday evening they have bought tickets for a live concert, and on Sunday evening they will spend time with friends. UShaka Marine World is a must!
The couple will take advantage of the Holiday Inn’s “Rack Rates” special tariffs and they will stay in the Elangeni Holiday Inn. They will hire their car from Hertz. They will get the car on Tuesday and bring it back on Monday morning. The car hire will cost them R 2 330,00
They are budgeting R200,00 each per day for meals, R200,00 each per day for extra entertainment and R500,00 each per day for shopping. 
 rack rates

Note: Rates quoted are “per persons per night” - subject to top availability. Exclude 1% levy.
best selling
Plan a tour and budget for the couple by answering the questions below and using the information provided. Wherever possible show all your calculations.
5.1 During the six days they will travel 750 km around Durban. What would their fuel cost be if their car runs on 10 km/litre and petrol costs R3,90 per litre? (2)
5.2 What will the hotel cost per person per night? (1)
5.3 Explain the phrase “Minimum 2 pax”. (1)
5.4 What will the levy be for a one-night stay at Elangeni Holiday Inn? (2)
5.5 Fill in the missing labels (a) to (j) to show what they will be doing or where they will be going during the week. Write the correct answer next to the appropriate letter.

DAY 

AM 

PM 

PPM 

Tuesday 

Arrive in Durban 

Wednesday 

(a) 

Leisure time 

Romantic dinner 

Thursday 

(b) 

(c) 

Leisure time 

Friday 

(d) 

(e) 

Leisure time 

Saturday 

(f) 

(g) 

(h) 

Sunday 

Leisure time 

(i) 

(j) 

Monday 

Depart from Durban 

(8)
5.6 Copy the table below into your answer book to compile a travel budget for the tourists. (Show all your calculations.)

Accommodation 

Travelling expenses 

Tours 

Entertainment 

Shopping & gifts 

Meals 

Total 

R23 555,12 

(12)
5.7 What will the couple pay for the week in British pound for the tour if one British pound equals R10,38? (2)
5.8 What FOUR travel documents will they need for their visit to South Africa? (2) [30]
[TOTAL: 70 marks]

TEST TWO

Marks: 70
QUESTION 1

1.1 Differences exist in working environments and working conditions. Discuss examples of the different working environments and conditions found in the tourism industry. (3)
1.2 Name FOUR ways in which people can develop their careers in the tourism industry. (4)
1.3 Briefly explain what a code of conduct is. Express your opinion on the importance of a code of conduct in the workplace environment. (3) [10]

QUESTION 2
Read the following case study carefully and answer the questions that follow.

UNESCO is a body established within the United Nations Organisation. Its main aims are to recognise places throughout the world that are rich in heritage and to protect and preserve them for future generations.
When UNESCO proclaims a World Heritage site there are positive consequences for the tourist industry in the area as it attracts more visitors to the site.
What makes the concept of World Heritage exceptional is its universal application. World Heritage sites belong to all the people of the world, irrespective of where they are located. Heritage is our legacy from the past, what we live with today, and what we pass on to future generations. 

2.1 Explain the main aims of UNESCO. (2)
2.2 Give FOUR examples of the advantages of having a World Heritage site in a country. (8)
2.3 Define the following concepts:

  1. Heritage (3)
  2. Diversity (3)

2.4 There are 788 World Heritage sites across the globe; six of the sites are in South Africa. Indicate, for each of the following World Heritage sites, the province in which the site is located in South Africa.

  1. Cape Floral Region
  2. Robben Island
  3. iSimangaliso Wetland Park
  4. uKhuhlamba Drakensberg Park
  5. Cradle of Humankind (5)

2.5 Differentiate between “inbound tourism” and “domestic tourism”. (4)
2.6 Specific criteria must be met for a place to be declared a World Heritage Site. List THREE criteria for a cultural site and TWO criteria for a natural site. (5) [30]

QUESTION 3
Answer the following questions regarding responsible tourism.
3.1 Define each of the following terms in a short sentence:

  1. Responsible tourism (1)
  2. Conservation (1)
  3. Indigenous (1)

3.2 Give TWO examples of irresponsible practices in tourism. (2)
3.3 Briefly describe FIVE feature that would benefit responsible tourism? (5)
3.4 Explain what is meant by responsible tourism for the following components:

  1. Environmental components (3)
  2. Social components (3)
  3. Economic components (2)
  4. Development of infrastructure (2) [20]

QUESTION 4
4.1 What is the currency (money used in the country) of each of the following countries:

  1. Namibia
  2. Japan
  3. France (3)

4.2 Advise a tourist on how and where she can exchange money. (3)
4.3 Explain how a tourist visiting South Africa with US dollars would use the electronic board below, if they want to buy rand and sell rand. (2)
The following table represents an electronic board in South Africa showing buying and selling exchange rates:

Currency 

Buy 

Sell 

GBP 

11,51 

11,55 

USD 

5,71 

5,73 

4.4 Look at the exchange rates in the table and answer the questions:

  1. When Tommy arrives in Johannesburg, he wants to change £850 to rand. How many rand does he get? (1)
  2. When Tommy leaves Johannesburg, he wants to change R400 back to pounds sterling. How many pounds does he get? (1)[10]
    [TOTAL: 70 marks]

TEST THREE

Marks: 70
QUESTION 1

Various possible answers are provided for each of the following questions. Write the letter only of the correct answer next to the corresponding number.
1.1 A computerised banking system which exchanges one monetary unit for another monetary unit against the current rate is known as:

  1. Internet banking
  2. GDS banking
  3.  ATM banking
  4. SWIFT system (1)

1.2 The monetary unit used in London is:

  1. Euro
  2. British pound
  3. English dollar
  4. Yen (1)

1.3 Identify the monetary unit used by tourists visiting the Eiffel tower:

  1. Euro
  2. Franc
  3. Dollar (US $)
  4. British pound (1)

1.4 South Africa's prime travel and tourism show organised by a magazine is known as:

  1. Rand Easter Show
  2. Indaba
  3. GSA Show
  4. Getaway Show (1)

1.5 UNESCO is also known as the …

  1. World Heritage Centre
  2. United Nations Educational, Scientific and Cultural Organisation
  3. Integrated Nature-based Tourism Management Development Project
  4. United Nations International Children’s Emergency Fund (1)

1.6 Which alternative does not fit? You can save the earth by …

  1. supporting conservation organisations.
  2. encouraging the tourism industry to make use of environment friendly practices.
  3. preserving species and their habitats.
  4. buying ivory in order to help poachers earn an income. (1) [6]

QUESTION 2
Decide whether the following statements are TRUE or FALSE. Write down only TRUE or FALSE next to the relevant question.
2.1 A SWIFT transfer is a transfer of money directly into someone’s bank account in another country. (1)
2.2 The monetary unit used in Tokyo, Japan is called the yen. (1)
2.3 Proudly South African is a campaign which promotes South African sport achievers. (1)
2.4 Getaway Road Show is the biggest tourism show in southern Africa displaying tourism products. (1) [4]

QUESTION 3
Match the acronym in COLUMN A with the correct description in COLUMN B. Write only the letter of the correct answer next to the question number.

COLUMN A 

COLUMN B 

3.1 

FTTSA 

Tourism Business Council of South Africa 

3.2 

BCEA 

Basic Conditions of Employment Act 

3.3 

ITB 

World Travel Market 

3.4 

WTM 

Fair Trade in Tourism South Africa 

3.5 

TBCSA 

International Tourism Arts And Culture Project 

   

Internationale Tourismus-Börse 

[5]

QUESTION 4
Tourism organisations that provide poor customer service are likely to suffer from, for example, a decrease in sales and lack of customer loyalty. Name FIVE other elements of poor customer service. [10]

QUESTION 5
Study the Proudly South African logo and the advertisements shown below.
beers jafda
5.1 The aim of the Proudly South African campaign is to help create jobs and encourage economic growth in our country. Who or what does the Proudly South African campaign promote? (2)
5.2 Who is the target market of each advertisement? Give a reason for your answer. (6)
5.3 To what extent are the services and/or experiences offered in the advertisements unique to South Africa? (3)
5.4 Name FOUR ways in which you would promote these services and/or experiences to the international tourist market. (4) [15]

QUESTION 6
The management of Rail Trail, a passenger train business, has decided to improve their service to customers. They want to make sure they meet their clients’ needs. They decide to do a customer satisfaction survey on the Internet. Below is an extract from their survey. Use the extract to answer the questions that follows.

Customer Satisfaction Survey

1 Are you aware of the sitter class that we offer?  Yes No
 2

Do we satisfy your travel needs? 

Yes 

No 

 3

Are you satisfied with the bedding provided on our trains? 

Yes 

No 

 4

Do you travel frequently with any type of transport? 

Yes 

No 

 5

Are you aware of Rail Trail trains? 

Yes 

No 

 6

Do you travel frequently with a long distance train? 

Yes 

No 

 7

Are you satisfied with the toilet facilities on our trains? 

Yes 

No 

 8

Do you usually travel in the sitter class? 

Yes 

No 

 9

Are you satisfied with assistance by our staff? 

Yes 

No 

 10

Are you aware of the sleeper class that we offer? 

Yes 

No 

 11

Do you usually travel in the sleeper class? 

Yes 

No 

 12

Are you from outside of South Africa? 

Yes 

No 

13 

Do you travel long distance in South Africa for business  purposes? 

Yes 

No 

 14

Do you enjoy travelling with Rail Trail? 

Yes 

No 

15 

Are you aware of the First Class option between Pretoria and  Cape Town? 

Yes 

No 

 16

Have you travelled with the First Class? 

Yes 

No 

 17

Do you feel safe on our long distance trains? 

Yes 

No 

6.1 Why is it so important for a business that provides a service to tourists to get regular feedback from tourists? (2)
6.2 If a tourist answered no to questions 7, 9 and 17 of the satisfaction survey of Rail Trail, what services could they improve? (3)
6.3 Will a business traveller make use of long distance train travel in South Africa for business purposes? Give reasons for your answer. (3)
6.4 As the customer care manager you must draw up a code of conduct for the employees of Rail Trail to better the service of the company. Draw up a FOUR-point code of conduct. (12) [20]

QUESTION 7
7.1 Explain why good customer service is important for tourism businesses. (4)
7.2 Name and give a short description of THREE ways in which a company can get feedback from customers on their customer service. (6) [10]
[TOTAL: 70 marks]

TEST FOUR

Marks: 70
QUESTION 1

Various possible answers are provided for each of the following questions. Write the letter only of the correct answer next to the corresponding number.
1.1 The current grading system for accommodation of SAT is known as the:

  1. Tourism Grading Council of South Africa (TGCSA)
  2. National Grading and Classification Scheme (NGCS)
  3. South African Tourism Services Association (SATSA)
  4. Indaba (1)

1.2 The tourist association that tour guides must register with, and sign a code of conduct, is known as:

  1. Tourism Grading Council of South Africa (TGCSA)
  2. Regional Tourism Organisation of South Africa (RETOSA)
  3.  South Africa Tourism Services Association (SATSA)
  4. South Africa Tourism Association (SATA) (1)

1.3 Identify the National Department of Tourism guideline that tourism organisations do NOT have to follow to become responsible and sustainable:

  1. apply the Responsible Tourism Guidelines
  2. follow practical steps provided in the Responsible Tourism Handbook
  3. follow the South African National Road Safety Campaign
  4. use responsible tourism as part of their marketing strategy (1)

1.4 What organisation promotes sustainable tourism development?

  1. Environmental Protection Strategy
  2. Fair Trade in Tourism South Africa
  3. Stormsriver Adventures
  4. Imvelo (1)

1.5 The SA Travel and Tourism Industry Conference and the Indaba are initiatives organised by South African Tourism to promote:

  1. marketing of South African tourism
  2. outbound travel
  3. sustainable tourism
  4. safety and security (1) [5]

QUESTION 2
Match the concept in COLUMN A with the correct description in COLUMN B. Write the letter of your choice next to the question number.

COLUMN A 

COLUMN B 

2.1 

Multiplier effect 

Refuse to deal with a person, group, nation or group of  nations to show disapproval 

2.2 

Universal Access 

A tourism product that allows people to buy a period of  time at a resort or hotel at the same time each year 

2.3 

Shift work 

The total value of the goods and services produced in a  country in a year 

2.4 

Regulatory organisation 

Set of rules to guide behaviour and decisions 

2.5 

Repeat business 

Takes place when a customer chooses to return to the  same business for products and services 

2.6 

SETA 

The quality of being able to touch and hold something 

2.7 

Service standards 

Organisation that makes rules to ensure that standards  are met in the industry 

2.8 

Prohibited goods 

Occurs when the body doesn't have enough water in it 

2.9 

Employment equity 

An increase in tourist numbers can also lead to growth in  the economy outside the tourist industry 

2.10 

Consumer loyalty 

Places, buildings, products or services that can be used  by both able-bodied and disabled people 

2.11 

Code of conduct 

A policy or a programme providing advantages for people  of a group, who have previously been discriminated  against, with the aim of creating a more fair society 

2.12 

Timeshare 

Standards that a business must maintain to make sure  that it is successful 

2.13 

Tangible 

Goods that are not allowed into a country 

2.14 

Gross domestic product 

A person's time, effort or work rather than a physical  product 

2.15 

Boycott 

Sector Education and Training Authority 

   

This is the same as customer loyalty 

   

An employment practice designed to make use of the 24  hours of the day 

[15]

QUESTION 3
Write the following in full.
3.1 SCHSA (2)
3.2 TBCSA (2)
3.3 TOMSA (2)
3.4 SATSA (2)
3.5 EFT (2) [10]

QUESTION 4
Read the following advertisement carefully and answer the questions that follow.

GROUP RESERVATIONS MANAGER
for 5-star Hotel and Resort

Responsible for:

  • The managing and controlling of the Group Reservations Department and its staff members
  • To ensure that all duties are performed correctly and timeously 
  • To ensure that Group Inventory is accurately recorded into the CRS & PMS systems

Education, experience and competencies required:

  • Matric
  • Diploma / certificate in Hotel Studies
  • 3 years’ experience in a similar position
  • 2 years reception experience in a 5-star environment
  • Central Reservations experience is an advantage
  • Guest relations skills
  • Computer skills essential – MS Office, Fidelio & CRS
  • A dedicated worker with excellent communication skills
  • Good organisational and leadership skills
  • Ability to work under pressure

Job description:

  • To plan and expedite the daily running of the Group Department
  • To handle all guest complaints according to the company’s standards and to notify the relevant management
  • To ensure that the highest possible rate is sold as well as highest capacity
  • To monitor property status and be aware of any over-bookings
  • To ensure computer accounts are up to date and balanced
  • To hold monthly and weekly meetings/briefings with relevant departments


4.1 List FOUR criteria that must be included in an employment contract. (4)
4.2 Explain how it could impact on an employee’s loyalty to be treated unfairly in terms of payment from the company. (2)
4.3 Compile a FOUR-point code of conduct for the position advertised. (4) [10]

QUESTION 5
Ms Adams, a businesswoman from Los Angeles in the United States, visited Beijing in China, which is in the same time zone as Hong Kong, for a five-day business conference. Answer the following questions about her trip, using the time zone map given on the next page where necessary.
5.1 Explain to Ms Adams why it is important for her to consider the following information before her trip:

  1. health precautions
  2. safety
  3. travel insurance (6)

5.2 Ms Adams’ flight from Los Angeles departed on Monday 1 July at 19:00. The flying time from Los Angeles to Beijing was 12 hours. Calculate the time and day the flight arrived in Beijing. Ignore DST. Explain ALL your calculations. (4)
5.3 Upon her arrival in Beijing, Ms Adams suffered from jet lag. Besides being tired, name TWO other symptoms she experienced. (2)
5.4 During the conference, she urgently needed documentation to be faxed to her from her office in Los Angeles. She placed a call to her office at 14:00 Beijing time.

  1. Calculate the time and day (previous day/same day/next day) that the call would have been received in Los Angeles. Ignore DST. Show ALL your calculations. (4)
  2. Do you think this is a suitable time to call her office? (1) 
  3. Give a reason for your answer to QUESTION 5.2.2. (2)

5.5 Ms Adams would like to undertake a five-day independent tour of Beijing and China after the conference. State TWO elements of tour planning she should consider when planning her tour. (2)
5.6 Name one world icon she could visit while in China. (1)
5.7 Ms Adams took $3 000.00 with her on her trip. The exchange rate at the time was 1 US dollar = 6.3485 Chinese Yuan. Calculate how many Yuan she will receive in China. (4)
5.8 When she returns to the USA she has 2 850 Yuan remaining. Use the information below to calculate how many dollars she will receive for her Yuan from the bank.

Bank buying rate: 1$: 6.352 Yuan
Bank selling rate: 1$: 6.410 Yuan 

(4) [30]

[TOTAL: 70 marks]

map jfad

 

MEMORANDUM

TEST ONE MEMO

QUESTION 1
1.1 D ✓
1.2 C ✓
1.3 E ✓
1.4 N ✓
1.5 G ✓
1.6 J ✓
1.7 H ✓
1.8 L ✓
1.9 A ✓
1.10 I ✓
1.11 P ✓
1.12 F ✓
1.13 B ✓
1.14 O ✓
1.15 Q ✓ [15]

QUESTION 2
2.1 Euro ✓ (1)
2.2 Prime meridian ✓ (1)
2.3 Jetlag ✓ (1)
2.4 Tsunami ✓ (1)
2.5 SWIFT ✓ (1)
MEMO 1 MAGDUA [5]
QUESTION 3
3.1

  • Increased unemployment ✓
  • Increased homelessness ✓
  • Deflation ✓
  • Increased crime ✓
  • Other social and economic problems ✓ (5)

3.2 Yes, crime can be seen as a crisis. ✓ The results of crime have a negative impact on our social and economic environment ✓ (2)
3.3

  • Tourists will be scared to visit SA again ✓
  • Bad publicity for SA ✓
  • Victimised tourists will tell their friends – bad word of mouth ✓ (3) [10]

QUESTION 4
4.1 Political instability✓. Attacks by Islamist militants ✓ (2)
4.2 The attacks will not be repeated ✓✓ (2)
4.3 Tourism creates the multiplier effect ✓ which is vital for a country’s economic growth ✓ (2)
4.4 

  • Increased unemployment ✓
  • Homelessness ✓
  • Deflation ✓
  • Crime and other social and economic problems ✓ (4) [10]

QUESTION 5
5.1 750 km / 10 = 75 litres x R3,90 per litre = R292,50 ✓✓ (2)
5.2 R330,50 ✓ (1)
5.3 No fewer than two passengers / There have to be at least two passengers ✓ (1)
5.4 R330,50 x 1% = R3.31 ✓✓ (2)
5.5

  1. Culture tour ✓
  2. Game reserve tour (½)
  3. Game reserve tour (½)
  4. City tour ✓
  5. Souvenirs ✓
  6. Mountain splendour tour (½)
  7. Mountain splendour tour (½)
  8. Live concert ✓
  9. UShaka Marine world ✓
  10. Spend time with friends ✓ (8)

5.6

Accommodation [(R330,50 x 6) + R3,31] x 2 

✓✓✓ R3 972,62 

Travelling expenses [R2 330,00 + R292,50] 

✓✓ R2 622,50 

Tours [(R400 + R960 + R220 + R1190 + R310) x 2] 

✓✓✓✓ R6 160,00 

Entertainment [(R200 x 2) x 6] 

✓ R2 400,00 

Shopping & gifts [(R500 x 2) x 6] 

✓ R6 000,00 

Meals [(R200 x 2) x 6] 

✓ R2 400,00 

Total 

R23 555,12 

(12)
5.7 R23 555,12 / R10,38 = R2 269,27 ✓✓ (2)
5.8

  • A passport (½)
  • A visa (½)
  • Health certificates (½)
  • Travel tickets (½) (2) [30]
    [TOTAL: 70 marks]

TEST TWO MEMO

QUESTION 1
1.1

  • Differences may exist in the location of the work ✓
  • Differences may exist in dress requirements ✓
  • Differences may exist in working hours ✓ (3)

1.2

  • Training opportunities to increase their skills ✓
  • Receiving better pay as they gain experience ✓
  • Promotions to supervisory and management positions ✓
  • Sideways moves to parallel positions ✓ (4)

1.3 A code of conduct is a set of rules to guide behaviour and decisions. ✓✓ The value of a code of conduct is that it ensures common standards. ✓ (3) [10]

QUESTION 2
2.1

  • To recognise places in the world that are rich in heritage ✓
  • To protect and preserve these places for future generations ✓ (2)

2.2 Any four of the following:

  • Provide job opportunities for local people ✓✓
  • Generate income from tourists spending money ✓✓
  • Infrastructure improves e.g. roads ✓✓
  • Umbundu effect ✓✓
  • Living standards improve ✓✓ (8)

2.3

  1. Heritage: is made up of natural, indigenous, historical and cultural inheritance that make communities unique. Communities wish to preserve this rich history for future generations. ✓✓✓ (3) 
  2. Diversity: differences amongst people, species, environments, religions and backgrounds. It is important to recognise and appreciate one another’s uniqueness. ✓✓✓ (3)

2.4

  1. Western Cape ✓
  2. Western Cape ✓
  3. KwaZulu-Natal ✓
  4. Free-State/KwaZulu-Natal ✓
  5. Gauteng ✓ (5)

2.5 Inbound tourism: a tourist visiting a country from another country. Travel with a passport ✓✓ (2)
Domestic tourism: a tourist travelling in the country where he/she stays ✓✓ (2)
2.6 Cultural site: any three of the following:

  • It represents a masterpiece of human creative genius. ✓
  • It shows an important interchange of human values concerning developments in architecture, technology, monumental arts, town-planning or landscape design. ✓
  • It bears exceptional testimony to a cultural tradition or civilisation which is living or which has disappeared. ✓
  • It is an outstanding example of a type of landscape, building or technology that shows an important stage in human history. ✓
  • It is an outstanding example of a type of building, architecture, technology or landscape which illustrates a significant stage in human history. ✓
  • It is an outstanding example of human interaction with the environment, or a traditional settlement, land-use or sea-use of a culture. ✓
  • It is directly linked with events, traditions, ideas, beliefs, art or literature of outstanding worldwide importance. ✓

Natural site: any two of the following:

  • It contains superlative natural phenomena or areas of exceptional natural beauty. ✓
  • It represents major stages in the evolution of the earth and its geological development. ✓
  • It is an example of significant ongoing developments in ecosystems and groups of plants and animals. ✓
  • It is a unique, significant, natural habitat where biological diversity and threatened species must be conserved to ensure their survival. ✓ (5) [30]

QUESTION 3
3.1

  1.  Tourism that does not harm the ecological, social and economic environment ✓ (1)
  2. Protecting the earth’s resources so that they can support all life for future generations ✓ (1)
  3. Something that is native to a specific area ✓ (1)

3.2 Any two acceptable answers such as:

  • The overdevelopment of natural areas, e.g. forests, coastlines, etc. ✓
  • The degradation of natural features, e.g. mountains, reefs, rivers, etc. ✓
  • By not using local skills and products. ✓ (2)

3.3

  • Rapid growth ✓
  • More returning clients ✓
  • A greater sense of purpose ✓
  • Better working partnerships ✓
  • Improved media presence ✓ (5)

3.4

  1. Conservation of water, ✓ recycling, correct waste disposal ✓ and the planting of indigenous trees and shrubs ✓ (3)
  2. Facilitating health, ✓ education and literacy development ✓ and respecting local culture ✓ (3)
  3. Using local skills where possible ✓ and buying products locally ✓ (2) 
  4. Designing buildings according to local architecture ✓ using sustainable materials from the region ✓ (2) [20]

QUESTION 4
4.1 

  1. Namibian dollar ✓
  2. Yen ✓
  3. Euro ✓ (3)

4.2 Exchanging money:

  • Using ATM (Automatic Teller Machine) cards ✓
  • Exchanging traveller’s cheques at any Bureau de Change ✓
  • Buying with credit cards ✓ (3)

4.3 If a tourist has arrived in South Africa with US dollars and she wants to buy rands, the US dollar "buy" price is what she should check. ✓
If she wants to sell rands back to the bank when she leaves the country, the US dollar "sell" price is the guide. ✓ (2)
4.4

  1. £850 x R 11,51 = R9 783,50 ✓ (1)
  2. R400 / R11,55 = £34,63 ✓ (1) [10]
    [TOTAL: 70 marks]

TEST THREE MEMO

QUESTION 1
1.1 D ✓ (1)
1.2 B ✓ (1)
1.3 A ✓ (1)
1.4 D ✓ (1)
1.5 B ✓ (1)
1.6 D ✓ (1) [6]

QUESTION 2
2.1 True ✓ (1)
2.2 True ✓ (1)
2.3 False ✓ (1)
2.4 False ✓ (1) [4]

QUESTION 3
3.1 D ✓ (1)
3.2 E ✓ (1)
3.3 F ✓ (1)
3.4 C ✓ (1)
3.5 A ✓ (1) [5]

QUESTION 4
Any five of the following:

  • Fewer customers ✓✓
  • Negative word of mouth ✓✓
  • Poor organisational image ✓✓
  • Negative impact on other sectors ✓✓
  • Unhappy employees ✓✓
  • Dissatisfied customers ✓✓ [10]

QUESTION 5
5.1 SA companies, ✓ products and services ✓ (2)
5.2

  1. Leisure tourists ✓ - it is a tour to SAB, so it seems more appealing to leisure tourists ✓
  2. Historical tourists ✓ - a tour about the history of President Nelson Mandela ✓
  3. Cultural tourists ✓ - a tour to Lesedi Cultural village ✓ (6)

5.3

  1. South African brewery ✓
  2. President Nelson Mandela ✓
  3. Lesedi Cultural village - display of South African cultures ✓ (3)

5.4 Any four suitable answers such as:

  • Newspapers ✓
  • Radio ✓
  • Magazines ✓
  • Brochures ✓ (4) [15]

QUESTION 6
6.1 Without regular feedback, companies would not know if they were lacking in any part of their service delivery ✓.
With regular feedback they can rectify and prevent bad service delivery ✓ (2)
6.2 Rail Trail l could better their toilet facilities, ✓ assistance of their staff ✓ and safety precautions. This would ensure that they satisfy tourists’ needs ✓ (3)
6.3 No ✓. Travelling by train is too slow for a business traveller in South Africa ✓✓ (3)
6.4 Any four suitable answers such as:

  • Attitude ✓ - you must be considerate of the tourist ✓✓
  • Prevention ✓ - do not let the tourist ask for anything ✓✓
  • Never argue ✓ - the customer is always right ✓✓
  • Efficiency ✓ - do as much as you can for the client ✓✓ (12) [20]

QUESTION 7
7.1 Good customer service is important as it creates a positive impression of the business. ✓
Customers will be happier and will return. ✓
Customers will tell other people about the good service and more clients will come to the business. ✓
The business will earn more money and will grow expand. ✓ (4)
7.2 Any three methods and appropriate short descriptions:

  • Surveys and questionnaires ✓ - a set of short, simple questions about service for customers to answer
  • Feedback cards✓ - rating or comment cards placed where guests can find them easily, with short questions about service for guests to answer
  • Follow-up calls✓ - phoning guests soon after the visit to find out if they were happy with the service
  • SMS messages✓ - SMS feedback portal allows customers to report problems or ask questions via SMS
  • Web-based responses✓ - the business’s website provides online feedback forms or surveys, or live chat
  • Online independent travel review sites ✓ - websites on which tourists can share their good or bad experiences (6) [10]
    [TOTAL: 70 marks]

TEST FOUR MEMO

QUESTION 1
1.1 B ✓ (1)
1.2 D ✓ (1)
1.3 C ✓ (1)
1.4 B ✓ (1)
1.5 A ✓ (1) [5]

QUESTION 2
2.1 I ✓ (1)
2.2 J ✓ (1)
2.3 Q ✓ (1)
2.4 G ✓ (1)
2.5 P ✓ (1)
2.6 O ✓ (1)
2.7 L ✓ (1)
2.8 M ✓ (1)
2.9 K ✓ (1)
2.10 E ✓ (1)
2.11 D ✓ (1)
2.12 B ✓ (1)
2.13 F ✓ (1)
2.14 C ✓ (1)
2.15 A ✓ (1) [15]

QUESTION 3
3.1 Sectoral Determination for the Hospitality Sector Act ✓✓ (2)
3.2 Tourism Business Council of South Africa ✓✓ (2)
3.3 Tourism Marketing Levy South Africa ✓✓ (2)
3.4 Southern Africa Tourism Services Association ✓✓ (2)
3.5 electronic fund transfers ✓✓ (2) [10]

QUESTION 4
4.1 Any four suitable answers such as: salary ✓, leave ✓, working hours ✓, place of work ✓, job description ✓, bonus ✓, code of conduct. ✓ (4)
4.2 Any two suitable answers such as: Employees’ loyalty could decrease ✓ because they feel undervalued by their employer ✓. They may not want to work as hard ✓ and may speak negatively about the company. ✓ (2)
4.3 Any four suitable answers such as:

  • Be exceptionally polite, friendly and efficient. ✓
  • Be able to work under stress and remain calm and collected. ✓
  • It is important to be neatly and professionally dressed always. ✓
  • It is important to be on time always. ✓ (4) [10]

QUESTION 5
5.1

  1. She may need to get vaccinations, take prophylactics, and pack appropriate clothing. (any 2) ✓✓ (2)
  2.  Climate, appropriate clothing, suntan lotion. (any 2) ✓✓ (2)
  3. She needs to be insured before she travels in case her luggage is lost or stolen or she becomes ill. ✓✓ (2)

5.2 Los Angeles is at -8 and Beijing is at +8, so there is a 16 hour time difference. ✓ Flying time is 12 hours so plane lands at 19.00 plus 12 is 07:00 Los Angeles time. ✓ Beijing is ahead, so subtract 16 hours from 07:00 is 15:00 ✓ in Beijing the next day✓. (4)
5.3 disorientation, nausea, headache (any 2) ✓✓ (2)
5.4

  1. There is a 16 hour time difference. ✓ Beijing is ahead, so subtract 16 hours from 14:00 ✓, therefore the call is placed at 22:00 ✓ the day before ✓ in Los Angeles. (4)
  2. No ✓ (1)
  3. It is late in Los Angeles and the people from work will have gone home. ✓✓ (2)

5.5 Transport, accommodation, attractions and activities (any 2) ✓✓ (2)
5.6 Great Wall of China ✓ (1)
5.7 $3 000 x 6.348 ✓✓ = 19 044 Yuan ✓✓ (4)
5.8 2 850 Yuan/ 6.352 ✓✓ = $448.65 ✓✓ (4)
[30]
[TOTAL: 70 marks]

THE IMAGE OF THE COMPANY
PRODUCT PACKAGING

  1. Packaging That Captures Attention
  2. Packaging That Connects the Brand Message to the Consumer
  3. Package Messaging That Is Clear and Concise

1 jAGYA
THE IMAGE OF THE COMPANY
CUSTOMER SERVICE POLICIES

Customer service policy
Covers:

  • the statement to the customer - what level of service can they expect?
  • standards that can be expected
  • loyalty schemes
  • formal complaints procedure - organisational and customer.

INTERACTION WITH CUSTOMERS
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COMMUNICATION SKILLS
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CONDITIONS OF EMPLOYMENT
REFERS TO THIS:
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Basic Conditions of Employment Act (No 75 of 1997)
The Act regulates the following employment conditions:

  • Work time and rules
  • Remuneration and deductions
  • Termination of employment
  • Administrative obligations
  • Prohibition of the employment of children
  • Variation of basic conditions of employment
  • Monitoring, enforcement and legal proceedings

Professional image in the tourism industry
THE IMAGE OF THE STAFF
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Uniform Allowance
6 sfs

  • Employers may provide employees with tax-free allowances to purchase uniforms if the apparel qualifies under the Internal Revenue Code (IRC) as a uniform and employees substantiate their expenses under the accountable plan rules of the IRC.

PERSONAL HYGIENE & GROOMING
Grooming refers to the things that people do to keep themselves clean and make their face, hair, and skin look nice.
7 jhgada

Employment Contract
BY ALISON DOYLE | Updated January 06, 2020
8 kjhaiuhda

What is an employment contract, and how does having an employment agreement impact your status as an employee?
An employment contract is a signed agreement between an individual employee and an employer or a labor union. It establishes both the rights and responsibilities of the two parties: the worker and the company.
Review information on what to expect when you're asked to sign a contract, other types of agreements that cover employees in the workplace, and the pros and cons of contracts.

PROFESSIONAL APPEARANCE
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Normal working hours
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  • Weekly hours = maximum 45 hours/week.
  • Daily hours =
    • Working 5 days/week or less = 9 hours/day.
    • Working more than 5 day/week = 8 hours/day. I
    • f an employee's duties include serving the public, an extension of 15 minutes per day is allowed to a maximum of 60minutes/week.
  • Maximum working hours per day = 12 hours.
  • Goal of the Act is ultimately to reach a 40hour working week.

Flight Attendant
11 ajhgdua

  • High Salary 
  • Travel, Medical, Dental, Pension Benefits 
  • Discounts on Accommodations, Tour Packages, Duty Free, etc.

FRINGE BENEFITS
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BCEA (Leave I)

  • Leave provisions do not apply to employees who work for less than 24 hours per month.
  • Different types of leave: 
    • Annual leave 
    • Sick leave 
    • Maternity leave 
    • Family responsibility

BCEA (Leave II) 
Annual leave

  • Characteristics: 
    • Leave with full pay
    • 12 month leave cycle 
    • 21 consecutive days' leave per year after 12 months' service with same employer
    • At least one day leave for every 17 days of completed work 
    • Leave extended by 1 day for every public holiday which falls within leave period.
  • Remuneration l.r.o. leave must be paid to employee on last day of work before leave period commences or on usual pay day. Annual leave must be granted within first 6 months of completion of leave cycle.
  • Annual leave must be taken and may not be traded for 'money'.
  • May not run concurrently with a period of notice or any other period of leave.
  • Can be reduced with days fully paid casual leave granted by employer at request of employee.
  • Employee not allowed to work for employer during leave - only at termination of service.
  • Remuneration for leave should be at least equal to normal remuneration for the same time worked.

JOB DESCRIPTIONS
CORE DUTIES

BCEA (Leave III)
Sick leave

  • Characteristics: 
    • Leave with full pay 
    • 36 month leave cycle 
    • Number of days normally worked during period of 6 weeks after initial 6 months of employment 
    • One day's pald sick leave for every 26 days worked during first 6 months of employment 
    • Slek leke payments my be reduced by agreement
  • Payment for sick leave must take place on usual pay day.
  • Can agree on reduced remuneration but number of days must increase and remuneration not less than 75% of what he/she would have earned (e.g. entitled to 30 days - R100 per day, increased to 40 days – R75 per day).
  • Medical certificate required after 2 dorms of absence after 2 occasions of absence within 8-week period. If no proof is submitted, employer not obliged to pay employee.
  • May not run concurrently with annual leave or perfod of notice.
  • If resident on employer's premises and not able to obtain medical certificate easyemployer not allowed to withhold remuneration provided reasonable Issistance rendered to employee to obtain medical certicate.

BCEA (Leave III)
Family responsibility leave

  • Characteristics:
    • 3 days' paid leave per annual leave cycle 
    • When child is born, gets ill or dies or when a spouse, life partner, parent, grandparent, grandchild or sibling dies 
    • Only employees who work for 4 days or more per week are entitled to this leave and who are employed > 4 months .
  • Employer may require proof of event before payment.
  • Unused days do not accrue.
  • Number of days and circumstances may be varied by collective agreement.

SERVICE ETHICS
ETHICS AND ETHICAL BEHAVORIAL
Ethics

  • Ethics
    • A code of moral standards of conduct for what is "good" and "right" as opposed to what is "bad" or "wrong".
  • Ethical Behavior
    • That which is “right” or “good” in the context of governing moral code. – Ethical behavior is value driven

ACTIVITY 1:
QUESTION 7

Study the pictures of employees at a travel agency below and answer the questions that follow.
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7.1 Explain the importance of a code of conduct at a travel agency.
7.2 Discuss TWO ways in which the unprofessional behaviour of the staff members in the pictures above can impact negatively on the work ethics of
the other staff members at the travel agency with regard to:
7.2.1 Harassment
7.2.2 Laziness
7.3 Explain TWO ways in which the employer can deal effectively with the above cases of unprofessional behaviour to ensure productivity at the travel agency.[14]
7.2 Study the advertisement below and answer the questions that follow.
7.2 jhagda

ACTIVITY 2:
Study the information below and answer the questions that follow.
7.1 Good communication is a key consideration for businesses when it comes to maintaining a professional image.
The manager of the A1 Hotel received an e-mail in which a hotel guest complained about the poor work ethic of some of the staff members at the hotel and the lack of good service delivery.
MANAGER'S RESPONSE TO THE COMPLAINT
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7.2.1 Refer to the advertisement above, name TWO values expected from the person applying for this position. (2)
7.2.2 Name TWO communication skills that are required for this position. (2) [14]
7.1.1 Name the document employees have to sign when accepting a position in the hospitality industry.
7.1.2 Explain why the owner of this hotel can take disciplinary action against the manager after seeing the e-mail above.
7.1.3 Explain ONE reason why the hotel's slogan ' We put you first' will be included in the hotel's customer feedback policy.
7.1.4 The manager of the A1 Hotel has poor business writing skills.

  1. Identify TWO examples of poor written communication in the manager's e-mail that should NOT be used in business communication.
  2. Correct TWO examples of poor written communication identified in QUESTION 7.1.4(a).

ACTIVITY 3:
7.1 Refer to the extract from the website of South African National Parks below and answer the questions that follow.
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Choose an item from the extract that matches a description below. Write only the question number (7.1.1-7.1.4) and the letter (A-D) in the ANSWER BOOK, for example 7.1.5 E.
7.1.1 The logo of South African National Parks (1)
7.1.2 ONE aim of South African National Parks (1)
7.1.3 Information on South African National Parks (1)
7.1.4 Availability of accommodation at South African National Parks (1)
7.2 Study the photograph below and answer the questions that follow.
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7.2.1 State TWO aspects of Nkosi Xaba's dress code that show the professional image of South African National Parks (SANParks). (2)
7.2.2 Refer to Nkosi's words in the speech bubble.
Discuss ONE way in which routine patrols show that SANParks has an environmental policy in place.

ACTIVITY 5
Study the brand images of companies below and answer the questions that follow.
The professional image of a company is more than just a recognisable and trustworthy brand. It is portrayed (shown) in many ways other than the physical appearance of the buildings and the staff."
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7.1 Identify TWO tourism companies above where the staff must have excellent telephone skills and e-mail writing skills when making transport bookings.(2)
7.2 Give ONE reason for your choice in QUESTION 7.1 (2)
7.3 List FOUR elements that must appear on the letterhead of Sunset Air that will project a professional image. (4)
7.4 Give ONE example of how the companies in QUESTION 7.1 may improve their e-mail writing skills to promote their professional image. (2) [10]

ACTIVITY 4:
Study the picture below and answer the questions that follow.
19 a ugda
7.1 Identify the tourism industry sector shown in the picture.(2)
7.2 Explain the importance of personal appearance in the sector identified in QUESTION 7.1. (2)
7.3 The employee in the picture above does not comply with the code of conduct of the Palms Hotel. Identify THREE examples of unprofessional appearance/conduct by the employee in the picture. (6)
7.4 Suggest THREE intervention strategies to management that will improve this employee's conduct. (6) [16]

Monday, 06 December 2021 12:48

Just-in-Time - Tourism Grade 12 Study Guides

SECTION B

QUESTION 2: MAP WORK AND TOUR PLANNING

Itinerary

  • The itinerary specifies all aspects of a traveller’s programme day by day
  • The itinerary indicates the planned activities, accommodation, meals, transport and optional excursions.

World Health Organisation

  • A specialised agency of the United Nations Organisation and its main concern is public health
  • It provides support to countries and monitors global health trends

Vaccination

  • A vaccination is a preparation injected into the blood stream to stimulate a protective immune response.
  • A vaccination prevents a person from being infected with the disease if they do come into contact with it

Compulsory vaccination

  • Are regulated (by the World Health Organisation) according to identified threats found in some countries
  • To contain the spreading of a high-risk disease

Recommended vaccination

  • A precautionary measure to ensure the health of individual tourists and are optional

Malaria precautions

  • Take preventive medicines
  • Apply insect repellent to exposed skin
  • Close windows and doors at night unless they are screened
  • Sleep under a mosquito net
  • Wear long-sleeved tops, trousers and socks when going outdoors during the evening.

Valid passport

  • A document issued by a national government that certifies the identity (name, date of birth, gender and place of birth) and nationality of its holder.

Visa

  • A stamp endorsed in the applicant’s passport giving the holder permission to travel to, enter, transit or remain in a foreign country

Health certificate

  • A health certificate is a statement signed by a health-care provider (such as a doctor) that proves the health of the bearer of the certificate.
  • The health certificate is a booklet that travellers must produce as proof that they have had the necessary vaccinations required to enter a country.

International Driver’s Permit (IDP)

  • Permits a tourist to drive in a foreign country
  • Provides important information to validate the South African driver's license in many different languages.
  • Car rental companies often request a valid IDP when driving abroad

Duty free goods

  • Duty free goods are goods that have been purchased at a duty-free shop on which the tourist will not pay tax at customs

Prohibited goods

  • Prohibited goods are goods that, according to the law, may not be brought into a country.

Green channel

  • The green channel is a route located in the customs area of an international airport for passengers who have nothing to declare (those who are carrying goods that are within the customs limits only/not carrying prohibited items).

Red channel

  • The red channel is a route located in the customs area of an international airport for passengers with goods to declare (those who are carrying items above the permitted customs limit and/or carrying prohibited items).

To declare

  • To state officially the goods that you have brought into a country at customs.

Daylight Savings Time

A practice of turning the clock one hour ahead of standard time at the beginning of summer to gain extra daylight hours
Advantage of DST:

  • More daylight time available to spend outdoors
  • More time to participate in leisure activities, e.g. shopping
  • Attractions opened for longer hours

Time Zone

A region of the Earth where all the countries have adopted the same standard time

Steps to follow when doing time zone calculations:

  1. Locate the places on a world time zone map and determine their time zones. The world time zone map is colour coded. This means that the white/grey areas on the top of the map correspond with the colour of the country.
  2. Determine the number of hours difference between the TWO places.
  3. Decide if you must add (going east) or subtract (going west) the number of hours.
  4. Add/subtract the number of hours and give the answer using the 24-hour clock. Remember to include the day or date.
  5. If the calculation requires DST, first add ONE hour to the time zone of the place that uses DST. [If New York (-5) is used in the calculation, the time zone should be adjusted by adding ONE hour, taking New York to -4]. Then do the calculation as usual.
  6. Calculations with flying time:
    If you want to determine the arrival time ADD the flying time
    If you want to determine the departure time SUBTRACT the flying time

Jet lag

Jet lag is a physical condition related to flying long distances over many time zones (flying from east to west or west to east). It is related to the number of time zones a traveller crosses and not to the length of the flight.

SYMPTOMS OF JET LAG:

  • Insomnia
  • Fatigue
  • Irritability
  • Interrupted sleep
  • Discomfort in legs and feet
  • Struggle to concentrate
  • Constipation or diarrhoea
  • Confusion and disorientation
  • Dehydration
  • Headaches
  • Nausea
  • Loss of appetite
  • Dizziness

Jet fatigue

  • Jet fatigue is related to the length of the flight as many travellers feel extreme tiredness after a long flight.

SECTION B

QUESTION 3: FOREIGN EXCHANGE

GDP

  • The value of all goods & services produced within a country in a year.
  • The GDP is used to measure economic progress in a country

Multiplier effect

The multiplier effect is when money, spent by tourists, filters down through the economy benefitting other organisations

The buying power of the Rand

  • The amount of foreign currency you can buy with your Rand is referred to as the buying power of the rand.
  • If the rand can buy a lot of the other currency, we say the rand is strong in relation to the other currency.
  • If the rand can only buy a little of a particular currency, we say that the rand is weak in relation to that particular currency.

If the Rand is strong

  • The foreign tourists will receive less Rand’s for their currency
  • Foreign tourists will have less money to spend
  • Inbound tourists will visit for a shorter period or will not visit at all
  • Tourism will contribute less to South   frica’s GDP and the economy will decline
  • Can lead to job losses

If the Rand is weak

  • More inbound tourists will visit SA
  • Foreign tourists get more Rand’s for their currency
  • Foreign tourists have more money to spend during their visit
  • Foreign tourists will visit for longer periods
  • This will lead to an increase in the GDP and will have a positive impact on the economy
  • It can lead to job creation

Bank Selling Rate

  • The rate at which the foreign exchange dealers e.g. commercial banks, will sell foreign currency

Bank Buying Rate

The rate at which the foreign exchange dealers e.g. commercial banks, will buy foreign currency

When doing a foreign exchange calculation always look at it from the Bank’s position

What is the Bank doing with the foreign currency?

  • Is the bank selling foreign currency? (BSR)
  • Is the bank buying foreign currency? (BBR)

Currency rate sheet

  • A currency rate sheet is a list of the rates of exchange (RoE) at which foreign currencies are bought and sold.
  • This rate will determine how much foreign currency you will receive, when you exchange your money.

Convert a major currency to the South African Rand (ZAR)

MULTIPLY by the Rate of Exchange e.g. USD150 × 14,83 = R2 224,50

Convert the South African Rand (ZAR) to a major currency

DIVIDE by the Rate of Exchange e.g. R15 000 ÷ 16,65 с € 900,90

SECTION C

QUESTION 4: TOURISM ATTRACTIONS

Tourist attraction

A tourist attraction is a place, an area, a building or an event of interest that tourists visit for its historical significance, cultural value, natural or human-made beauty or entertainment opportunities.

Icon

An icon in the tourism context is an attraction or feature that is world famous, has symbolic value and is closely associated with a particular destination.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OF COUNTRY

NAME OF CITY/TOWN/ AREA

WHY IS IT AN ICON

picture 1 jhdga

Sydney Opera House

Australia

City: Sydney

It is universally recognised as an architectural masterpiece of the 20th century because of its design and construction

picture 2 jakbd

Ayers Rock / Uluru-Kata Tjuta National Park

Australia

State: Northern Territory

Uluru or Ayers Rock is a unique, massive, round rock formation composed of hard, red sandstone. It also known as an “island mountain” and two-thirds of the rock is buried 5 km underground.

picture 3 kuauhd

The statue of Christ the Redeemer

Brazil

City: Rio de Janeiro

With its outstretched arms overlooking the city of Rio de Janeiro it is one of the most famous statues in the world and is known not only for its dramatic location and size, but also as a symbol of Christianity and peace.

picture 4 uygad

picture 5 ujyagd

Niagara Falls

Canada

and

USA

Cities: Niagara Falls, Ontario (Canada) and Niagara Falls, New York (USA)

The Niagara Falls is the most famous waterfall in the world. It is one of the biggest and most powerful and receives more visitors than any other waterfall.

picture 6 collosseum kjagbd

Colosseum

Italy

City: Rome

The Colosseum is the largest amphitheatre constructed during the Roman Empire and is regarded as the greatest example of Roman engineering and architecture. It is nearly 2 000 years old.

picture 7 leaning tower

Leaning Tower of Pisa (Piazza del Duomo)

Italy

City: Pisa

Because of its beauty and the fact that it has tilted, this freestanding bell tower or campanile, known as the Leaning Tower of Pisa, is one of the most recognisable structures in the world.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OF COUNTRY

NAME OF CITY/TOWN/ AREA

WHY IS IT AN ICON

picture 8 akhhgda

Venice

Italy

City: Venice

Venice, a city built on 118 small islands linked by canals and bridges is one of the most beautiful cities in the world and famous for its architecture and art.

picture 9 vatican city jghs

Vatican City

Italy

City: Rome

Vatican City, also known as the Vatican, is the world’s smallest independent city state, the seat of the Roman Catholic Church and is ruled by its head, the pope.

picture 10 pyramids ujgya

The Great

Pyramids of Giza

Egypt

City: Giza

The Pyramids of Giza were constructed over 4 500 years ago as massive tombs for the Egyptian pharaohs. The pyramids are symbols of Egypt’s history and culture. They serve as evidence of the ancient Egyptians’ technical advancement.

picture 11 sphinkx jhgad

The Sphinx

Egypt

City: Giza

The Sphinx is a huge statue of a creature with the body of a lion and the head of a human. It is carved out of a single block of limestone and is one of the largest and most recognisable statues in the world, and a symbol of Egypt.

picture 12 berlin wall jgad

Berlin Wall

Germany

City: Berlin

Built in 1961, the Berlin Wall was a concrete wall separating West Berlin from East Berlin in East Germany. It symbolised the division between democracy and communism during the Cold War.

picture 13 black forest

Black Forest

Germany

State: Baden-Württemberg

The Black Forest is known for its beautiful scenery consisting of mountains covered with pine and fir trees, valleys, lakes, mineral springs and picturesque villages.

picture 14 dome ajbda

The Dome of the

Rock

Israel

City:Jerusalem

The Dome of the Rock is an Islamic shrine built on a sacred rock. It is the third most holy site in the world for Muslims after Mecca and Medina.  The Prophet Muhammad, the founder of Islam, is believed to have ascended to heaven from this site.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OF COUNTRY

NAME OF CITY/TOWN/ AREA

WHY IS IT AN ICON 

picture 15 wailing wall jygad

The Wailing Wall

Israel

City: Jerusalem

The Wailing Wall, located on the west of the Temple Mount in the old city of Jerusalem, is the holiest Jewish site in the world.

 picture 16 wall of china jgtfad

The Great Wall of China

China

City: Beijing

The Great Wall of China dates back 2 000 years and is the world’s longest human-made defensive structure. It is not only a symbol of China’s history and culture, but it is testament to ancient Chinese determination and engineering skills.

picture 17 parthenon hgva

The Parthenon

Greece

City: Athens

The Parthenon is the remains of a 2 500-year-old temple located on the Acropolis, a hill overlooking the city of Athens, Greece. It is a symbol of ancient Greek civilisation and its most famous surviving building.

picture 18 taj mahal ufad

The Taj Mahal

India

City: Agra

The Taj Mahal is constructed of white marble. It was built by an Indian ruler as a symbol of his everlasting love for his deceased wife. The Taj Mahal is regarded as an architectural masterpiece and one of the most beautiful buildings in the world.

picture 19 aighda

The Blue Mosque

Turkey

City: Istanbul

The Blue Mosque in Istanbul, Turkey, with its cascading domes, decorated with ceramic blue tiles on the inside, its courtyards and six minarets, is considered one of the most beautiful mosques in the world.

picture 20 eiffel tower

The Eiffel Tower

France

City: Paris

The Eiffel Tower is the world’s most famous tower and a symbol of Paris. It is the tallest structure in Paris and the most-visited tourist attraction in the world that charges an admission fee.

picture 21 the french riviera nic

The French Riviera

France

City: Nice

The French Riviera or Côte d’ zur is one of the most famous and luxurious coastal resort areas in the world. It lies on the Mediterranean coast of south-eastern France on the border with Italy.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OFCOUNTRY

NAME OF CITY/TOWN/AREA

WHY IS IT AN ICON

picture 22 fuji iaygd

Mount Fuji

Japan

City: Tokyo

Mount Fuji is the highest mountain in Japan. This volcanic mountain is world famous for its near perfect symmetrical cone shape and is recognised as a symbol of Japan.

picture 23 itza jdagd

Chichen Itza

Mexico

Region: Yucatán Peninsula

Chichen Itza is the ruined remains of a large, ancient Mayan city. It is one of the best-preserved archaeological sites of the ancient Mayan civilization.

picture 24 petra jahbda

Petra

Jordan

City: Wadi Musa

This desert city, hidden in a narrow valley between by mountains, has been carved from solid rock, making it one of the most spectacular ancient cities in the world. Petra, which means “rock” in Greek, was constructed around 100 BC as the capital city of the Nabateans, an Arab tribe.

picture 25 mt everest ajkgda

Mount Everest

Nepal

City: Kathmandu

Mount Everest is the highest mountain in the world. The peak is 8 848 m above sea level.

picture 26 hfahd

Mecca

Saudi Arabia

City: Mecca

Mecca, the most sacred city of the Islam faith, is the spiritual centre of all Muslims. It is the birthplace of the Prophet Muhammad, the founder of the Islamic faith, and the focal point of Muslim pilgrimage.

picture 27 swiss alps iuhada

The Swiss Alps Jungfrau-Aletsch

Switzerland

Area: Cantons of Berne and Valais

The Swiss Alps Jungfrau- Aletsch is a protected area in south-western Switzerland. This beautiful region has high mountain peaks that are permanently covered in snow, glaciers and valleys.

picture 28 windmills ihgad

Windmills

The Netherlands

Area: All over the Netherlands

Windmills are one of the main symbols associated with the Netherlands. Not only are they characteristic of the Dutch landscape, they are also a symbol of the Dutch struggle against water.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OF COUNTRY

NAME OF CITY/TOWN/AREA

WHY IS IT AN ICON

pic 1 peru uaygda

Machu Picchu

Peru

City: Cuzco

Machu Picchu, an ancient Inca city in the Andes Mountain in Peru, is one of the most important and mysterious archaeological sites in the world. It is also known as The Lost City of the Incas.

pic 2 aguda austwich ajhbd

Auschwitz

Poland

City: Auschwitz

Auschwitz was Nazi Germany’s largest concentration camp, forced labour and extermination camp complex in Europe from 1940 to 1945. Today it serves as a symbol of the Holocaust and humanity’s cruelty to its fellow humans during World War II.

pic 3 the algarve ajcd

The Algarve

Portugal

City: Faro

The   lgarve is Portugal’s most popular tourist region and one of Europe’s favourite holiday destinations. This region is renowned for the natural beauty of its dramatic coastline, sunny weather, excellent beaches, opportunities for outdoor activities and great food.

pic 4 alcazar jad

Alcázar of Segovia

Spain

City: Segovia

The Alcázar of Segovia is the most recognisable fortress castle in Spain. It is built on top of a huge rocky hill and shaped like the bow of a ship. This fortress dates back centuries and is one of the most visited monuments in Spain.

pic 5 bulllfights uatdga

Bullfights

Spain

Cities: Madrid, Seville and Pamplona

The practice of bullfighting, in which a bullfighter in a public display provokes and then kills a bull with a sword, is universally associated with Spain’s history and culture.

pic 6 flaoting markets ajgd

Floating markets

Thailand

City: Bangkok

The colourful and vibrant floating markets where traders sell their goods from their boats on the rivers and canals have become a symbol of the traditional way of life in Thailand.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OF COUNTRY

NAME OF CITY/TOWN/AREA

WHY IS IT AN ICON

pic 7 the kremlin ahfda

The Kremlin

Russia

City: Moscow

The Kremlin is a fortified complex of buildings in the city of Moscow. The monumental walls, towers, cathedrals and palaces that make up the Kremlin form a living museum of Russian history, culture and architecture. It is also a symbol of the Russian state.

pic 8 the red square ajygda

The Red Square

Russia

City: Moscow

The Red Square in the centre of Moscow, Russia is a large public square surrounded by significant buildings. It has been the site of many historical events since the 15th century and is considered to be the most famous tourist attraction in Moscow.

pic 9 big ben jygad

Big Ben

United Kingdom

City: London

Popularly referred to as Big Ben, the Elizabeth Tower of the Palace of Westminster is recognised worldwide as a symbol of the city of London and the United Kingdom.

pic 10 buckingham palace jygad

Buckingham

Palace

United Kingdom

City: London

Buckingham Palace is the official residence and administrative headquarters of the British monarch. It is a major tourist attraction in London.

pic 11 tower of london jgyad

Tower of London

United Kingdom

City: London

The Tower of London is an ancient fortress palace complex and one of the oldest buildings in London. It is a symbol of royal power dating back to the 11th century.

pic 12 tower bridge juagd

Tower Bridge

United Kingdom

City: London

London's Tower Bridge is one of the most recognizable bridges in the world. Tower Bridge (built 1886-1894) is a combined bascule and suspension bridge in London which crosses the River Thames. It is close to the Tower of London, from which it takes its name, and has become an iconic symbol of London.

PICTURE OF WORLD ICON

NAME OF WORLD ICON

NAME OF COUNTRY

NAME OF CITY/TOWN/ AREA

WHY IS IT AN ICON

pic 13 statue of liberty jkahda

The Statue of Liberty

United States of America

City: New York

The Statue of Liberty was a gift from France to the USA. It has become one of the most recognisable landmarks in the world and a universal symbol of freedom because it stands in New York Harbour which is where all immigrants to the United States used to arrive by boat.

pic 14 the bgrand canyon kahgd

The Grand Canyon

United States of America

State: Arizona

The Grand Canyon is one of the largest gorges in the world. With its overwhelming size and magnificent landscape, it is one of the most spectacular natural wonders and best examples of erosion in the world.

 LOCATION OF ICONS ON A MAP
location 1 kajhgd
 location 2 jgatda
 location 3 kaghduya
location 4 jagda
location 5 jagdua
location 6 jasguady
loation 7 kjghuyad
location 8 mjhgajd
location 9 iuhiuad
location 10 aiygda

Factors contributing to the success of a tourist attraction

  • Excellent marketing of tourism products locally/or internionally
  • Sustainable and responsible management plans
  • Efficiency and ethical behaviour of staff and management
  • Positive experience of visitors
  • Safety and crime prevention
  • General appearance and upkeep of the attraction
  • Considering the needs of people with disabilities
  • Universal access

Characteristics of a successful tourist attraction

  • Actual number of visitors exceeds the target number of visitors
  • Repeat visits
  • Income generated exceeds target figures
  • Positive impact on local community and environment

SECTION C

QUESTION 5: CULTURE AND HERITAGE TOURISM

World Heritage Sites

  • World Heritage Sites are places of outstanding universal value and have been awarded international recognition by the United Nations Educational Scientific and Cultural Organisation (UNESCO)

The role of UNESCO

  • Constant monitoring to maintain and protect the status of the World Heritage Sites
  • Provide support in terms of management plans.
  • Assistance with upgrading of facilities in the event of an unforeseen occurrence.
  • Financial aid is provided in cases of unforeseen occurrences.
  • Engage with relevant stakeholders when the World Heritage Sites are threatened.
  • Education / create awareness
  • Promote co-operation and development.
  • Encourage people to nominate sites to be included in the World Heritage Site list.
  • Support countries in building public awareness for the protection of World Heritage Sites.
  • Encourage the local population to preserve their cultural and  natural heritage.

World Heritage Sites in South Africa

NAME OF WHS

PROVINCE

TYPE

Cradle of Humankind (1999)

Gauteng

Cultural

Mapungubwe Cultural Landscape (2003)

Limpopo

Cultural

Robben Island (1999)

Western Cape

Cultural

Richtersveld Cultural and Botanical Landscape (2007)

Northern Cape

Cultural

Khomani Cultural Landscape (2017)

Northern Cape

Cultural

Cape Floral Region Protected Areas (2004)

Western Cape

Natural

iSimangaliso Wetland Park (1999)

KwaZulu Natal

Natural

Vredefort Dome (2005)

Free State

Natural

Barberton Makhonjwa Mountains (2018)

Mpumalanga

Natural

uKhahlamba-Drakensberg Park (2000)

KwaZulu Natal

Mixed

The value of World Heritage Sites to South Africa

  • The sites receive national and international recognition which will result in an increase in visitor numbers.
  • An increase in tourist numbers will lead to the creation of job opportunities due to increased demand for services.
  • Tourism will generate income due to a demand for products and services e.g. accommodation, transport, entry fees, food, drink, etc.
  • Increased visitor numbers will set the multiplier effect into motion.
  • Standards of living will be improved through money directly or indirectly earned by tourism.
  • There will be a boost in the economic activity lending itself to increased GDP and benefiting all establishments in the area
LOCATION OF WORLD HERITAGE SITES ON A MAP OF SOUTH AFRICA
location 11 jagdja

SECTION C

QUESTION 6: MARKETING

The importance of marketing South Africa internationally

  • Increase in annual volume of foreign arrivals to SA
  • Increase in international awareness of South Africa as a travel destination

The core business of SA Tourism

  • Marketing South Africa internationally as a tourism destination of choice
  • Maintaining and enhancing the standard of facilities and services for tourists
  • Coordinating the marketing activities of role players in the industry

Opportunities for marketing SA internationally

  • ITB (Berlin)
  • World Travel Market (London)

Funding for SA Tourism’s international marketing initiatives

  • TOMSA is a private sector initiative created to raise additional funds for marketing South Africa internationally.
  • Tourism businesses (e.g. accommodation, car rental, tour operators and travel agents) collect a voluntary 1% levy from tourists
  • The businesses pay the levies to the Tourism Business Council of South Africa (TBCSA) who gives it to TOMSA
  • TOMSA is the administrator of the funds.
  • TOMSA makes the funds available to SA Tourism
  • SA Tourism uses the funds to market South Africa both domestically and internationally.

Branding
branding jhgad

  • Helps create a positive, unified image of South Africa.
  • A brand that is built on pride.
  • A recognisable brand to promote South Africa on an international platform.
  • It enables South Africa to function as a competitive destination in the global arena.
  • A strong brand positions our country as an attractive destination partner for trade and investment.
  • A recognisable global brand inspires positive thoughts and feelings about the country will convince people to travel to South Africa
  • It showcases South   frica’s successes and motivates investor confidence.

Opportunities to promote SA and the southern African region to the world

  • Tourism Indaba (Durban)
  • Getaway Show (Cape Town and Johannesburg)

SECTION D

QUESTION 7: TOURISM SECTORS

Factors that contribute to a professional image in the tourism industry

  • Image of the company: name, logo, slogan, website, stationary, marketing material, product packaging, physical appearance of business, environmental policies, customer service policies
  • Image of the staff: professional appearance, uniforms, dress code, personal hygiene, grooming, interaction with customers, communication skills

Contract of employment

The contract of employment describes the basic conditions of employment such as:

  • working hours
  • uniform allowances
  • travel benefits
  • leave
  • core duties
  • fringe benefits
  • remuneration and deductions
  • termination of service
  • professional accountability and responsibility
  • service ethics

Code of Conduct

  • Purpose: It spells out expected conduct of staff in the performance of their duties, and guidance for staff members faced with ethical challenges
  • Value: Creates a co-operative, collaborative atmosphere; promotes integrity in the workplace.

SECTION D

QUESTION 8: SUSTAINABLE AND RESPONSIBLE TOURISM

The three pillars of sustainable tourism

  • Environment (planet):
    Good environmental practices, such as resource management (energy and water), waste management (reduce, re-use, recycle), litter control, pollution control, environmentally friendly building, promotion of indigenous flora and control of alien invasive plants in grounds and gardens
  • Economy (profit):
    The role of business. The responsible attitude of a tourism business towards the people and environment it affects.
    Ways to practise it: ownership, employment, procurement of local goods and services
  • Social (people):
    Considering the positive and negative effects of tourism on local communities, culture and heritage. Corporate social investment (CSI) in tourism, such as financial or nonfinancial support given by tourism companies to health/sport/education/youth projects

Responsible tourism and tourists

  • Codes of conduct for tourist behaviour (social, economic and environmental): These are guidelines addressing responsible and appropriate behaviour when visiting a destination.
  • How can a tourism destination attract environmentally (people, planet, profit) conscious tourists?
  • The contribution of FTTSA towards encouraging responsible and sustainable practices

SECTION E:

QUESTION 9: DOMESTIC, REGIONAL AND INTERNATIONAL TOURISM

Global events

  • A global event is a happening or occurrence of international importance because it will affect the whole world.
  • A global event affects the whole economy of the country in which it is hosted

The main economic benefits of global events

  • Income generation (money spent by visitors at the destination)
  • Investment in infrastructure and services (such as communication)
  • Job creation
  • Foreign exchange income

The advantages a global event holds for the host country

  • Infrastructure development
  • Investment
  • Income from foreign exchange
  • The multiplier effect

Disadvantages of global events for a host country

  • High cost of new infrastructure
  • Disappointing investment and foreign exchange income
  • Increased cost of goods and services
  • Economic leakages
  • Community opposition

Political situations

  • A political situation refers to what is happening in the politics of a country.
  • Examples: civil war, terrorism, general unrest

Unforeseen occurrences

  • Unforeseen occurrences are events that are unpredictable - we do not expect or know that the event will take place.
  • Examples: tsunamis, earthquakes and other natural disasters, the global recession, diseases, accidents and economic upsets

The impact of unforeseen occurrences

  • Destruction of infrastructure
  • Destruction of flora, fauna and ecosystems
  • Cancellation of flights, rail, cruises and road trips
  • Cancellation of holidays
  • Fewer tourists will visit the destination
  • Less revenue will be generated
  • Job losses

Forms of payment when travelling internationally

  • Electronic fund transfers (EFT)
  • Telegraphic transfers (SWIFT transfers)
  • Bank drafts
  • Internet payments
  • Foreign bank notes (cash)
  • Credit cards (Visa, MasterCard, American Express, Diners Club)
  • Traveller’s cheques
  • Preloaded foreign currency debit cards (Cash Passport card /Travel Wallet/International Travel Card)

Foreign market share

  • The portion of the inbound tourism market that is controlled by a specific country

Land markets

  • Land markets are countries where at least 60% of arrivals from the country arrive by land (Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe)

Air markets

  • Air markets are those countries where at least 60% of arrivals from the country arrive by air

SECTION E

QUESTION 10: COMMUNICATION AND CUSTOMER CARE

The purpose of obtaining customer feedback

  • To identify areas of customer service that need improvement
  • To adapt service to accommodate changing customer needs.
  • Positive feedback serves as staff motivation to deliver excellent service
  • It can prevent the company from losing customers to competitors

Methods to obtain customer feedback

  • Surveys
  • Questionnaires
  • Feedback cards
  • Follow up calls
  • SMS messages on cell phones
  • Web-based responses

Positive impact of excellent service delivery

  • Customer loyalty and repeat business
  • Fewer customer complaints
  • Reduced marketing budget
  • Increased sales
  • Improved public image
  • Edge over the competition
  • More effective employees
  • Motivated staff members

QUESTIONS

Questions

  1. What do you understand by the phrase global event? (4)
  2. Name two of the biggest sporting events in the world? (4)
  3. What do you understand by the phrase tourism indaba? (6)
  4. List six positive effects for a country hosting a global event?  (12)
  5. List six possible negative impacts for a country hosting a global event? (12)
  6. Name three examples of political instability and safety in a country which might affect a tourists decisions about whether or not to travel there? (6)
  7. Give an example of an unforeseen circumstance that could affect tourism?  (2)
  8. Give 4 examples of the impact of political situations and unforeseen occurrences on tourism?(8)
  9. Give 4 examples of diseases that may make people fearful of travelling to certain areas? (4)
  10. Explain what the phrase tsunami means? (4)

Questions

  1. What is the difference between tourist attractions and icons?  (4)
  2. What is the reason why some attractions become icons? (2)
  3. Give an  example of an icon linked to a famous person? (2)
  4. Give 10 examples of famous world icons (20)
  5. List 4 characteristics of a successful tourist attraction (8)
  6. What does the phrase multiplier effect mean?  (4)
  7. Name two things that can be done to ensure staff obtain the skills needed to do their jobs properly?  (4)
  8. Name 7 things that make an attraction accessible? (14)
  9. Is the general appearance and upkeep of an attraction important?  (2)
  10. What are the five main areas in attraction management that impact on the success of an attraction?  (10)

Questions

  1. What does the phrase foreign exchange mean? (4)
  2. What does the phrase Gross Domestic Product mean?(4)
  3. What do you understand by the phrases strong and weak currencies? (4)
  4. Name three effects of a weak currency? (6)
  5. List the different factors that determine exchange rates? (14)
  6. List two effects a fall in the value of the South African rand has on tourism? (4)
  7. Name the two ways exchange rates are quoted? (4)
  8. What are the steps that need to be taken to determine an exchange rate? (6)
  9. List three effects of a strong currency?  (6)
  10. What is the multiplier effect and its link to the GDP? (4)

Questions

  1. What does the abbreviation EFT stand for? (2)
  2. List four advantages of using  EFTs. (8)
  3. What is a telegraphic transfer or SWIFT transfer? (4)
  4. Name one advantage of using a telegraphic transfer? (2)
  5. List four advantages of using the internet to make payments? (8)
  6. List four disadvantages of using the internet to make payments? (8)
  7. Explain what a credit card is? (4)
  8. List three advantages of using a credit card to make payments? (6)
  9. Explain the phrase foreign market share? (4)
  10. The two main categories of foreign markets are? (4) 

Questions

  1. What are the two main objectives in marketing South Africa as a destination? (4)
  2. What is the core business of South African Tourism (SAT)?  (2)
  3. Name three marketing activities that SAT undertakes? (6)
  4. What are the segments that SAT divides the market into? (14)
  5. Name two international trade expos that SAT participates in? (4)
  6. Name two local trade expos that promote South Africa? (4)
  7. Explain how SAT is funded?  (8)

Questions

  1. Explain what the phrase bottom line means? (4)
  2. Explain what the phrase triple bottom line means? (4)
  3. Name two things you can do to help water and energy management?  (4)
  4. What are the three R's in waste management?  (6)
  5. Explain what the phrase environmentally friendly building means?  (4)
  6. List three ways in which Fair Trade promotes sustainable and responsible tourism. (6)
  7. What is meant by the term Corporate Social Investment? (4)

Questions

  1. What is the concept behind World Heritage Sites?  (8)
  2. What is the role of UNESCO?  (2)
  3. What are the three types of World Heritage Sites? (6)
  4. What are the eight World Heritage Sites in South Africa? (16)

Questions

  1. Explain what the phrase customer feedback means? (4)
  2. What are the top four reasons for getting customer feedback? (8)
  3. List six methods a company can use to obtain customer feedback? (12)
  4. What steps need to be taken to analyse customer feedback? (8)
  5. List six advantages that good service delivery have on an organisation’s business profitability? (12)

Questions

  1. List six factors that contribute towards the professional image of a company? (12)
  2. List five factors that contribute towards the professional image of staff? (10)
  3. The Employment Act applies to all employers and workers, but excludes who? (8)
  4. Which details are normally included in an employment contract? (10)
  5. The Basic Conditions of Employment Act stipulates that workers should not work more than how many hours per week?  (2)
  6. The Basic Conditions of Employment Act stipulates that workers should be paid what rate for overtime? (2)
  7. Explain what the phrase code of conduct means?  (4)
  8. Give two examples of organisations in South Africa that have  codes of conduct?  (4)

Answers

Answers

  1. A global event is an organised event involving people from countries from around the world.
    There are many different types of global events and they can attract a lot of media attention.(4)
  2. The Olympic Games is the largest sporting event in the world, the FIFA Soccer World Cup is the second largest sporting event in the world, the Tour de France cycling event is the third largest sporting event in the world and is held mainly in France. (4)
  3. The word indaba is an isiZulu word meaning ‘a meeting of elders’ but is used as a general term for meetings, exhibitions, and conferences. The Tourism Indaba is South Africa’s tourism showcase. It is the largest incoming travel trade exhibition in Africa and is held annually.(6)
  4. Generation of foreign exchange income, investment, the multiplier effect as money spent by a tourist circulates through the economy, development of infrastructure in the host country, job creation, future growth in international tourism.  (12)
  5. Facilities built for the event, may not be suitable for domestic use after the event, during the event, domestic tourism in the host country normally slows down, pollution of areas in and around the places used during the event, possible security risks, it might take a long time for the country to pay off this debt, construction workers involved in building roads and other facilities in preparation for the event could lose their jobs once the construction work is completed. (12)
  6. Civil war, terrorism, general unrest. (6)
  7. Natural disasters, diseases, Tsunamis, earthquakes, Global recession, accidents. (2)
  8. Travellers who have already booked will may cancel their trips. Tourists who haven’t yet booked trips to affected areas delay their bookings,  or may go elsewhere. Tour operators avoid booking trips to affected countries. Airlines suspend their flights to affected areas. (8)
  9. Malaria, yellow fever, bird flu, swine flu.   (4)
  10. A tsunami is a series of very large ocean waves caused by an underwater earthquake or volcanic eruption which damage infrastructure, buildings, attractions, ports, coastlines and beaches.(4)

Answers

  1. Packaged tour, Escorted packaged tour, Group packaged tour, Independent packaged tour, Scheduled tours.  (10)
  2. A tourist profile is a summary of personal information and facts relevant to the tourist’s wants and expectations. The tourist profile helps the travel agent plan a tour and make sure that the needs of the tourist are met.   (4)
  3. A valid passport, a valid visa, sufficient funds to cover their stay in the country, a return ticket, or onward ticket to another country, international law requires travellers crossing the borders of countries where yellow fever is endemic, to have a yellow fever vaccination. (10)
  4. An identity number, two passport photographs, fingerprints must be taken if aged 16 years or older, a fee dependent on the type of passport applied for. (8)
  5. DST is a way of making better use of daylight by setting the clock ahead during summer months (thus losing one hour) when DST starts, and setting it back again one hour in the winter months (thus gaining one hour) when DST ends.  (4)
  6. The phrase time zone refers to any of the 24 longitudinal divisions of the earth's surface in which a standard time is kept, the primary division being that bisected by the Greenwich meridian. Each zone is 15° of longitude in width, with local variations, and observes a clock time one hour earlier than the zone immediately to the east. (4)
  7. Jet lag is a general feeling of fatigue and disorientation often experienced by travellers by jet aircraft who cross several time zones in relatively few hours.  (4)
  8. They do not drink alcoholic beverages the day before their flight, during the flight, or the day after the flight, They do not drink caffeinated beverages before, during, or just after a flight, They drink plenty of water to offset the effects of the dry air in the plane, They do not eat too much on the plane, They exercise their legs from time to time while they are seated for their flight, They get up and walk around every hour or two, They do not take sleeping pills, They do not nap for more than an hour at a time, They break up long-haul trips across many time zones, if feasible, with a stay in a city about halfway to their destination, They wear comfortable clothes and shoes, They make use of sleeping aids. (8)
  9. Earth is divided into the Northern and Southern Hemispheres by the equator, and the Eastern and Western Hemispheres by the Greenwich Meridian.(4)
  10. Step 1: Locate the place for which you already know the time and day on a time zone map.
    Step 2: Locate the place for which you wish to know the time and the day of the week on a time zone map.
    Step 3: Count the time zones between the two places
    Step 4: Calculate the time by either adding or subtracting an hour for each time zone, depending on whether you are moving east or west.
    Step 5: If you have crossed the International Date Line, identify the day. (10) 

Answers

  1. Tourist attractions are places that tourists like to visit, such as national parks and heritage sites. An icon is a tourist attraction that is world famous and comes to represent or be symbolic of the country or city in which it is located.  (4)
  2. Icons are unique and tourists find them fascinating because they are the only one of their kind in the world.  (2)
  3. Robben Island and Nelson Mandela.   (2)
  4. (Students can list any ten of the following below)
    Australia: Sydney Opera House, Ayers Rock/Uluru-Kata Tjuta National Park.
    Brazil: The Statue of Christ the Redeemer
    Canada: Niagara Falls
    Italy: The Colosseum, The Leaning Tower of Pisa, Venice, Vatican City
    Egypt: The Great Pyramids of Giza, The Sphinx
    Germany: Berlin Wall and the Brandenburg Gate, The Black Forest
    China: The Great Wall of China
    Israel: The Dome of the Rock, The Wailing Wall
    Greece: The Parthenon
    India: The Taj Mahal
    Turkey: The Blue Mosque
    France: The Eiffel Tower, The French Riviera
    Japan: Mount Fuji
    Mexico: Chichén Itzá (Yucatan)
    Jordan: Petra
    Nepal: Mount Everest
    Saudi Arabia: Mecca
    Switzerland: The Swiss Alps
    Netherlands: Mill Network at Kinderdijk, Elshout
    Peru: Machu Picchu (Cuzcu)
    Poland: Auschwitz Concentration Camp
    Portugal: The Algarve
    Spain: Alcazar of Segovia, Bullfights
    Thailand: Floating markets
    Russia: The Kremlin, Red Square
    United Kingdom: Big Ben, Buckingham Palace, Tower of London, London Bridge
    United States of America: The Statue of Liberty, The Grand Canyon.  (20)
  5. Actual number of visitors exceeds the target number of visitors, repeat visits, income generated exceeds target figures, positive impact on local community and environment.  (8)
  6. Is an effect in economics in which an increase in spending produces an increase in national/regional income and consumption greater than the initial increase. (4)
  7. Good induction programmes and continuous training.(4)
  8. Transport to the attraction, Transport at the attraction, Parking, Accommodation, Toilet facilities, Information, Support facilities and services.  (14)
  9. Yes. (2)
  10. Marketing, Income and financial management, Human resources, visitor management, Operation management.  (10)

Answers

  1. The phrase foreign exchange refers to the exchange of one currency for another, or the conversion of one currency into another currency. Foreign exchange also refers to the global market where currencies are traded virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex".   (4)
  2. The GDP is a measure of a given country’s national income. GDP is a measure of all the goods and services produced domestically, usually in a period of one calendar year. The components included are consumer spending, investment made by industry, value of exports minus value of imports, and government spending. (4)
  3. Strong currency, also known as a hard currency, refers to a currency when it is worth more relative to other currencies. A weak currency, also known as a soft currency, is a currency with value that has depreciated significantly over time against other currencies and will fluctuate erratically or depreciate against other currencies. (4)
  4. (Any three of the following below)
    • A weak currency is good for nations that have more exports than imports because their exports will become cheaper for foreign buyers.
    • A weak currency will stimulate manufacturing and export to areas with stronger currency.
    • There will be an increase in manufacturing and job creation if the demand for exports increases.
    • More foreign tourists will be able to afford to visit countries with weak currencies as it will increase their purchasing power.
    • Imports become more expensive for the countries with weak currencies.
    • Higher prices of foreign products increase the cost of living in countries with weak currencies.
    • Purchasing power weakens for people in countries with weak currencies.
    • A weak currency has a negative effect for people planning to travel to areas with a strong currency. (6)
  5. Inflation, Interest rates, Trade balance, Terms of trade, Government debt,  Political and economic instability, Employment outlook of a country. (14)
  6. It makes international travel for South Africans more expensive, It makes travelling in South Africa cheaper for foreign tourists.(4)
  7. The bank buying rate, The bank selling rate.(4)
  8. Step 1: Identify the exchange rate of the currency you need and find the ISO code. For example, the currency code of the rand is ZAR, while that of the US Dollar is USD.
    Step 2: Look up the exchange rate for your two currencies.
    Step 3: Calculate the exchange rate by looking at a currency pair (two currencies). The first currency in the pair, known as the base currency, is the transaction currency and the second currency is the payment currency. (6)
  9. (Any of the three below)
    • Imports become cheaper for the countries with strong currencies.
    • Imported products and services, especially fuel, become more affordable.
    • Exports become more expensive. Countries with strong currencies will export less as the demand will decrease.
    • Domestic manufacturing will decrease as there is less demand from both the domestic and foreign markets.
    • Fewer foreign tourists will be able to afford to visit countries with strong currencies as it will decrease their purchasing power.
    • Purchasing power strengthens for people in countries with strong currencies.
    • A strong currency has a positive effect for people planning to travel to areas with a weak currency.  (6)
  10. Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending. (4)

Answers

  1. Electronic fund transfer   (2)
  2. It is safe and secure, It is efficient and fast, It is less expensive than paper cheque payments and collections, Money can be transferred throughout the world. (8)
  3. Telegraphic transfers  are a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office. Wire transfer systems are intended to provide more individualized transactions than bulk payment systems.  (4)
  4. (One of the two listed below)
    If you are stuck overseas without cash, someone at home can send you money electronically within a day OR You do not need Internet banking as the banks send the information directly to each other. (2)
  5. They can save time, No need to stand in long queues to pay a bill, People can log into their accounts at any time to get an up-to-date statement of their transactions, Low transaction costs/fees. (8)
  6. No internet access can cause late payments, There is no direct contact with the business from which a product or service is purchased, Computer crimes may result in money being stolen, Criminals record a user’s keystrokes and then use this information to illegally access accounts. (8)
  7. A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating.  (4)
  8. Cards can be used to buy expensive items as the debt can be paid off over time, They avoid having to carry large amounts of cash, Most businesses accept credit cards as a form of payment.(6)
  9. Foreign market share is the portion of the inbound tourism market that a specific country controls and includes both the number of tourists and the amount they spend. (4)
  10. Land markets and air markets.(4)

Answers

  1. Increase in annual volume of foreign arrivals to South Africa and increase in international awareness of South Africa as a travel destination. (4)
  2. Marketing South Africa as a destination, both domestically and internationally.  (2)
  3. Participation in major travel shows both locally and internationally, Advertising, public relations and direct mailing campaigns, Holding educational work sessions with the international partners of South Africa’s travel industry.   (6)
  4. Core markets, investment markets, tactical markets, watch-list markets, markets of strategic importance and strategic air link or hub markets.  (14)
  5. ITB (Berlin) and the World Travel Market (London)  (4)
  6. Tourism Indaba and the Getaway Show.  (4)
  7. SAT needs a great deal of funding because international marketing is expensive. Tourism Marketing Levy South Africa (TOMSA) was set up in 1998 to raise additional funds for the marketing of destination South Africa. It is a private sector initiative. South African Tourism (SAT) makes use of these funds to promote the country as a preferred tourist destination, both locally and internationally.
    The TOMSA levy is 1% of each confirmed booking. The collection of the TOMSA levy by tourism businesses is voluntary. The amounts paid are not the same as paying a tax to the business. The tourist pays the levies and the business just acts as a collector of the levies. These levies are paid to the Tourism Business Council of South Africa (TBCSA), which administrates TOMSA. (8)

Answers

  1. The phrase bottom line refers to the bottom line of a financial statement, called the income statement. This line shows how much profit a company has made in a particular period.(4)
  2. As international tourism continues to grow, governments have realised that tourism has more than just an economic impact on a country. Tourism also has social (people) and environmental (planet) impacts. These two aspects are added to the economic (profit) aspect to form the triple bottom line approach. If profit was the only objective, human and natural resources could be exploited so  balanced approach is required.  (4)
  3. Turning of unused appliances and fixing leaking taps.   (4)
  4. Reduce, re-use and re-cycle.  (6)
  5. Environmentally friendly building is the construction and design of new buildings, such as hotels, which are designed to have the minimal negative impact on the environment both during building and once operational.   (4)
  6. (Any three below)
    Creating awareness of sustainable tourism issues, Researching better ways of implementing and planning sustainable tourism, Advocacy of sustainable tourism issues to tourism authorities, Building capacity through training, facilitating a tourism Fair Trade certification programme, the first of its kind in the world.   (6)
  7. Corporate social investment is how companies help their communities. They set aside money, time or expertise for local nonprofit organizations to use to provide solutions for significant social problems.   (4)

Answers

  1. Heritage is the legacy preserved by past generations for future generations. In order to be given World Heritage status, sites must have outstanding natural, cultural or historical value and meet at least one of UNESCO’s ten selection criteria. A country can apply to the UNESCO World Heritage
    Committee for a site to be proclaimed a World Heritage Site. A place that is declared a World Heritage Site is proclaimed by the Minister of Environmental Affairs and Tourism by notice in the Government Gazette and thereafter included in the World Heritage List. An example is Robben Island. (8)
  2. UNESCO is responsible for the protection and development of heritage.  (2)
  3. Cultural: sites accorded the status on the basis of their tangible and intangible cultural heritage Natural: sites accorded status on the basis of their natural heritage
    Mixed:  sites accorded status on the basis of both cultural and natural heritage.(6)
  4. Mapungubwe Cultural Landscape, Cradle of Humankind, Richtersveld Cultural and Botanical Landscape, Robben Island, iSimangaliso (Greater St Lucia) Wetland Park, Vredefort Dome, uKhahlamba/Drakensberg Park, Cape Floral Region. (16)

Answers

  1. Customer feedback  is information coming directly from customers about the satisfaction or dissatisfaction they feel with a product or a service. Customer comments and complaints given to a company are an important resource for improving and addressing the needs and wants of the customer. The information is procured through written or oral surveys, online forms, emails, letters, or phone calls from the customer to the company. (4)
  2. Innovation, External performance feedback, Retaining customers, Advance warning in customer trends.  (8)
  3. Surveys, Questionnaires, Feedback cards, Follow-up calls, SMS messages on cell phones, Web-based responses.  (12)
  4. Study the feedback, Identify most common complaints, Decide on an action plan, Start the intervention process. (8)
  5. Increased sales, Customer loyalty, Enhanced public image, More effective employees, Motivated staff members, Reduced marketing costs.(12)

Answers

  1. Company image, Company staff, Physical appearance and product packaging, Company customer policies, Marketing material, Company environmental policies.(12)
  2. Uniforms, Appropriate dress code, Good personal hygiene and grooming, Interaction with customers, Good communication skills.  (10)
  3. The National Defence Force, The National Intelligence Agency, The South African Secret Service, Unpaid volunteers working for charity. (8)
  4. Employer and employee details, Employment details, Payment details, Leave details, Notice/contract period. (10)
  5. Workers are not allowed to work more than 45 hours a week or nine hours a day. (2)
  6. Overtime must be paid at 1,5 times the normal wage.  (2)
  7. A code of conduct is a set of rules outlining the responsibilities of or proper practices for an individual, party or business. The code of conduct thus takes the aims and objectives of the organisation into account. The code of conduct contains procedures to follow in certain situations and requires certain behaviours.(4)
  8. South African National Parks and the Southern Africa Tourism Services Association (SATSA). (4)

Term 1

Topic 1 Domestic, regional and international tourism

Overview
This topic introduces you to tourism and the impact of global events on the tourism industry as well as the positive and negative effects for a country of hosting an event of global significance.
In this topic you will learn about:

  • Global events of international significance
  • The positive and negative impact of global events on international tourism
  • The impact of hosting a global event on domestic tourism in the host country
  • The impact of hosting a global event on the economy of the host country
  • The advantages and disadvantages of hosting global events for the host country
  • Political situations and unforeseen occurrences of international significance
  • The impact of these situations and occurrences on international tourism and the economy of the affected country.

Global events of international significance

  • Definition of a global event
  • Types of events
  • The impact of global events on international tourism
  • The impact of hosting a global event on the host country
  • The advantages and disadvantages for the host country

 

Political situations and unforeseen occurrences of international significance
The concepts
Examples of recent political situations
Examples of unforeseen occurrences
The impact of political situations and unforeseen occurrences on international tourism and the economy of the affected country

Unit 1 Global events of international significance

1. What is a global event?

A global event is an organised event involving people from countries from around the world. There are many different types of global events and they can attract a lot of media attention.

1.1 Sporting events
Sports tourism refers to travel which involves either viewing or participating in a sporting event staying apart from their usual environment. Sport tourism is a fast growing sector of the global travel industry and equates to 600 billion dollars a year. Sport event tourism refers to the visitors who visit a city to watch events.  An example of this would be during the Olympics. Each Olympic host city receives an immense amount of tourism.
Examples of major international sporting events include:

  • The Olympic Games is the largest sporting event in the world.
  • The FIFA Soccer World Cup is the second largest sporting event in the world.
  • The Tour de France cycling event is the third largest sporting event in the world and is held mainly in France.
  • Wimbledon is a prestigious annual international tennis championship played in the London suburb of Wimbledon.
  • The Comrades Marathon is the world’s largest ultra-marathon. It takes place annually in May or June between Pietermaritzburg and Durban in KwaZulu-Natal.

1.2 Other events
The G8 Summit: This forum is for the governments of eight of the world's largest economies France, the United States of America, the United Kingdom, Russia, Germany, Japan, Italy, and Canada (It excludes, however, two of the actual eight : China, 2nd, and Brazil, 7th). In recent years the ‘Plus Five’ countries Brazil, the People’s Republic of China, India, Mexico, and South Africa, have participated as guests.
Summits on climate change: Summits on climate change try to find ways to cut down on global carbon emissions and pollution. In 2000 the Southern African Economic Summit was held in Durban. In 2011 the UN Climate Change Summit was also held in Durban.
Tourism Indaba: The word indaba is an isiZulu word meaning ‘a meeting of elders’ but is used as a general term for meetings, exhibitions, and conferences. The Tourism Indaba is South Africa’s tourism showcase. It is the largest incoming travel trade exhibition in Africa and is held annually.

2. The impact of global events on international tourism

2.1 Positive impacts

  • Short term economic benefits include higher spending at hotels, restaurants and shops, and the creation of temporary jobs
  • Longer-term economic benefits include increased international tourism and increased investment resulting from improved global name recognition due to media coverage.
  • Creates a positive impact on the long term association people have with the host.

2.2 Negative impacts

  • It might take a long time for the country to pay off the debt incurred in hosting the event.
  • Facilities, such as sports stadiums, that are especially built for the event may not be suitable
    for domestic use after the event.
  • Other facilities built to host the international tourists who attended the event may stand
    empty if the number of tourists declines after the event.

3. The impact of hosting a global event on the host country

The legacy left behind after the event can improve the long-term well-being and lifestyle of citizens in the host country. This contributes enormously to nation building as we saw in South Africa when we hosted the 2010 FIFA World Cup.

3.1 Impact on domestic tourism in the host country
Domestic tourism slows down in the host country during a major global event such as the Olympic Games, FIFA World Cup or Tour de France because during a global event foreign tourists displace local tourists from the most popular tourist attractions.

3.2 The impact on the economy of the host country
Hosting global events can have the following positive impacts:

  • Generation of foreign exchange income
  • Investment
  • The multiplier effect as money spent by a tourist circulates through the economy
  • Development of infrastructure in the host country
  • Job creation
  • Future growth in international tourism.

Hosting global events can have the following negative impacts:

  • Facilities built for the event, may not be suitable for domestic use after the event
  • During the event, domestic tourism in the host country normally slows down
  • Pollution of areas in and around the places used during the event
  • Possible security risks
  • It might take a long time for the country to pay off this debt
  • Construction workers involved in building roads and other facilities in preparation for the
    event could lose their jobs once the construction work is completed.

Unit 2 Political situations and unforeseen occurrences of international significance

1. Concepts

1.1 Political situations
Political situations are events that are linked to the political circumstances within a country or region for example civil war or terrorism.

1.2 Unforeseen occurrences
Unforeseen occurrences are events that happen without any warning such as earthquakes and natural disasters.

2. Examples of recent political situations

A tourists perceptions of political instability and safety in a country will affect their decisions about whether or not to travel there.

2.1 Civil war
A civil war is a war between opposing groups of citizens of the same country. Civil wars have recently occurred in Libya, Egypt, Somalia and Kenya.

2.2 Terrorism
Terrorism is the use of violent acts to achieve a political goal. One of the most significant terrorist attacks in recent years was the September 11, 2001 attacks on the World Trade Centre in New York.

2.3 General unrest
Unrest is an uneasy or troubled condition. General unrest in Zimbabwe has stopped almost all of the tourism into that country.

3. Examples of unforeseen occurrences

3.1 Tsunamis
A tsunami is a series of very large ocean waves caused by an underwater earthquake or volcanic eruption which damage infrastructure, buildings, attractions, ports, coastlines and beaches.

3.2 Earthquakes
An earthquake is a sudden and violent shaking of the ground caused by movements within the earth’s crust or volcanic activity, and can cause great destruction.

3.3 Natural disasters
A natural disaster is an event caused by the forces of nature such as a tornado and can cause great destruction.

3.4 Global recession
A global recession is a period of general economic decline around the world and has a direct impact on tourism demand because people have less disposable income to spend.

3.5 Diseases
A disease is an abnormal condition which interrupts the normal bodily functions leading to feelings of pain and weakness. Diseases such as malaria, yellow fever, and more recently bird flu and swine flu, not only make travelling fearful of visiting certain areas.

3.6 Accidents
Transport accidents can have a negative impact on tourist numbers as they affect the safety image of a destination.

3.7 Economic upsets
Tourism establishments such as hotels and tourist attractions can experience economic upsets when they have financial trouble or difficulty as a result of low visitor numbers.

4. The impact of political situations and unforeseen occurrences on international tourism and the economy of the affected country

The impact of reduced tourism on a country’s economy can be disastrous: it may lead to increased unemployment, homelessness, deflation, crime, and other social and economic problems. Examples include:

  • Travellers who have already booked will may cancel their trips
  • Tourists who haven’t yet booked trips to affected areas delay their bookings or may go elsewhere
  • Tour operators avoid booking trips to affected countries
  • Airlines suspend their flights to affected areas.

Questions

  1. What do you understand by the phrase global event? (4)
  2. Name two of the biggest sporting events in the world? (4)
  3. What do you understand by the phrase tourism indaba? (6)
  4. List six positive effects for a country hosting a global event?  (12)
  5. List six possible negative impacts for a country hosting a global event? (12)
  6. Name three examples of political instability and safety in a country which might affect a tourists decisions about whether or not to travel there? (6)
  7. Give an example of an unforeseen circumstance that could affect tourism?  (2)
  8. Give 4 examples of the impact of political situations and unforeseen occurrences on tourism?(8)
  9. Give 4 examples of diseases that may make people fearful of travelling to certain areas? (4)
  10. Explain what the phrase tsunami means? (4)

Topic 2 Map work and tour planning

Overview

Planning is very important in any industry and more so in the tourism industry than most because attention to detail makes the difference between a successfully planned our and an unsuccessful one.

In this topic you will learn about:

  • Tour plans and route planning
  • Compiling a day-by-day itinerary
  • Compiling a tour budget
  • The concepts World Health Organisation, health certificates, travel clinics, compulsory and recommended vaccinations
  • Health and safety precautions for tourists travelling to high-risk destinations
  • Required travel documentation for tourists travelling between countries
  • Customs regulations when departing from or arriving in South Africa
  • The concepts duty free goods, prohibited goods, green channel, red channel, to declare, travel allowances
  • World time zones and daylight saving time
  • The impact of time zones and daylight saving on travel planning
  • Calculating arrival and departure times with and without daylight saving time
  • Jet lag and jet fatigue.

Tour plans and route planning

  • Developing tour plans

Compiling a tour budget

  • Factors influencing the development of a budget
  • A basic tour budget

Travel documentation

  • Required travel documents
  • An international driver’s permit (IDP)
  • Passports
  • Visas
  • Completing an application form
  • Concepts
  • Customs regulations

World time zones

  • Concepts
  • Introduction to a world time zone map
  • Daylight saving time (DST)
  • The impact of time zones and DST on
  • travel planning and travelling

Compiling a day by day itinerary

  • The main aspects of an itinerary
  • Requirements of logical itinerary planning
  • Drawing up itineraries according to different scenarios
  • Vaccination required for entering / leaving areas of high risk
  • TB and HIV and AIDS risks for inbound tourists
  • Recommended health precautions when visiting health risk areas

2. Safety of tourists

  • Reasons why the safety of tourists in South Africa is important
  • General safety precautions for tourists

Calculations of world times when travelling between countries

  • Calculating arrival, departure and flying time
  • Jet lag and jet fatigue

Unit 1 Tour plans and route planning

1. Developing tour plans

People travel for many different reasons. Whatever the reason if it is well planned it is more likely to be successful.

1.1 What is a tour plan?
A good tour plan should indicate:

  • The route the tour will follow
  • The length of the tour
  • The mode of transport
  • The type of accommodation
  • The meals and drinks offered
  • The places of interest and attractions visited
  • Leisure time for the tourist
  • The dates of the tour
  • Cost of the tour (budget).

1.1.1 Types of tours
Packaged tour: Is also known as an inclusive tour because the price is all-inclusive. The itinerary for a packaged tour is planned in advance.
Escorted packaged tour: A tour guide escorts the tour and takes care of all services from the beginning to the end of the tour.
Group packaged tour: These tours are popular with first time travellers and for tourists who prefer to travel in a group. The itinerary is set and cannot be changed and because the tour was organised for large groups of tourists makes the tour more affordable.
Independent packaged tour: These tours are planned to meet the individual needs of the tourist and are flexible and can be changed if necessary.
Scheduled tours: Scheduled tours have a timetable with set departure and arrival times.

1.3 Tourists profiles
A tourist profile is a summary of personal information and facts relevant to the tourist’s wants and expectations. The tourist profile helps the travel agent plan a tour and make sure that the needs of the tourist are met.

1.4 Available budget
A tour budget is calculated using the costs of the different tour components. They include:

  • Transport
  • Accommodation
  • Meals included in the tour
  • Attractions, including entrance fees, permits and optional extras
  • Additional costs, including airport tax, service charge, etc...

1.5 Available time
When developing a tour plan, it is important to consider how much time a tourist has available.
Steps need to be taken to avoid wasting time while also ensuring tourists have adequate leisure and relaxation time.

2. Route planning

Route planning involves choosing the best way to travel to all the destinations identified in the tour plan. The distances between the places visited en route must be taken into account.
The following will help to develop a logical route plan:

  • Knowledge of the geography of the region
  • A variety of maps
  • Distance tables to determine distances between major cities
  • GPS
  • Computers or smart phones
  • Tour brochures, travel guidebooks, and travel magazines.

3. Choice of transport and accommodation to suit customers needs and preferences

3.1 Transport
Tour plans use a variety of transport options for each leg of a tour. Examples include cars, buses, planes, etc...
A customer’s choice of transport may also be influenced by how environment friendly they are. They might take into account by these facts:

  • Fuel emissions from motorised vehicles are harmful to the environment
  • Aircraft emit CO2 and other greenhouse gases into the upper atmosphere
  • Oil, black water, greywater, rubbish, hazardous waste, ballast water, diesel and CO2 from cruise liners pollute the sea and harm coral reefs and marine life.

3.2 Accommodation
Most countries offer a wide range of accommodation options ranging from luxury safari lodges to backpackers hostels. The type of establishment chosen by the tourist is influenced by a combination of factors, including:

  • The type of accommodation required
  • The quality of accommodation required
  • The desired location
  • The availability of the accommodation
  • Their budget.

4. Choice of tourist attractions and activities to suit tourists profiles

4.1 Attractions
When planning a tour the interests and preferences of the customers will determine the choice of attractions. The attractions offered on a tour plan are often one of the main reasons why a customer will select one tour plan above another.

4.2 Activities
The popularity of a tour plan depends on the activities that are available at the attraction sites and destinations. Tourists enjoy and remember a tour if they participate in and experience these activities.

Unit 2 Compiling a day-by-day itinerary

A tour plan gives general information about a tour. The specific, detailed information is presented in an itinerary which is a written day-by-day schedule of the dates, times, transport, accommodation, and activities that will make up the trip.
There are three different types of itineraries:

  • Specific itineraries are drawn up with a target market in mind
  • A general itinerary appeals to the overall market
  • A personal itinerary is drawn up for an individual tourist.

1. The main aspects of an itinerary

The main aspects to be considered in an itinerary are:

  • Transport
  • Accommodation
  • Attractions (natural and human-made)
  • Activities (at natural and human-made attractions)
  • Stops for meals and refreshments.

2. Factors to consider when drawing up an itinerary

Factors to consider when drawing up an itinerary include:

  • Time
  • Tour objectives
  • Tourists needs and preferences
  • Tour information
  • Tour route
  • Tour sequence
  • Tour budget.

3. Drawing up itineraries according to different scenarios

3.1 Presentation of an itinerary

  • The layout of the itinerary must be neat, clear and interesting
  • Use the 24-hour clock to indicate time
  • Write the itinerary as if you were talking to the tourist
  • Do not make promises you cannot guarantee
  • Mention interesting facts
  • Use adjectives to describe places.

3.2 Format of an itinerary
A general itinerary may be presented in paragraph form or in tabular form.

Unit 3 Compiling a tour budget

A tour budget is a document that specifies all the costs of a tour and helps you plan accordingly.
Establishing what the tour will cost is important as the cost will determine who will be able to afford
to go on it.

1. Factors influencing the development of a budget

The development of a tour budget is dependent on a combination of factors such as:

  • The type of tour
  • The tour group
  • Transport
  • Accommodation
  • Sundry expenses.

2. A basic tour budget

A basic tour budget shows what the tour will cost, what this includes and excludes and the cost of the optional extras. 

Unit 4 Health and safety

In order to reduce the risk of contracting a disease, tourists should obtain advice on the possible health risks in the areas to which they are travelling. Other possible health risks include the effects of unusual climatic conditions, contact with insects and animals, and physical injuries.

1. Concepts related to health

1.1 World Health Organisation (WHO)
The WHO is a specialized agency of the United Nations (UN) that is concerned with international public health. It was established on 7 April 1948, with headquarters in Geneva, Switzerland. Since its creation, WHO has been responsible for playing a leading role in the eradication of smallpox. Its current priorities include communicable diseases, in particular, HIV/AIDS, malaria and tuberculosis; the mitigation of the effects of non-communicable diseases; sexual and reproductive health, development, and aging; nutrition, food security and healthy eating; occupational health; substance abuse; and drive the development of reporting, publications, and networking.

1.2 Health certificates
Global travel on this scale exposes tourists to a range of health risks. Many of these risks can be reduced by taking precautions before the start of a journey.
A health certificate is an official document that is issued and signed by a health authority. It confirms that an individual has received the vaccine or prophylactic as indicated on the certificate.

1.3 Travel clinics
The spread of infectious diseases from one part of the world to another is not something new but it remains a concern. Travel clinics providing up-to-date specialised international travel healthcare.

1.4 Vaccinations
Millions of deaths have been avoided because of worldwide immunisation programmes against infectious diseases. For tourists this is important as safe and effective vaccines help to reduce the possibility of contracting a disease when travelling to high-risk destinations.
Compulsory vaccinations: The WHO decides which vaccinations are compulsory.
Recommended vaccinations: These vaccinations are not enforced but are recommended as a precaution.

2. Precautions to take when travelling to high-risk destinations

Destinations are considered high-risk if they are in regions that pose a threat to the health of the tourist. Areas where malaria, bilharzia and cholera are found are high-risk destinations. 

2.1 A region known to have malaria
Malaria is a potentially fatal disease transmitted by the bite of mosquitoes. 
Precautions that can take when travelling in malaria-infested areas include:

  • Taking anti-malarial prophylactics
  • Avoiding being outdoors at night
  • Wearing clothing that conceals as much of the body as practical
  • Spraying sleeping areas with mosquito repellent
  • Sleeping under a mosquito net
  • Burning insecticide coils or using electronic vaporizing mats
  • Avoiding still water areas and dark damp places.

2.2 A region known to have bilharzia
Bilharzia is also known as schistosomiasis and is caused by parasites that contaminate fresh water, especially when infected people urinate or defecate in the water.
Precautions are necessary when travelling in areas known to have bilharzia:

  • Avoid swimming or wading in dams and rivers
  • Drink only boiled or filtered water
  • Bath in hot water that is at least 65 °C, to destroy possible parasites on the skin
  • Dry vigorously with a towel to prevent the parasite from penetrating the skin.

2.3 A region known to have cholera
Cholera is a bacterial disease transmitted mainly through contamination of food and water in areas where there is poor sanitation and hygiene.
Tourists in areas where cholera has occurred should observe the following precautions:

  • Drinking water should be boiled, sterilised or filtered
  • Foods must be well cooked and eaten hot
  • Avoid undercooked or raw fish and shellfish
  • Avoid local salads as they may carry cholera-infected water
  • Avoid foods and beverages from street vendors
  • Swim only in chlorinated swimming pools.

3. Vaccinations required for entering/leaving areas of high risk

Proof of vaccination is often required for tourists travelling into or from countries with a high risk of an infectious disease. An example is a yellow fever vaccination.

4. TB and HIV and AIDS risks for inbound tourists

4.1 The risk of TB for inbound tourists
Tuberculosis (TB) is a preventable and curable infectious bacterial disease. It is prevalent in South Africa. Examples of behaviours of inbound tourists that increase their likelihood of being exposed to the risk of TB include:

  • Traveling on a flight lasting longer than eight hours while being seated within two rows of an infected passenger
  • Using overcrowded, public transport and accommodation options
  • Spending time in poorly ventilated and overcrowded environments, such as indoor events and festivals.

4.2 The risk of HIV and AIDS for inbound tourists
Tourists must be aware of the risk of HIV and AIDS when they travel as there is no vaccine available to prevent infection.

5. Recommended health precautions when visiting health risk areas

The WHO recommends six general health precautions for tourists visiting health risk areas. Their six ‘I’s’ are:

  • Insects: Have repellents and medication available
  • Ingestion: Drink bottled water and eat uncontaminated food
  • Indiscretion: Prevent HIV
  • Injury: Carry a traveller’s first aid kit. Apply sun block
  • Immersion: Avoid swimming in fresh water rivers and dams
  • Insurance: Use preventative medicine and have medical insurance.

The safety of tourists when they are in South Africa is important for the following reasons:

  • Tourism generates income
  • Tourism creates jobs
  • Infrastructure development
  • Community development.

Unit 5 Travel documentation

Tourists need travel documents to gain entry into a country for security, health, safety, and identification. These documents change from country to country.

1. Required travel documents

The following travel documents are required for entry into a country:

  • Passport
  • Visa
  • Health certificates for certain countries.

1.1 Valid passport
A passport is an official government document that certifies one's identity and citizenship and permits a citizen to travel abroad.
There are different kinds of passports:

  • Tourist passports that consist of 32 pages
  • Maxi tourist passports with 48 pages for frequent travellers
  • Official passports
  • Diplomatic passports
  • Temporary passports.

An official passport is  issued to someone who is travelling internationally on official business for the country and is usually a different colour from regular passports. A diplomatic passport is issued to someone who will travel internationally on official state business such as diplomats and consuls when they are posted to foreign countries. A temporary passport is issued to South African citizens who have applied for a regular passport but need to travel urgently before the regular passport can be issued.

1.2 Visa
A visa is an endorsement on a passport indicating that the holder is allowed to enter, leave, or stay for a specified period of time in a country. A visa application must usually be made before departure as visas are not often issued at ports of entry.
Examples of different kinds of visas are:

  • Visitor visas
  • Transit visas
  • Diplomatic visas
  • Courtesy visas
  • Official visas.

1.3 Health certificates
A health certificate is an official document that is issued and signed by a health authority which confirms that an individual has received the vaccine as indicated on the certificate.

1.4 Requirements for tourists travelling between countries
Tourists must have proof of the following before travelling between countries:

  • A valid passport
  • A valid visa
  • Sufficient funds to cover their stay in the country
  • A return ticket, or onward ticket to another country
  • International law requires travellers crossing the borders of countries where yellow fever is
    endemic, to have a yellow fever vaccination.

2. An international driver’s permit (IDP)

An IDP is a document recognized by many countries which allows the permit-holder to drive a private motor vehicle in that country. The Automobile Association of South Africa (AA) has the authority to issue the permit. An IDP can be obtained directly from any AA Autoshop or AA Travel Experience Store in South Africa.

3. Passports

3.1 Requirements for obtaining a passport
To apply for a passport the following is required in South Africa:

  • An identity number
  • Two passport photographs
  • Fingerprints must be taken if aged 16 years or older
  • A fee dependent on the type of passport applied for.

4. Visas

4.1 Requirements for obtaining a visa
The basic requirements to qualify for a visa include:

  • A valid, acceptable passport
  • Sufficient funds for the duration of the stay
  • A return or onward travel ticket
  • Identity photographs, as per requirement of the country for which application is made
  • Blank pages in the passport as per requirement of country
  • A yellow fever certificate if the applicant passes through a high risk area
  • A statement and/or documentation confirming the purpose and duration of the visit
  • Payment of the prescribed fee in the currency of the country in which the application is made
  • In the case of children, proof of guardianship or custody, or consent from the guardian must be provided
  • A completed visa application form. 

5. Concepts

All travellers arriving at South Africa’s ports of entry, whether by land, sea or air, are required to pass through immigration control before collecting their baggage. The South African Department of Home Affairs provides this service. Travellers then pass through customs control where their baggage may be X-rayed or examined by customs officers. After passing through immigration control travellers collect their baggage. They then have a choice of two channels. By selecting the green channel, a traveller indicates that they have no goods to declare, in other words, they have no prohibited or restricted goods, and no goods in excess of the duty free allowances.

5.1 Duty free goods
Duty free goods are those goods that travellers are allowed to bring into South Africa without paying customs duty or value-added tax (VAT).

5.2 Prohibited goods
Prohibited goods refer to those goods that travellers are not allowed, by law, to bring into South Africa such as illegal drugs.

5.3 Travel allowances
This refers to how much money a traveller is allowed to take out of South Africa. These transactions are subject to exchange control regulations, governed by the South African Reserve Bank.

Unit 6 Time zones

1. Concepts

1.1 Time zone
The phrase time zone refers to any of the 24 longitudinal divisions of the earth's surface in which a standard time is kept, the primary division being that bisected by the Greenwich meridian. Each zone is 15° of longitude in width, with local variations, and observes a clock time one hour earlier than the zone immediately to the east.
Most countries have only one time zone, for example, South African. More than one time zone may apply if countries extend across many degrees of longitude.

1.2 UTC (Universal Time Coordinate)
UTC is the primary time standard by which the world regulates clocks and time. It is one of several closely related successors to Greenwich Mean Time (GMT).

1.3 Greenwich
The 0º line of longitude passes through Greenwich in London, England. This line divides Earth into the Western and Eastern Hemispheres and is also known as the prime meridian.

1.4 Hemispheres
Earth is divided into the Northern and Southern Hemispheres by the equator, and the Eastern and Western Hemispheres by the Greenwich Meridian.

1.5 Equator
The equator is the 0º line of latitude. It is located at equal distance from the North and South Poles and divides Earth into the Northern and Southern Hemispheres.

1.6 Seasons
Seasons are the four divisions of the year: spring, summer, autumn and winter. The four seasons are the result of Earth’s changing position with the sun.

1.7 Standard time
The local time at the standard meridian of a country is called standard time. Standard time is the same for all places in that particular country and is calculated from Greenwich.

1.8 Local time
Local time is the specific time at any given place. is the time everyone in an area agrees upon as the local time.

1.9 The International Date Line (IDL)
The International Date Line (IDL) is an imaginary line on the Earth’s surface at 180° longitude.

1.10 The 24-hour clock
The 24-hour clock is a convention of time keeping in which the day runs from midnight to midnight and is divided into 24 hours, indicated by the hours passed since midnight, from 0 to 23. This system is the most commonly used time notation in the world today.

1.11 Latitude and longitude
A geographic coordinate system is a coordinate system that enables every location on the Earth to be specified by a set of numbers. They lie east and west of the Greenwich Meridian and divide the world into 24 time zones.

2. Introduction to a world time zone map

The map shows the different time zones around the world.
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3. Daylight saving time (DST)

DST is a way of making better use of daylight by setting the clock ahead during summer months (thus losing one hour) when DST starts, and setting it back again one hour in the winter months (thus gaining one hour) when DST ends.
Reasons for implementing daylight saving time are:

  • Some countries feel they can make better use of the extra daylight in the evenings.
  • Some countries are of the opinion that fewer road accidents and injuries occur because of better visibility.
  • The extra hour of daylight in the evening can give children more time for social activities.
  • The extra hour of daylight in the evening may boost the tourism industry as it creates an opportunity to increase participation in outdoor activities.
  • It can help to save energy and reduce artificial lighting during the evening hours.

4. The impact of time zones and DST on travel planning and travelling

Time zone differences must be taken into account during long flights eastward or westward because an hour is lost for each time zone that is crossed when flying eastwards.
Travellers must be familiar with the time changes, especially when flying east or west across time zones. They must know when a country has DST and whether they will be crossing the International Date Line as this can affect the times of flight changes, catching trains, etc...

Unit 7 Calculations of world times when travelling between countries

1. Calculating arrival, departure and flying time

1.1 Determining the time and day in a different time zone
Step 1: Locate the place for which you already know the time and day on a time zone map.
Step 2: Locate the place for which you wish to know the time and the day of the week on a time zone map.
Step 3: Count the time zones between the two places
Step 4: Calculate the time by either adding or subtracting an hour for each time zone, depending on whether you are moving east or west.
Step 5: If you have crossed the International Date Line, identify the day.

1.2 Calculating arrival, departure and flying time
Time difference calculations are also important when calculating arrival, departure, and flying times.

1.3 Calculating time using DST
When DST applies to countries one has to add an hour to the time zone for countries to the east and subtract an hour for countries to the west.

2. Jet lag and jet fatigue

2.1 Definition of jet lag
Jet lag is a general feeling of fatigue and disorientation often experienced by travellers by jet aircraft who cross several time zones in relatively few hours.

2.2 Symptoms of jet lag
The main cause of jet lag is the inability of the body to immediately adjust to the time in a different zone.
Other factors that contribute to jet lag are:

  • The food and drinks consumed during the flight
  • Cabin pressure, which causes leg swelling and tiredness
  • Stale air in the plane, which cause tiredness, irritability and headaches
  • Lack of exercise during the flight
  • Lack of sleep during the flight.

2.3 How to minimise and ease the effects of jet lag
Before the flight, travellers should make sure:

  • They are in good physical shape and that they eat correctly before their trip.
  • They are well informed about any medical condition from which they suffer.
  • They begin adjusting their bodies to the new time zone before they leave if their stay
    in the destination time zone will last more than a few days.
  • They try to go to sleep and get up earlier if they are travelling east.
  • They get a good night’s sleep the night before departure.

During the flight, travellers should make sure:

  • They do not drink alcoholic beverages the day before their flight, during the flight, or the day after the flight.
  • They do not drink caffeinated beverages before, during, or just after a flight
  • They drink plenty of water to offset the effects of the dry air in the plane.
  • They do not eat too much on the plane
  • They exercise their legs from time to time while they are seated for their flight
  • They get up and walk around every hour or two.
  • They do not take sleeping pills.
  • They do not nap for more than an hour at a time.
  • They break up long-haul trips across many time zones, if feasible, with a stay in a city about halfway to their destination.
  • They wear comfortable clothes and shoes.
  • They make use of sleeping aids.

After the flight travellers should make sure:

  • They try and get at least an hour’s worth of sunlight as soon as possible after reaching their destination if they are travelling west.
  • They check, on arrival, whether beds and bathroom facilities at their accommodation are satisfactory
  • They adapt to the local schedule as quickly as possible to help their bodies adjust faster.
  • They try to establish sleeping patterns according to the time at their destination without resorting to sleeping pills.

Questions

  1. List 5 different types of tours?  (10)
  2. What does the phrase tourist profile mean?  (4)
  3. Name 5 requirements for tourists travelling between countries? (10)
  4. What are the requirements for obtaining a passport in South Africa?  (8)
  5. What does the phrase daylight saving time mean? (4)
  6. What does the phrase time zone mean? (4)
  7. What does the phrase jet lag mean?   (4)
  8. Name 4 things travellers can do during the flight to minimise jet lag? (8)
  9. What does the phrase hemisphere mean? (4)
  10. List the 5 steps that can be taken to determining the time and day in a different time zone? (10)

Term 2

Topic 1 Domestic, regional and international tourism

Overview

This topic examines the different world famous icons of different countries, their locations and why they are tourist attractions.
In this topic you will learn about:

  • The difference between a tourist attraction and an icon
  • The reasons why specific tourism attractions are regarded as icons
  • Profiles and statistics of tourists visiting these icons
  • The economic significance of icons for a country or area
  • World famous icons and attractions in different countries of the world
  • The location of the world famous icons and attractions on a map
  • The reasons why these attractions are considered to be world famous icons
  • Interesting facts about these icons. 

Units 1-4 Famous world icons and attractions

  • The difference between tourist attractions and icons
  • Reasons why some attractions become icons
  • Profiles of tourists visiting icons
  • Statistics of tourists visiting icons
  • Famous world icons

Successful tourist attractions

  • Factors contributing to the success of a tourist attraction
  • Characteristics of a successful tourist attraction 

Units 1-4 Famous world icons and attractions

In your learner book units 1-4 of topic 1 term 2 deal with the different icons that are tourist attractions in different countries. You need to make sure that you know what icon belongs to which country.

1. The difference between tourist attractions and icons

Tourist attractions are places that tourists like to visit, such as national parks and heritage sites. An icon is a tourist attraction that is world famous and comes to
represent or be symbolic of the country or city in which it is located. Icons can be human-made or natural. A World Heritage Site is a place such as a forest, mountain, lake, desert, monument, building, complex, or city that is listed by UNESCO as being of special cultural or physical significance.

2. Reasons why some attractions become icons

Icons are unique and tourists find them fascinating because they are the only one of their kind in the world. Many icons are also proclaimed as World Heritage Sites by UNESCO because of their special cultural or physical significance.  Sometimes an icon provides a sense of identity, such as the Vatican City to people of the Catholic faith. An icon may be linked to famous people such as Robben Island and Nelson Mandela.

2.1 The economic significance of icons for a country
Tourism icons are used by the tourism industry as pull factors and are often included in tour packages and can therefore make a significant economic contribution to a country or region where they are located. Businesses involved in the tourism industry are interrelated and dependent on each other. For this reason the economic benefits of tourism reach almost everyone in the region in some way. This is called the multiplier effect which is an effect in economics in which an increase in spending produces an increase in national/regional income and consumption greater than the initial increase.

3. Profiles of tourists visiting icons

Different types of tourists will visit different types of icons, depending mainly on their interests, age, professions and income. A young adventurous tourist might climb Mount Everest while an older wealthier tourist might relax on the beaches of the French Rivera.

4. Statistics of tourists visiting icons

The numbers of tourists visiting icons are used to plan:

  • Marketing strategies
  • The time and level of maintenance and upkeep of the icon
  • Restrictions to protect icons from possible damage caused by mass tourism.

Examples of famous world icons include:
Australia: Sydney Opera House, Ayers Rock/Uluru-Kata Tjuta National Park.
Brazil: The Statue of Christ the Redeemer
Canada: Niagara Falls
Italy: The Colosseum, The Leaning Tower of Pisa, Venice, Vatican City
Egypt: The Great Pyramids of Giza, The Sphinx
Germany: Berlin Wall and the Brandenburg Gate, The Black Forest
China: The Great Wall of China
Israel: The Dome of the Rock, The Wailing Wall
Greece: The Parthenon
India: The Taj Mahal
Turkey: The Blue Mosque
France: The Eiffel Tower, The French Riviera
Japan: Mount Fuji
Mexico: Chichén Itzá (Yucatan)
Jordan: Petra
Nepal: Mount Everest
Saudi Arabia: Mecca
Switzerland: The Swiss Alps
Netherlands: Mill Network at Kinderdijk, Elshout Peru: Machu Picchu (Cuzcu)
Poland: Auschwitz Concentration Camp
Portugal: The Algarve
Spain: Alcazar of Segovia, Bullfights
Thailand: Floating markets
Russia: The Kremlin, Red Square
United Kingdom: Big Ben, Buckingham Palace, Tower of London, London Bridge
United States of America: The Statue of Liberty, The Grand Canyon.

Unit 5 Factors contributing to the success of tourist attractions

Attractions form a key component of the tourism industry. They draw local and international tourists to cities and regions and motivate tourists to visit a destination.
Successful tourist attractions are those that:

  • Continue to attract tourists
  • Give enough information about the attraction where applicable
  • Provide for the needs of tourists
  • Meet the interests of the tourists
  • Are easily accessible
  • Are well maintained
  • Provide a safe experience for tourists.

1. Factors that make a tourist attraction successful

The five main areas in attraction management that impact on the success of an attraction are:

  • Marketing
  • Income and financial management
  • Human resources
  • visitor management
  • Operation management.

1.1 Marketing of tourism products locally and /or internationally
Successful marketing strategies are key to the success of tourist attractions. It is important that the marketing technique that is used will improve visitor numbers, and stimulate out of season and seasonal visits. Furthermore, the strategy must create a brand awareness and help to reach the budgeted income. The strategy must make the tourist attraction stand out from all other available options.

1.2 Sustainable and responsible management plans
Sustainable and responsible management entails sound management of both the financial and environmental aspects of the tourist attraction.

1.2.1 Environmental management
The environment on which the attraction is dependent for its existence must be looked after and developed.

1.2.2 Financial management
Financial management issues that must be well managed to ensure the success of an attraction are:

  • The budget
  • External issues such as inflation and tax laws
  • Controlling costs and income.

1.3 Efficiency and ethical behaviour of staff and management
Labour costs will make up a significant portion of the budgeted costs. It is therefore important that staff are managed well and that they are efficient and behave ethically. To ensure this, good staff planning and training are needed. Good induction programmes and continuous training are important to make sure that staff obtains the skills needed.

1.4 Positive experience of visitors
To ensure positive visitor experiences it is important that:

  • Visitor numbers are controlled
  • Opening hours are convenient
  • Pricing is right
  • Pathways are clear and signage is displayed
  • Informative brochures and leaflets are available.

1.5 Safety and crime prevention
The safety and security of tourists is the highest priority of any tourist attraction and a well co-ordinated strategy must be developed to protect tourists and make them feel safe.

1.6 General appearance and upkeep of the attraction
A successful attraction should have a pleasing and clean appearance. This means that regular maintenance of the facilities must take place.

1.7 Considering the needs of people with disabilities
Tourism attractions should be accessible to all including people with disabilities.

1.8 Universal access
Tourists have different needs. To be successful an attraction should have universal access. In other words it must be accessible to a wide range of tourists.
Key aspects that make an attraction accessible include:

  • Transport to the attraction
  • Transport at the attraction
  • Parking
  • Accommodation
  • Toilet facilities
  • Information
  • Support facilities and services.

2. Characteristics of a successful tourist attraction

These include:

  • Actual number of visitors exceeds the target number of visitors
  • Repeat visits
  • Income generated exceeds target figures
  • Positive impact on local community and environment.

Questions

  1. What is the difference between tourist attractions and icons?  (4)
  2. What is the reason why some attractions become icons? (2)
  3. Give an  example of an icon linked to a famous person? (2)
  4. Give 10 examples of famous world icons (20)
  5. List 4 characteristics of a successful tourist attraction (8)
  6. What does the phrase multiplier effect mean?  (4)
  7. Name two things that can be done to ensure staff obtain the skills needed to do their jobs properly?  (4)
  8. Name 7 things that make an attraction accessible? (14)
  9. Is the general appearance and upkeep of an attraction important?  (2)
  10. What are the five main areas in attraction management that impact on the success of an attraction?  (10)

Topic 2 Foreign Exchange

Overview

When tourists travel to another country they have to exchange their own currency for that of the country they are visiting in order to buy things such as food, gifts or pay for accommodation. The rate at which one currency can be exchanged for another affects not only the decisions made by tourists to visit a particular country but also the amount of foreign currency earned by a country.

In this topic you will learn about:

  • The term GDP and its benefits to the economy
  • The multiplier effect and its link to the GDP
  • The concepts of a weak and strong rand
  • The relative strength and relative weakness of a currency
  • How to interpret a currency rate sheet
  • How to convert major currencies
  • The difference between bank selling rate (BSR) and bank buying rate (BBR)
  • The effect of exchange rates on international tourism
  • Fluctuations in exchange rates.

Exchange rate conversions

  • How to interpret a currency rate sheet
  • Conversion of major currencies to understand
  • the buying power of different currencies
  • Differentiation between bank selling rate and bank buying rate

Exchange rates and the economy

  • Gross domestic product (GDP) and its benefits to our economy 
  • The multiplier effect and its link to the GDP  
  • The concept ‘strong’ and ‘weak’ rand 
  • The relative strength and weakness of a currency at specific times

The impact of exchange rates on tourism

  • Effect of exchange rates on international tourism and its influence on South African travel patterns
  • Fluctuations in the exchange rate

Unit 1 Foreign exchange

The phrase foreign exchange refers to the exchange of one currency for another, or the conversion of one currency into another currency. Foreign exchange also refers to the global market where currencies are traded virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex".

1. Gross domestic product (GDP) and its benefits to our economy

The GDP is a measure of a country’s national income. GDP is a measure of all the goods and services produced domestically, usually in a period of one calendar year. The components included are consumer spending, investment made by industry, value of exports minus value of imports, and government spending.
Our economy is diversified with key economic sectors contributing to the GDP, including:

  • Mining
  • Agriculture and fisheries
  • vehicle manufacturing
  • food processing
  • Clothing and textiles
  • Telecommunication
  • Energy
  • Financial and business services
  • Tourism
  • Transportation
  • Wholesale and retail trade.

If there are more goods and services produced in a year than in the previous year, we say there has been growth in the GDP. If GDP is increasing the economy is in good health and the nation is progressing and standards of living are improving.

2. The multiplier effect and its link to the GDP

The multiplier effect refers to the increase in final income arising from any new injection of spending. Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on.

2.1 The tourism multiplier effect
Tourism not only creates jobs in the tourism industry, it also encourages growth in other sectors of industry. This is known as the tourism multiplier effect. Simply stated, this is how many times money spent by a tourist circulates through a country’s economy.

2.2 The multiplier effect and the GDP
The multiplier effect is an effect in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. Therefore the tourism multiplier affects GDP and is very important for South Africa because we need to grow the economy and create more jobs.

3. The concept ‘strong’ and ‘weak’ rand

Strong currency, also known as a hard currency, refers to a currency when it is worth more relative to other currencies. A weak currency, also known as a soft currency, is a currency whose value has depreciated significantly over time against other currencies and will fluctuate erratically or depreciate against other currencies. A weak currency is often the result of political or fiscal instability in the country. The terms strong rand and weak rand are used in the foreign exchange
market to describe the value and strength of the South African Rand against other currencies. When one unit of our currency trades for more units of another currency, it is known as a strong rand.

4. The relative strength and weakness of a currency at specific times

Some of the effects of a weak currency:

  • A weak currency is good for nations that have more exports than imports because their exports will become cheaper for foreign buyers.
  • A weak currency will stimulate manufacturing and exports to areas with a stronger currency.
  • There will be an increase in manufacturing and job creation if the demand for exports increases.
  • More foreign tourists will be able to afford to visit countries with weak currencies as it will increase their purchasing power.
  • Imports become more expensive for the countries with weak currencies.
  • Higher prices of foreign products increase the cost of living in countries with weak currencies.
  • Purchasing power weakens for people in countries with weak currencies.
  • A weak currency has a negative effect for people planning to travel to areas with a strong currency.

Effects of a strong currency:

  • Imports become cheaper for the countries with strong currencies.
  • Imported products and services, especially fuel, become more affordable.
  • Exports become more expensive. Countries with strong currencies will export less as the demand will decrease.
  • Domestic manufacturing will decrease as there is less demand from both the domestic and foreign markets.
  • Fewer foreign tourists will be able to afford to visit countries with strong currencies as it will decrease their purchasing power.
  • Purchasing power strengthens for people in countries with strong currencies.
  • A strong currency has a positive effect for people planning to travel to areas with a weak currency.

5. How to interpret a currency rate sheet

Currency rates, also known as foreign exchange rates or simply exchange rates, tell how much of one currency you need to purchase a unit of another currency.
In order to calculate a foreign exchange rate follow these steps:

  • Identify the exchange rate of the currency you need and find the ISO code. For example, the currency code of the rand is ZAR, while that of the US Dollar is USD.
  • Look up the exchange rate for your two currencies.
  • Calculate the exchange rate by looking at a currency pair (two currencies). The first currency in the pair, known as the base currency, is the transaction currency and the second currency is the payment currency.

Unit 2 Foreign exchange (part 2)

7. Differentiation between bank selling rate and bank buying rate
In the trading world of the currency exchange markets, a different buying rate and selling rate will be quoted. Exchange rates are quoted in two different rates:

  • The bank buying rate
  • The bank selling rate.

The buying rate (BBR) is the rate at which the exchange bank will buy a currency. The selling rate (BSR) is the rate at which the exchange bank will sell a currency.
The quoted rates will include an allowance for a dealer’s margin (profit) in trading. Alternatively the profit may be recovered in the form of a commission. Banks perform a vital role in foreign currency exchange transactions. Banks trade in international currencies in order to make a profit.

8. Effect of exchange rates on international tourism and its influence on South African travel patterns
Exchange rates can impact the tourism industry either negatively or positively. A fall in the value of the South African rand has a twofold effect:

  • It makes international travel for South Africans more expensive
  • It makes travelling in South Africa cheaper for foreign tourists.

Tourist travel patterns are influenced by the exchange rates as they affect the tourist’s purchasing power. Tourists visiting South Africa from another country will have more or less money to spend depending on the exchange rate.

9. Fluctuations in the exchange rate
Factors that determine exchange rates are:

  • Inflation
  • Interest rates
  • Trade balance
  • Terms of trade
  • Government debt
  • Political and economic instability
  • Employment outlook of a country.

Questions

  1. What does the phrase foreign exchange mean? (4)
  2. What does the phrase Gross Domestic Product mean?(4)
  3. What do you understand by the phrases strong and weak currencies? (4)
  4. Name three effects of a weak currency? (6)
  5. List the different factors that determine exchange rates? (14)
  6. List two effects a fall in the value of the South African rand has on tourism? (4)
  7. Name the two ways exchange rates are quoted? (4)
  8. What are the steps that need to be taken to determine an exchange rate? (6)
  9. List three effects of a strong currency?  (6)
  10. What is the multiplier effect and its link to the GDP? (4)

Term 3

Topic 1 Domestic, regional and international tourism

Overview

In this topic you will learn about:

  • Forms of payment when travelling internationally including:
  • Electronic fund transfers (EFT)
  • Telegraphic transfers (SWIFT transfers)
  • Bank drafts
  • Internet payments
  • Foreign bank notes (cash)
  • Credit cards (Visa, MasterCard, American Express, Diners Club)
  • Traveller’s cheques
  • Preloaded foreign currency debit cards such as Cash Passport Card/Travel Wallet/International Travel Card
  • The advantages and disadvantages of each form of payment
  • Interpreting statistics regarding inbound international tourism including:
  • Foreign arrivals to South Africa and how the arrival statistics can determine foreign market share
  • Most visited provinces in South Africa
  • Length of stay in each province
  • Average expenditure per tourist
  • Activities undertaken whilst in South Africa.

Forms of payment when travelling internationally

  • Electronic fund transfers
  • (EFT)
  • Telegraphic transfers (SWIFT
  • transfers)
  • Bank draft s
  • Internet payments
  • Foreign bank notes
  • Credit cards
  • Preloaded foreign currency debit cards
  • Traveller’s cheques

Foreign Market Share
Concepts
Foreign arrivals to South Africa
Most visited provinces in South Africa
Length of stay in each province
Average expenditure per tourist
Activities undertaken whilst in South Africa

Unit 1 Forms of payment when travelling internationally

There are several methods tourists can use to pay for goods and services when travelling in a foreign country. Each method of payment has its advantages and disadvantages and tourists need to do research before deciding which method is best suited to them.

1. Electronic fund transfers (EFT)
An EFT is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems.
Its advantages are:

  • It is safe and secure
  • It is efficient and fast
  • It is less expensive than paper cheque payments and collections
  • Money can be transferred throughout the world.

Its disadvantages are:

  • Funds will only show on a beneficiary’s account if the transaction is done before a specific time of the day, otherwise it will only show the next day.
  • Funds might be transferred to or from a person’s account on the incorrect date.
  • It may be difficult to cancel an EFT.

2. Telegraphic transfers (SWIFT transfers)
Telegraphic transfers  are a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office. Wire transfer systems are intended to provide more individualized transactions than bulk payment systems.
Its advantages are:

  • If you are stuck overseas without cash, someone at home can send you money electronically within a day
  • You do not need Internet banking as the banks send the information directly to each other.

Its disadvantages are:

  • Fees can be high.

3. Bank drafts
A banker's draft (also called a cashier's check) is a cheque where the funds are taken directly from the financial institution rather than the individual drawer's account.
Its advantages are:

  • It is one of the safest ways to send money abroad.

Its disadvantages are:

  • Bank fees and charges can be high
  • Drafts need to be physically sent by mail or courier, so they may take a few weeks to reach the recipient.
  • The recipient cannot cash the draft unless he has a bank account in which to deposit it.

4. Internet payments
Internet payments describe any online payment (on the internet) for a product or service. Its advantages are:

  • They can save time
  • No need to stand in long queues to pay a bill
  • People can log into their accounts at any time to get an up-to-date statement of their transactions
  • Low transaction costs/fees.

Its disadvantages are:

  • No internet access can cause late payments
  • There is no direct contact with the business from which a product or service is purchased
  • Computer crimes may result in money being stolen
  • Criminals record a user’s keystrokes and then use this information to illegally access accounts.

5. Foreign Bank notes
Foreign bank notes are cash (coins and notes) that the tourist uses in the country that they are visiting.
Its advantages are:

  • It’s useful to have cash on hand for immediate expenses.

Its disadvantages are:

  • This is the most risky form of payment as if cash is stolen or lost it cannot be recovered.

6. Credit Cards
A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the
individual's credit rating.
Its advantages are:

  • Cards can be used to buy expensive items. The debt can be paid off over time
  • They avoid having to carry large amounts of cash
  • Most businesses accept credit cards as a form of payment.

Its disadvantages are:

  • Some businesses do not accept credit cards
  • It is easy to overspend and incur debt
  • Transaction costs are charged every time you use the card
  • Illegal copying of information from the magnetic strip of a card may give criminals access to an account (card skimming)
  • Interest rates are high.

7. Preloaded foreign currency debit cards
These cards, issued by all major banks, are preloaded with foreign currency before tourists travel and are also known as ‘cash passports’.
Its advantages are:

  • There is no chance of running into debt
  • The money loaded onto the card is safe
  • Activation of the card is protected by a PIN.

Its disadvantages are:

  • Bank fees may be high
  • Some cards charge a fee when you use them to make a purchase or withdraw money
  • A lack of Internet access may make it difficult to load foreign currency onto the cards.

8. Traveller’s cheques
A traveller’s cheque is a cheque issued by a financial institution that can be used as a form of payment and, if necessary, exchanged for cash.
Its advantages are:

  • They are refunded if lost or stolen
  • They are available in all major currencies and can be exchanged at most hotels, restaurants and shops around the world
  • They are useful as currency if a tourist is unable to find a functioning ATM.

Its disadvantages are:

  • The exchange rate for traveller’s cheques is not as favourable as the interbank rate that tourists get when using a credit or debit card
  • Nowadays few shops and businesses accept traveller’s cheques for the purchase of goods
  • There are bank charges and fees for converting cash into traveller’s cheques.

Unit 2 Foreign market share

1. Concepts

1.1 Inbound tourists
Inbound tourists are incoming tourists, ie - people travelling to South Africa.

1.2 Foreign market share
Foreign market share is the portion of the inbound tourism market that a specific country controls and includes both the number of tourists and the amount they spend.
The two main categories of foreign markets are:

  • Land markets: Countries where at least 60% of arrivals from the country arrive by land. For South Africa land markets are Botswana, Lesotho, Mozambique, Malawi, Namibia, Swaziland, Zambia and Zimbabwe.
  • Air markets: Those countries where at least 60% of arrivals from the country arrive by air.

1.3 Arrival statistics
Arrival statistics indicate the numbers of international tourists that arrive in South Africa. These numbers are collected, classified, analysed and interpreted.

2. Foreign arrivals to South Africa

Foreign tourist arrivals vary from year to year. We use the phrase source markets to describe the main areas from which these tourists come from. One of South
Africa's source markets is Europe. Examples of emerging foreign markets are India and China.

Questions

  1. What does the abbreviation EFT stand for? (2)
  2. List four advantages of using  EFTs. (8)
  3. What is a telegraphic transfer or SWIFT transfer? (4)
  4. Name one advantage of using a telegraphic transfer? (2)
  5. List four advantages of using the internet to make payments? (8)
  6. List four disadvantages of using the internet to make payments? (8)
  7. Explain what a credit card is? (4)
  8. List three advantages of using a credit card to make payments? (6)
  9. Explain the phrase foreign market share? (4)
  10. The two main categories of foreign markets are? (4) 

Topic 2 Marketing

Overview

International tourists visiting South Africa form a vital part of our economy. In this topic you will learn about:

  • The importance of marketing South Africa internationally
  • The core business of South African Tourism
  • Opportunities for marketing South Africa internationally
  • How SAT’s marketing activities are funded
  • The concept of branding and South Africa’s brand logo
  • Local travel shows such as the Tourism Indaba and the Getaway show as
  • Opportunities to promote South Africa and the Southern African region to the world.

Marketing South Africa

  • The importance of marketing South Africa internationally
  • The core business of South African Tourism
  • Opportunities for marketing South Africa internationally
  • Funding SAT’s international marketing initiatives: the role of Tourism Marketing Levy South Africa (TOMSA)
  • South Africa’s brand logo
  • Opportunities to promote South Africa and the Southern African region to the world

Unit 1 Marketing South Africa as a tourism destination

1. The importance of marketing South Africa internationally
Tourism is a very important part of South Africa’s economy. In order to ensure that tourism continues to grow, South Africa must be actively marketed to international tourists as a tourism  destination. There are two main objectives in marketing South Africa as a  destination:

  • Increase in annual volume of foreign arrivals to South Africa
  • Increase in international awareness of South Africa as a travel destination.

2. The core business of South African Tourism (SAT)
SAT has been specifically tasked with marketing South Africa as a destination, both domestically and internationally and can be described as a National Destination Marketing Organisation (DMO).

2.1 Marketing South Africa internationally as a tourism destination of choice
SAT undertakes a number of marketing activities. These include:

  • Participation in major travel shows both locally and internationally
  • Advertising, public relations and direct mailing campaigns
  • Holding educational work sessions with the international partners of South Africa’s travel industry.

SAT divides the international market into segments to identify the most important markets on which to focus. SAT categorises market segments as core markets, investment markets, tactical markets, watch-list markets, markets of strategic importance and strategic air link or hub markets. Core markets are the most important and receive the most attention.

2.2 Maintaining and enhancing the standard of facilities and services in the industry
The product aspect of marketing is one of the five Ps of the marketing mix. Since facilities and services form the basis of the tourism product, the quality of these facilities and services needs to be maintained or, if necessary, improved. One of the ways in which SAT can do this is through the Tourism Grading Council of South Africa (TGCSA). The TGCSA evaluates accommodation establishments, such as guesthouses and hotels, and awards them a star grading.
Other initiatives to ensure that the standard of facilities and services are improved include:

  • Welcome Awards
  • The Emerging Tourism Entrepreneur of the Year Award (ETEYA).

2.3 Coordinating the marketing activities of role players in the industry
SAT spends a large amount of time and money on marketing South Africa as a destination. Other tourism organisations should use the marketing done by SAT as a platform for their own marketing initiatives. Marketing efforts should be coordinated so that they align with the strategy and positioning of South African Tourism. For this reason SAT works closely with other Direct Marketing Organisations (DMOs) at both provincial and local levels. SAT coordinates the marketing efforts of the different provinces and cities with the national marketing efforts.

3. Opportunities for marketing South Africa internationally
Tourism intermediaries are very important in generating tourism business for a destination.
International travel trade shows and expos are hosted around the world. The two best known of these are the International Tourism Exchange (ITB) in Berlin and the World Travel Market (WTM) in London.

3.1 ITB (Berlin)
The ITB takes place annually in March. ITB draws more than 170 000 visitors, including 108 000 trade visitors, and over 10 000 exhibitors from 180 countries.

3.2 World Travel Market (London)
The idea is to create opportunities for a wide variety of people from the global travel trade to meet, network, negotiate and conduct business under one roof. This is an annual event that normally takes place in November.

4. Funding SAT’s international marketing initiatives: the role of Tourism Marketing Levy South Africa (TOMSA)
SAT needs a great deal of funding because international marketing is expensive. Tourism Marketing Levy South Africa (TOMSA) was set up in 1998 to raise additional funds for the marketing of destination South Africa. It is a private sector initiative. South African Tourism (SAT) makes use of these funds to promote the country as a preferred tourist destination, both locally and internationally.
The TOMSA levy is 1% of each confirmed booking. The collection of the TOMSA levy by tourism businesses is voluntary. The amounts paid are not the same as paying a tax to the business. The tourist pays the levies and the business just acts as a collector of the levies. These levies are paid to the Tourism Business Council of South Africa (TBCSA), which administrates TOMSA.

5. South Africa’s brand logo
South African Tourism’s logo and corporate identity were redeveloped in 2009 in collaboration with the International Marketing Council (IMC). The logo uses the colours of the South African flag and the inspiration for the logo is the pride in South Africa that South African Tourism strives to nurture among all South Africans.
logo jkygad

6. Opportunities to promote South Africa and the Southern African region to the world
6.1 Tourism Indaba
This is owned by SAT and is one of the largest tourism marketing events on the African calendar.
Indaba can be compared to other ‘must visit’ events of its kind on the global calendar, such as the WTM and ITB. This tourism trade event showcases a wide variety of Southern Africa’s best tourism products, and attracts international visitors and media from across the world. Indaba takes place annually over four days normally in mid-May. It attracts well over 13 000 delegates from the travel, tourism, and related industries.

6.2 The Getaway Show
The Getaway Show takes place annually both in the Western Cape, usually during March/April, and in Gauteng during August/September. The show is organised by the publishers of Getaway magazine and includes a wide variety of exhibitors, including outdoor equipment companies, safari tour
operators, and tourist destinations in Southern Africa.

Questions

  1. What are the two main objectives in marketing South Africa as a destination? (4)
  2. What is the core business of South African Tourism (SAT)?  (2)
  3. Name three marketing activities that SAT undertakes? (6)
  4. What are the segments that SAT divides the market into? (14)
  5. Name two international trade expos that SAT participates in? (4)
  6. Name two local trade expos that promote South Africa? (4)
  7. Explain how SAT is funded?  (8)

Topic 3 Sustainable and responsible tourism

Overview

In this topic you will learn about:

  • The concept and background of the triple bottom line approach
  • How tourism businesses can act responsibly (environmentally, economically and socially)
  • Codes of conduct for tourist behaviour (social, economic and environmental)
  • How a destination can attract tourists who are conscious of the triple bottom line
  • How Fair Trade in Tourism South Africa contributes to responsible and sustainable practices
  • How to make use of case studies of companies that practise the triple bottom-line approach.

The three pillars of sustainable tourism

  • The concept and background of the triple bottom line approach
  • Environmental impacts (planet)
  • Economic impacts (profit)
  • Social impacts (people)

Responsible tourism and tourists

  • Codes of conduct for tourist behaviour (social, economic and environmental)
  • How can a tourism destination attract environmentally (people, planet, profit) conscious tourists?
  • The contribution of Fair Trade in Tourism South Africa (FTTSA) towards encouraging responsible and sustainable practices
  • Case studies of companies that practice the triple bottom-line approach 

Unit 1 The three pillars of sustainable tourism

1. The concept and background of the triple bottom line approach

The phrase bottom line refers to the bottom line of a financial statement, called the income statement. This line shows how much profit a company has made in a particular period.
As international tourism continues to grow, governments have realised that tourism has more than just an economic impact on a country. Tourism also has social (people) and environmental (planet) impacts. These two aspects are added to the economic (profit) aspect to form the triple bottom line approach.
If profit was the only objective, human and natural resources could be exploited so balanced approach is required.

2. Environmental impacts (planet)

2.1 Resource management (energy and water)
Resource management refers to the way in which scarce and limited resources are managed. It is important that tourism businesses reduce their energy usage to help reduce pollution and protect our limited resources. Simple things like switching off unused appliances and lights that have been left on help conserve electricity.  The supply of fresh water is limited and large parts of South Africa receive little rain and are very dry. We need to conserve water to ensure that there is enough water for everyone. Simple things like fixing leaking taps help conserve water.

2.2 Waste management
Waste management refers to the management of the amount of waste generated by a tourism business. It is important that tourism businesses manage their waste since waste has a negative environmental impact. The three Rs can be applied to manage waste - reduce, re-use and re-cycle.

2.3 Litter control
Litter control is the reduction or avoidance of litter. Tourists should be encouraged not to litter.
Tourism organisations should ensure that they provide enough rubbish bins, and encourage tourists to place litter in the correct bins for recycling. They should also encourage tourists to reduce, re-use and recycle.

2.4 Pollution control
Tourism organisations should use environmentally friendly products where possible. This is done through pollution control. Pollution should be reduced or completely avoided. This will ensure that fewer harmful chemicals that pollute the ground and water are produced. Certain types of waste, for example, used motor oil and fluorescent tube lights, should be handled by professional waste management companies.

2.5 Environmentally friendly building
Environmentally friendly building is the construction and design of new buildings, such as hotels, which are designed to have the minimal negative impact on the environment both during building and once operational.

2.6 Promotion of indigenous flora and control of alien invasive plants in grounds and gardens
Alien invasive plants are plants that do not naturally occur in a particular area. They often grow out of control, affecting the indigenous flora. It is better to use indigenous plants when planning a garden, for example, for a new hotel, as they use less water and are part of our natural heritage.

3. Economic impacts (profit)

If tourism businesses do well, they have a positive economic impact on a destination. Tourism businesses have an important role to play in the responsible and sustainable management of tourism.

3.2 Responsible attitude of a tourism business towards the people and the environment it affects
Tourism businesses must realise that their businesses are about more than just profit. They have a responsibility towards the community and the environment in which they operate. The most important aspect of this responsible attitude of a tourism business is that they do not exploit people or the environment for profit.

3.3 Ways to manage economic impacts

  • Ownership: It is very important that government encourages and promotes local tourism business ownership.
  • Employment: Employing local residents is important to ensure that the economic benefits remain at the destination.
  • Procurement of local goods and services: Through the procurement of local goods (buying) from local suppliers, they are sharing the economic benefits of tourism with the other businesses at the destination.

4. Social impacts (people)

4.1 Positive and negative effects of tourism on local communities, culture and heritage
Tourism can have both positive and negative impacts on communities, and their culture and heritage.
Examples of positive effects include:

  • Tourism creates an awareness of different traditions, cultures, and art forms.
  • Tourism creates understanding between people of different cultures.
  • Local communities absorb new ideas, interests, and values from tourists.
  • Cultural heritage is preserved and money can be raised for the maintenance of cultural sites and museums.
  • The local community learn to take pride in their culture.
  • The money generated can be used to uplift the community.

Examples of negative effects include:

  • Crime and violence may increase.
  • Cultural changes may occur as the locals may adopt the culture of tourists instead of valuing their own culture and heritage.
  • The money generated by tourism may not feed back into the local community.
  • There may be racial tension between tourists and locals.
  • There may be negative tourist behaviour such as public drunkenness.
  • Tension may arise between tourists and locals if locals are denied access to culturally significant places.
  • Sometimes privacy is not respected, sacred sites are invaded, and cultural ceremonies are exploited.

4.2 Corporate social investment (CSI)
Corporate social investment involves a contribution by a business (corporate) to the community in which it operates and can take many forms.

Unit 2 Responsible tourism and tourists

1. Codes of conduct for tourist behaviour (social, economic and environmental)

Most responsible tourism guidelines and handbooks focus on what tourism businesses should do to be more sustainable. There are also several organisations that have created lists of ways in which tourists can be more responsible travellers.

2. How can a tourism destination attract environmentally (people, planet, profit) conscious tourists?

People all over the world are becoming more concerned with sustainability. As a result, tourists are more concerned about whether tourism businesses are implementing responsible tourism practices. Tourism destinations can attract the right type of tourists by marketing the destination as a
responsible tourism destination.

3. The contribution of Fair Trade in Tourism South Africa (FTTSA) towards encouraging responsible and sustainable practices

Fair Trade in Tourism South Africa (FFTSA) is a nongovernmental organisation (NGO) that promotes sustainable tourism development and responsible tourism management.
FFTSA promotes sustainable and responsible tourism by:

  • Creating awareness of sustainable tourism issues
  • Researching better ways of implementing and planning sustainable tourism
  • Advocacy of sustainable tourism issues to tourism authorities
  • Building capacity through training
  • facilitating a tourism Fair Trade certification programme, the first of its kind in the world.

Questions

  1. Explain what the phrase bottom line means? (4)
  2. Explain what the phrase triple bottom line means? (4)
  3. Name two things you can do to help water and energy management?  (4)
  4. What are the three R's in waste management?  (6)
  5. Explain what the phrase environmentally friendly building means?  (4)
  6. List three ways in which Fair Trade promotes sustainable and responsible tourism. (6)
  7. What is meant by the term Corporate Social Investment? (4)

Topic 4 Culture and heritage

Overview

In this topic you will learn about:

  • The concept of a World Heritage Site
  • The role of UNESCO
  • The logo and main functions of UNESCO
  • The types of World Heritage Site
  • Descriptions of the World Heritage Sites in South Africa
  • The location of the World Heritage Sites in South Africa
  • How the World Heritage Sites meet UNESCO’s criteria
  • The value of the World Heritage Sites to South African tourism.

World Heritage Sites

  • The concept of World Heritage Sites
  • The role of UNESCO
  • Types of World Heritage Sites
  • The World Heritage Sites in South Africa
  • The value of the World Heritage Sites to South Africa’s tourism industry

Unit 1 World heritage sites

1. Concept: World Heritage Sites

Heritage is the legacy preserved by past generations for future generations. In order to be given World Heritage status, sites must have outstanding natural, cultural or historical value and meet at least one of UNESCO’s ten selection criteria. A country can apply to the UNESCO World Heritage Committee for a site to be proclaimed a World Heritage Site. A place that is declared a World Heritage Site is proclaimed by the Minister of Environmental Affairs and Tourism by notice in the Government Gazette and thereafter included in the World Heritage List. An example is Robben Island.

2. The role of UNESCO

The United Nations Educational, Scientific and Cultural Organisation (UNESCO) is a leading international organisation responsible for the protection and development of heritage.

2.1 UNESCO logo and main functions
The main functions of UNESCO are in five major areas. These are:

  • Education
  • Natural sciences
  • Social and human sciences
  • Culture
  • Communication and information.

Examples of UNESCO sponsored projects include literacy and teacher-training programs.

3. Types of World Heritage Sites

The three types of World Heritage Sites are:
Cultural: Sites accorded the status on the basis of their tangible and intangible cultural heritage
Natural: Sites accorded status on the basis of their natural heritage
Mixed:  Sites accorded status on the basis of both cultural and natural heritage.

4. The World Heritage Sites in South Africa

There are eight heritage sites in the country that are inscribed in the World Heritage List because of their unique cultural and natural value to all humanity.
They are:

  • Mapungubwe Cultural Landscape
  • Cradle of Humankind
  • Richtersveld Cultural and Botanical Landscape
  • Robben Island
  • iSimangaliso (Greater St Lucia) Wetland Park
  • Vredefort Dome
  • uKhahlamba/Drakensberg Park
  • Cape Floral Region.

5. The value of the World Heritage Sites to South Africa’s tourism industry

They are valuable in the following ways:

  • They bring an awareness of the existence of the sites to both domestic and foreign markets.
  • They increase the economic value of the provinces in which they are located as they attract both domestic and foreign visitors.
  • They bring income into the establishments in the area of World Heritage Sites through provision of services such as accommodation, transport, food, drink, souvenirs and entry fees.
  • They encourage close working relationships between tourism organisations and establishments in managing World Heritage Site destinations in order to
    improve the quality of visitor experience.
  • They contribute to a sense of ownership and pride of cultural and natural heritage in the local community.
  • They create job opportunities as increased visitor numbers result in increased demand for services.
  • They result in the improvement of the infrastructure that provides access to the sites.

Questions

  1. What is the concept behind World Heritage Sites?  (8)
  2. What is the role of UNESCO?  (2)
  3. What are the three types of World Heritage Sites? (6)
  4. What are the eight World Heritage Sites in South Africa? (16)

Topic 5 Communication and customer care

Overview

In this topic you will learn about:

  • The concept of customer feedback
  • The purpose of obtaining customer feedback
  • Methods to obtain customer feedback including surveys, questionnaires, feedback cads, follow-up calls, SMS messages and web-based responses
  • How to analyse feedback including studying and capturing feedback, identifying common complaints , deciding on an action and starting the intervention process
  • The impact of the service delivered on an organisation and its profitability.

Methods of obtaining customer feedback and measuring customer feedback

  • Concept: Customer feedback
  • Purpose of obtaining customer feedback
  • Methods to obtain customer feedback
  • Analysing customer feedback
  • The impact of service delivery on an organisation’s business profitability

Unit 1 Methods to obtain customer feedback and measure customer satisfaction

1. Concept: Customer feedback

Customer feedback  is information coming directly from customers about the satisfaction or dissatisfaction they feel with a product or a service. Customer comments and complaints given to a company are an important resource for improving and addressing the needs and wants of the customer. The information is procured through written or oral surveys, online forms, emails, letters, or phone calls from the customer to the company.

2. Purpose of obtaining customer feedback

The top four reasons for getting customer feedback are:

  • Innovation
  • External performance feedback
  • Retaining customers
  • Advance warning in customer trends.

3. Methods to obtain customer feedback

There are a number of methods available for companies to use to do this, such as:

  • Surveys
  • Questionnaires
  • Feedback cards
  • Follow-up calls
  • SMS messages on cell phones
  • Web-based responses.

4. Analysing customer feedback

The following steps can be taken to analyse customer feedback:

  • Study the feedback
  • Identify most common complaints
  • Decide on an action plan
  • Start the intervention process.

5. The impact of service delivery on an organisation’s business profitability

The impacts that good service delivery have on an organisation’s business profitability include:

  • Increased sales
  • Customer loyalty
  • Enhanced public image
  • More effective employees
  • Motivated staff members
  • Reduced marketing costs.

Questions

  1. Explain what the phrase customer feedback means? (4)
  2. What are the top four reasons for getting customer feedback? (8)
  3. List six methods a company can use to obtain customer feedback? (12)
  4. What steps need to be taken to analyse customer feedback? (8)
  5. List six advantages that good service delivery have on an organisation’s business profitability? (12)

Term 4

Topic 1 Tourism sectors

Overview

In this topic you will learn about:

  • Factors influencing a company’s professional image
  • The importance of the image of company staff
  • Basic conditions of employment in the tourism industry
  • Contracts of employment
  • The purpose and value of a code of conduct. 

Professional image in the tourism industry

  • Factors contributing to a professional image in the tourism industry
  • The image of company staff

Conditions of employment

  • Information contained in an employment contract
  • Basic conditions of employment in a tourism field

The purpose and value of a code of conduct

  • Purpose of a code of conduct
  • Value of a code of conduct
  • Examples of codes of conduct 

Unit 1 Professional image in the tourism industry

It is important that people in the tourism industry portray a professional image. The image of a tourism business and its staff is of great importance when dealing with tourists from various countries, cultures and personal backgrounds.

1. Factors contributing to a professional image in the tourism industry

The following factors contribute towards the professional image of a company:

  • Company image
  • Company staff
  • Physical appearance and product packaging
  • Company customer policies
  • Marketing material
  • Company environmental policies.

2. The image of staff in the tourism industry

Tourists expect professionalism from tourism employees, who must be presentable, efficient and well trained. If service providers are unprofessional, it creates a poor image.
Staff must have a professional image which includes:

  • Uniforms
  • Appropriate dress code
  • Good personal hygiene and grooming
  • Interaction with customers
  • Good communication skills.

Unit 2 Conditions of employment

Conditions of employment refer to the terms under which an employer has employed a person.
Conditions of employment cover a broad spectrum of work related issues. Employees should read these conditions very carefully before signing a contract to avoid any misunderstandings or disagreements.
The Employment Act applies to all employers and workers, but excludes:

  • The National Defence Force
  • The National Intelligence Agency
  • The South African Secret Service
  • Unpaid volunteers working for charity.

1. Information contained in an employment contract

The following details are normally included in an employment contract:

  • Employer and employee details
  • Employment details
  • Payment details
  • Leave details
  • Notice/contract period.

2. Basic conditions of employment in a tourism field

The Basic Conditions of Employment Act stipulates that: 

  • Workers are not allowed to work more than 45 hours a week or nine hours a day.
  • Employees cannot be forced to work overtime, and by agreement for no more than ten
    hours a week.
  • Overtime must be paid at 1,5 times the normal wage.
  • Employees must have a meal break of one hour after five hours of work.
  • Employees must have a daily rest period of 12 consecutive hours and a weekly rest period of 36 consecutive hours.
  • Employees who work occasionally on Sunday must be paid double, and those who normally work on a Sunday must be paid 1,5 times the normal wage.
  • Employees cannot be forced to work on a public holiday, and must be paid double if they agree to.
  • Employees are entitled to 21 consecutive days' annual leave or, by agreement, one day for every 17 days worked.
  • Employees cannot receive money instead of holidays, except when they leave the company.
  • Employees are entitled to six weeks' paid sick leave in a 36-month period.
  • Pregnant employees are entitled to four consecutive months of maternity leave, although they do not have to be paid during this time.
  • Full-time employees are entitled to three days of paid family responsibility leave per year, but an employer can ask for reasonable proof of the circumstances.

Unit 3 The purpose and value of a code of conduct

A code of conduct is a set of rules outlining the responsibilities of or proper practices for an individual, party or business. The code of conduct thus takes the aims and objectives of the organisation into account. The code of conduct contains procedures to follow in certain situations and requires certain behaviours.

1. Purpose of a code of conduct

A code of conduct:

  • Spells out the expected conduct of staff in their performance of duties
  • Offers guidance for staff members faced with ethical challenges
  • Guides behaviour
  • Helps businesses ensure that employees act responsibly
  • Protects businesses from lawsuits and ensures good workplace and public relations
  • Acts as a public face for the business, identifying the ethics of the organisation to the outside world
  • Is used as a reference for a business’ proposed course of action, or for when this course of action is questioned.

2. Value of a code of conduct

A code of conduct:

  • Creates a cooperative and collaborative atmosphere
  • Assists in promoting integrity in the workplace
  • Creates agreed upon behaviours and methods of operation for the business
  • Leads to improved company performance if linked to the aims and objectives of the company
  • Promotes a good company culture as employees know what behaviour is expected of them
  • Assists in the development of good communication between employer and employees
  • States the company’s unique set of values and beliefs
  • Can be used to create publicity and attract new customers.

3. Examples of codes of conduct

3.1 South African National Parks
The Board of SANParks is highly committed to a policy of fair dealing and integrity in the conduct of their business. Their commitment is based on the belief that all activities should be conducted honestly, fairly and legally. The primary purpose of the code is a positive one: to promote exemplary conduct.

3.2 Southern Africa Tourism Services Association (SATSA)
The SATSA Code of Conduct aims to ensure that the public receive the best possible service from members. The association wishes to maintain and enhance their reputation, standing and good name.

Questions

  1. List six factors that contribute towards the professional image of a company? (12)
  2. List five factors that contribute towards the professional image of staff? (10)
  3. The Employment Act applies to all employers and workers, but excludes who? (8)
  4. Which details are normally included in an employment contract? (10)
  5. The Basic Conditions of Employment Act stipulates that workers should not work more than how many hours per week?  (2)
  6. The Basic Conditions of Employment Act stipulates that workers should be paid what rate for overtime? (2)
  7. Explain what the phrase code of conduct means?  (4)
  8. Give two examples of organisations in South Africa that have  codes of conduct?  (4)

Answers

Term 1

Topic 1

  1. A global event is an organised event involving people from countries from around the world.
    There are many different types of global events and they can attract a lot of media attention.(4)
  2. The Olympic Games is the largest sporting event in the world, the FIFA Soccer World Cup is the second largest sporting event in the world, the Tour de France cycling event is the third largest sporting event in the world and is held mainly in France. (4)
  3. The word indaba is an isiZulu word meaning ‘a meeting of elders’ but is used as a general term for meetings, exhibitions, and conferences. The Tourism Indaba is South Africa’s tourism showcase. It is the largest incoming travel trade exhibition in Africa and is held annually.(6)
  4. Generation of foreign exchange income, investment, the multiplier effect as money spent by a tourist circulates through the economy, development of infrastructure in the host country, job creation, future growth in international tourism.  (12)
  5. Facilities built for the event, may not be suitable for domestic use after the event, during the event, domestic tourism in the host country normally slows down, pollution of areas in and around the places used during the event, possible security risks, it might take a long time for the country to pay off this debt, construction workers involved in building roads and other facilities in preparation for the event could lose their jobs once the construction work is completed. (12)
  6. Civil war, terrorism, general unrest. (6)
  7. Natural disasters, diseases, Tsunamis, earthquakes, Global recession, accidents. (2)
  8. Travellers who have already booked will may cancel their trips. Tourists who haven’t yet booked trips to affected areas delay their bookings,  or may go elsewhere. Tour operators avoid booking trips to affected countries. Airlines suspend their flights to affected areas. (8)
  9. Malaria, yellow fever, bird flu, swine flu.   (4)
  10. A tsunami is a series of very large ocean waves caused by an underwater earthquake or volcanic eruption which damage infrastructure, buildings, attractions, ports, coastlines and beaches.(4)

Topic 2

  1. Packaged tour, Escorted packaged tour, Group packaged tour, Independent packaged tour, Scheduled tours.  (10)
  2. A tourist profile is a summary of personal information and facts relevant to the tourist’s wants and expectations. The tourist profile helps the travel agent plan a tour and make sure that the needs of the tourist are met.   (4)
  3. A valid passport, a valid visa, sufficient funds to cover their stay in the country, a return ticket, or onward ticket to another country, international law requires travellers crossing the borders of countries where yellow fever is endemic, to have a yellow fever vaccination. (10)
  4. An identity number, two passport photographs, fingerprints must be taken if aged 16 years or older, a fee dependent on the type of passport applied for. (8)
  5. DST is a way of making better use of daylight by setting the clock ahead during summer months (thus losing one hour) when DST starts, and setting it back again one hour in the winter months (thus gaining one hour) when DST ends.  (4)
  6. The phrase time zone refers to any of the 24 longitudinal divisions of the earth's surface in which a standard time is kept, the primary division being that bisected by the Greenwich meridian. Each zone is 15° of longitude in width, with local variations, and observes a clock time one hour earlier than the zone immediately to the east. (4)
  7. Jet lag is a general feeling of fatigue and disorientation often experienced by travellers by jet aircraft who cross several time zones in relatively few hours.  (4)
  8. They do not drink alcoholic beverages the day before their flight, during the flight, or the day after the flight, They do not drink caffeinated beverages before, during, or just after a flight, They drink plenty of water to offset the effects of the dry air in the plane, They do not eat too much on the plane, They exercise their legs from time to time while they are seated for their flight, They get up and walk around every hour or two, They do not take sleeping pills, They do not nap for more than an hour at a time, They break up long-haul trips across many time zones, if feasible, with a stay in a city about halfway to their destination, They wear comfortable clothes and shoes, They make use of sleeping aids. (8)
  9. Earth is divided into the Northern and Southern Hemispheres by the equator, and the Eastern and Western Hemispheres by the Greenwich Meridian.(4)
  10. Step 1: Locate the place for which you already know the time and day on a time zone map.
    Step 2: Locate the place for which you wish to know the time and the day of the week on a time zone map.
    Step 3: Count the time zones between the two places
    Step 4: Calculate the time by either adding or subtracting an hour for each time zone, depending on whether you are moving east or west.
    Step 5: If you have crossed the International Date Line, identify the day. (10) 

Term 2

Topic 1

  1. Tourist attractions are places that tourists like to visit, such as national parks and heritage sites. An icon is a tourist attraction that is world famous and comes to represent or be symbolic of the country or city in which it is located.  (4)
  2. Icons are unique and tourists find them fascinating because they are the only one of their kind in the world.  (2)
  3. Robben Island and Nelson Mandela.   (2)
  4. (Students can list any ten of the following below)
    Australia: Sydney Opera House, Ayers Rock/Uluru-Kata Tjuta National Park.
    Brazil: The Statue of Christ the Redeemer
    Canada: Niagara Falls
    Italy: The Colosseum, The Leaning Tower of Pisa, Venice, Vatican City
    Egypt: The Great Pyramids of Giza, The Sphinx
    Germany: Berlin Wall and the Brandenburg Gate, The Black Forest
    China: The Great Wall of China
    Israel: The Dome of the Rock, The Wailing Wall
    Greece: The Parthenon
    India: The Taj Mahal
    Turkey: The Blue Mosque
    France: The Eiffel Tower, The French Riviera
    Japan: Mount Fuji
    Mexico: Chichén Itzá (Yucatan)
    Jordan: Petra
    Nepal: Mount Everest
    Saudi Arabia: Mecca
    Switzerland: The Swiss Alps
    Netherlands: Mill Network at Kinderdijk, Elshout
    Peru: Machu Picchu (Cuzcu)
    Poland: Auschwitz Concentration Camp
    Portugal: The Algarve
    Spain: Alcazar of Segovia, Bullfights
    Thailand: Floating markets
    Russia: The Kremlin, Red Square
    United Kingdom: Big Ben, Buckingham Palace, Tower of London, London Bridge
    United States of America: The Statue of Liberty, The Grand Canyon.  (20)
  5. Actual number of visitors exceeds the target number of visitors, repeat visits, income generated exceeds target figures, positive impact on local community and environment.  (8)
  6. Is an effect in economics in which an increase in spending produces an increase in national/regional income and consumption greater than the initial increase. (4)
  7. Good induction programmes and continuous training.(4)
  8. Transport to the attraction, Transport at the attraction, Parking, Accommodation, Toilet facilities, Information, Support facilities and services.  (14)
  9. Yes. (2)
  10. Marketing, Income and financial management, Human resources, visitor management, Operation management.  (10)

Topic 2

  1. The phrase foreign exchange refers to the exchange of one currency for another, or the conversion of one currency into another currency. Foreign exchange also refers to the global market where currencies are traded virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex".   (4)
  2. The GDP is a measure of a given country’s national income. GDP is a measure of all the goods and services produced domestically, usually in a period of one calendar year. The components included are consumer spending, investment made by industry, value of exports minus value of imports, and government spending. (4)
  3. Strong currency, also known as a hard currency, refers to a currency when it is worth more relative to other currencies. A weak currency, also known as a soft currency, is a currency with value that has depreciated significantly over time against other currencies and will fluctuate erratically or depreciate against other currencies. (4)
  4. (Any three of the following below)
    • A weak currency is good for nations that have more exports than imports because their exports will become cheaper for foreign buyers.
    • A weak currency will stimulate manufacturing and export to areas with stronger currency.
    • There will be an increase in manufacturing and job creation if the demand for exports increases.
    • More foreign tourists will be able to afford to visit countries with weak currencies as it will increase their purchasing power.
    • Imports become more expensive for the countries with weak currencies.
    • Higher prices of foreign products increase the cost of living in countries with weak currencies.
    • Purchasing power weakens for people in countries with weak currencies.
    • A weak currency has a negative effect for people planning to travel to areas with a strong currency. (6)
  5. Inflation, Interest rates, Trade balance, Terms of trade, Government debt,  Political and economic instability, Employment outlook of a country. (14)
  6. It makes international travel for South Africans more expensive, It makes travelling in South Africa cheaper for foreign tourists.(4)
  7. The bank buying rate, The bank selling rate.(4)
  8. Step 1: Identify the exchange rate of the currency you need and find the ISO code. For example, the currency code of the rand is ZAR, while that of the US Dollar is USD.
    Step 2: Look up the exchange rate for your two currencies.
    Step 3: Calculate the exchange rate by looking at a currency pair (two currencies). The first currency in the pair, known as the base currency, is the transaction currency and the second currency is the payment currency. (6)
  9. (Any of the three below)
    • Imports become cheaper for the countries with strong currencies.
    • Imported products and services, especially fuel, become more affordable.
    • Exports become more expensive. Countries with strong currencies will export less as the demand will decrease.
    • Domestic manufacturing will decrease as there is less demand from both the domestic and foreign markets.
    • Fewer foreign tourists will be able to afford to visit countries with strong currencies as it will decrease their purchasing power.
    • Purchasing power strengthens for people in countries with strong currencies.
    • A strong currency has a positive effect for people planning to travel to areas with a weak currency.  (6)
  10. Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending. (4)

Term 3

Topic 1

  1. Electronic fund transfer   (2)
  2. It is safe and secure, It is efficient and fast, It is less expensive than paper cheque payments and collections, Money can be transferred throughout the world. (8)
  3. Telegraphic transfers  are a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office. Wire transfer systems are intended to provide more individualized transactions than bulk payment systems.  (4)
  4. (One of the two listed below)
    If you are stuck overseas without cash, someone at home can send you money electronically within a day OR You do not need Internet banking as the banks send the information directly to each other. (2)
  5. They can save time, No need to stand in long queues to pay a bill, People can log into their accounts at any time to get an up-to-date statement of their transactions, Low transaction costs/fees. (8)
  6. No internet access can cause late payments, There is no direct contact with the business from which a product or service is purchased, Computer crimes may result in money being stolen, Criminals record a user’s keystrokes and then use this information to illegally access accounts. (8)
  7. A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating.  (4)
  8. Cards can be used to buy expensive items as the debt can be paid off over time, They avoid having to carry large amounts of cash, Most businesses accept credit cards as a form of payment.(6)
  9. Foreign market share is the portion of the inbound tourism market that a specific country controls and includes both the number of tourists and the amount they spend. (4)
  10. Land markets and air markets.(4)

Topic 2

  1. Increase in annual volume of foreign arrivals to South Africa and increase in international awareness of South Africa as a travel destination. (4)
  2. Marketing South Africa as a destination, both domestically and internationally.  (2)
  3. Participation in major travel shows both locally and internationally, Advertising, public relations and direct mailing campaigns, Holding educational work sessions with the international partners of South Africa’s travel industry.   (6)
  4. Core markets, investment markets, tactical markets, watch-list markets, markets of strategic importance and strategic air link or hub markets.  (14)
  5. ITB (Berlin) and the World Travel Market (London)  (4)
  6. Tourism Indaba and the Getaway Show.  (4)
  7. SAT needs a great deal of funding because international marketing is expensive. Tourism Marketing Levy South Africa (TOMSA) was set up in 1998 to raise additional funds for the marketing of destination South Africa. It is a private sector initiative. South African Tourism (SAT) makes use of these funds to promote the country as a preferred tourist destination, both locally and internationally.
    The TOMSA levy is 1% of each confirmed booking. The collection of the TOMSA levy by tourism businesses is voluntary. The amounts paid are not the same as paying a tax to the business. The tourist pays the levies and the business just acts as a collector of the levies. These levies are paid to the Tourism Business Council of South Africa (TBCSA), which administrates TOMSA. (8)

Topic 3

  1. The phrase bottom line refers to the bottom line of a financial statement, called the income statement. This line shows how much profit a company has made in a particular period.(4)
  2. As international tourism continues to grow, governments have realised that tourism has more than just an economic impact on a country. Tourism also has social (people) and environmental (planet) impacts. These two aspects are added to the economic (profit) aspect to form the triple bottom line approach. If profit was the only objective, human and natural resources could be exploited so  balanced approach is required.  (4)
  3. Turning of unused appliances and fixing leaking taps.   (4)
  4. Reduce, re-use and re-cycle.  (6)
  5. Environmentally friendly building is the construction and design of new buildings, such as hotels, which are designed to have the minimal negative impact on the environment both during building and once operational.   (4)
  6. (Any three below)
    Creating awareness of sustainable tourism issues, Researching better ways of implementing and planning sustainable tourism, Advocacy of sustainable tourism issues to tourism authorities, Building capacity through training, facilitating a tourism Fair Trade certification programme, the first of its kind in the world.   (6)
  7. Corporate social investment is how companies help their communities. They set aside money, time or expertise for local nonprofit organizations to use to provide solutions for significant social problems.   (4)

Topic 4

  1. Heritage is the legacy preserved by past generations for future generations. In order to be given World Heritage status, sites must have outstanding natural, cultural or historical value and meet at least one of UNESCO’s ten selection criteria. A country can apply to the UNESCO World Heritage
    Committee for a site to be proclaimed a World Heritage Site. A place that is declared a World Heritage Site is proclaimed by the Minister of Environmental Affairs and Tourism by notice in the Government Gazette and thereafter included in the World Heritage List. An example is Robben Island. (8)
  2. UNESCO is responsible for the protection and development of heritage.  (2)
  3. Cultural: sites accorded the status on the basis of their tangible and intangible cultural heritage Natural: sites accorded status on the basis of their natural heritage
    Mixed:  sites accorded status on the basis of both cultural and natural heritage.(6)
  4. Mapungubwe Cultural Landscape, Cradle of Humankind, Richtersveld Cultural and Botanical Landscape, Robben Island, iSimangaliso (Greater St Lucia) Wetland Park, Vredefort Dome, uKhahlamba/Drakensberg Park, Cape Floral Region. (16)

Topic 5

  1. Customer feedback  is information coming directly from customers about the satisfaction or dissatisfaction they feel with a product or a service. Customer comments and complaints given to a company are an important resource for improving and addressing the needs and wants of the customer. The information is procured through written or oral surveys, online forms, emails, letters, or phone calls from the customer to the company. (4)
  2. Innovation, External performance feedback, Retaining customers, Advance warning in customer trends.  (8)
  3. Surveys, Questionnaires, Feedback cards, Follow-up calls, SMS messages on cell phones, Web-based responses.  (12)
  4. Study the feedback, Identify most common complaints, Decide on an action plan, Start the intervention process. (8)
  5. Increased sales, Customer loyalty, Enhanced public image, More effective employees, Motivated staff members, Reduced marketing costs.(12)

Term 4

Topic 1

  1. Company image, Company staff, Physical appearance and product packaging, Company customer policies, Marketing material, Company environmental policies.(12)
  2. Uniforms, Appropriate dress code, Good personal hygiene and grooming, Interaction with customers, Good communication skills.  (10)
  3. The National Defence Force, The National Intelligence Agency, The South African Secret Service, Unpaid volunteers working for charity. (8)
  4. Employer and employee details, Employment details, Payment details, Leave details, Notice/contract period. (10)
  5. Workers are not allowed to work more than 45 hours a week or nine hours a day. (2)
  6. Overtime must be paid at 1,5 times the normal wage.  (2)
  7. A code of conduct is a set of rules outlining the responsibilities of or proper practices for an individual, party or business. The code of conduct thus takes the aims and objectives of the organisation into account. The code of conduct contains procedures to follow in certain situations and requires certain behaviours.(4)
  8. South African National Parks and the Southern Africa Tourism Services Association (SATSA). (4)

English Home Language: Poetry

Title

Author

Page

Remember

C. Rossetti

2

First Day after the war

K. Mazisi

6

The Zulu Girl

R. Campbell

8

Motho ke motho ka batho babang

J. Cronin

14

A Hard Frost

CD Lewis

16

An African thunderstorm

D. Rubadiri

20

An African Elegy

Ben Okri

22

Somewhere I have never travelled

ee cummings

26

The garden of Love

W. Blake

28

Felix Randal

GM Hopkins

30

Vultures

Chinua Achebe

32

QUESTION 2: POETRY – CONTEXTUAL QUESTION

Read the poem below and then answer the questions that follow.
REMEMBER – Christina Rossetti

  1. Remember me when I am gone away,
  2. Gone far away into the silent land;
  3. When you can no more hold me by the hand,
  4. Nor I half turn to go yet turning stay.
  5. Remember me when no more day by day
  6. You tell me of our future that you plann'd:
  7. Only remember me; you understand
  8. It will be late to counsel then or pray.
  9. Yet if you should forget me for a while
  10. And afterwards remember, do not grieve:
  11. For if the darkness and corruption leave
  12. A vestige of the thoughts that once I had,
  13. Better by far you should forget and smile
  14. Than that you should remember and be sad.

2.1 Account for the repetition of the word, 'remember' throughout the poem. (2)
2.2 Refer to lines 5–8: 'Remember me when … then or pray.'
Explain what these lines suggest about the speaker's relationship with her loved one. (2)
2.3 Comment on the significance of the reference to 'the darkness and corruption' (line 11) in the context of the poem. (3)
2.4 Refer to lines 13–14: 'Better by far … and be sad.'
Critically comment on how the speaker's tone in these lines reinforces the central idea of the poem. (3) [10]

QUESTION 2: POETRY – CONTEXTUAL QUESTION
'REMEMBER' – Christina Rossetti

2.1 The repetition highlights the speaker's desire to be remembered after her death as she fears being forgotten. Initially, she wants to be in her loved one’s memory constantly. Later, she wants to be remembered only if it does not cause her loved one pain.
Candidates might refer to the repetition as reflecting the imperative tone to create a forceful and urgent appeal. They might also comment on how the repetition emphasises the depth of love the speaker feels for her loved one.
[Award 2 marks for any two relevant and distinct points.] (2)

2.2 The lines suggest a close, intimate relationship where plans are made for a shared future. The lines also allude to the active role the loved one plays in the plans; this possibly suggests his significant role in the relationship. The speaker's reminder to her loved one that a time will come when he will not be able to 'counsel' or 'pray' for her suggests that he offers her guidance, support, advice and comfort.
[Award 2 marks for any two relevant and distinct points.] (2)

2.3 Darkness suggests death and the unknown. It conveys her fear of death and a sense of foreboding of the desolation/despair that her passing might bring. The word, 'corruption' refers to the dreadful physical effects of illness which may alter the body; it also refers to the decay of the body after death. The speaker is concerned that witnessing the harsh physical manifestations of the illness will leave a sad memory of what she used to be. This might lead to a distorted image of her that would bring pain to her loved one. It is for this reason that she would rather he forget her.
[Award 3 marks only if ‘darkness’ and ‘corruption’ are discussed.] (3)

2.4 A reconciliatory, consoling and comforting tone is used. The speaker is at peace with her impending death and separation from the physical world. The two contrasting ideas, 'forget and smile' and 'remember and be sad', help to reinforce the tone of acceptance. The speaker wants her lover to be happy and continue to live a fulfilled life and not be melancholic when he remembers her.
[Award 3 marks only if the tone and central idea are fully discussed.] (3) [10]

QUESTION 2: POETRY – CONTEXTUAL QUESTION

Read the poem below and then answer the questions that follow.
REMEMBER – Christina Rossetti

  1. Remember me when I am gone away,
  2. Gone far away into the silent land;
  3. When you can no more hold me by the hand,
  4. Nor I half turn to go yet turning stay.
  5. Remember me when no more day by day
  6. You tell me of our future that you plann'd:
  7. Only remember me; you understand
  8. It will be late to counsel then or pray.
  9. Yet if you should forget me for a while
  10. And afterwards remember, do not grieve:
  11. For if the darkness and corruption leave
  12. A vestige of the thoughts that once I had,
  13. Better by far you should forget and smile
  14. Than that you should remember and be sad. 

2.1 Refer to lines 1–2: 'gone away,/Gone far away'. How do these words set the initial mood of the poem? (2)
2.2 Explain what the use of the phrase, 'the silent land' (line 2) conveys about the speaker's state of mind. (2)
2.3 Refer to line 4: 'Nor I half turn to go yet turning stay.' Discuss the significance of this description in the context of the poem. (3)
2.4 The speaker of this poem is self-centred. Do you agree with this statement? Justify your response by referring to imagery and/or diction. (3) [10]

QUESTION 2: POETRY – CONTEXTUAL QUESTION
'REMEMBER' – Christina Rossetti

2.1 The speaker’s impending death, anticipated by these words, creates a melancholic/sombre/sad/sorrowful mood./This mood creates a sense of loss and finality.
Candidates might refer to the repetition and use of long vowel sounds that create a sad mood.
[Award 2 marks only if mood is discussed.] (2)

2.2 'the silent land' is used euphemistically for death/the afterlife. She might be fearful/apprehensive of the unknown and the isolation she might experience./She might be fearful of being alone and forgotten. The speaker might also see death as mysterious and eerie. Alternatively, she might see it as a peaceful escape from her pain.
[Award 2 marks for two relevant and distinct points.] (2)

2.3 This image signifies the speaker's suspended state/state of limbo. She knows that she is going to die yet tries to prolong her life for as long as possible. For her, death is merely a 'half turn' away. However, her innate strength/determination enables her to turn toward life in order to remain with her beloved for as long as she can.
[Award 3 marks for two ideas well discussed OR three ideas.] (3)

2.4 [Candidates should recognise that a mixed response is the most appropriate response as the speaker's feelings undergo a change in the course of the poem.]
The speaker's concern with self is evident when she commands her beloved to remember her after she dies ('Remember me when I am gone away'). She implores him to remember her when he can no longer discuss their planned future together ('Remember me ... you planned'). The use of the ‘I’ pronoun indicates her self-absorption.
However, in the sestet, her focus shifts from her selfish need to be remembered to a concern for her beloved's happiness ('Better by far ... be sad'). The use of ‘you’ and the transitional ‘Yet’ reflects this change in attitude.
[A cogent 'Agree' or 'Disagree' response is unlikely; however, treat all responses on their merits.]
[Award 3 marks only if reference is made to imagery and/or diction.] (3) [10]

SECTION A: POETRY
PRESCRIBED POETRY

Answer any TWO of the following questions.
QUESTION 1: POETRY – ESSAY QUESTION
Read the poem below and then answer the question that follows.
FIRST DAY AFTER THE WAR – Mazisi Kunene

  1. We heard the songs of a wedding party.
  2. We saw a soft light
  3. Coiling round the young blades of grass
  4. At first we hesitated, then we saw her footprints,
  5. Her face emerged, then her eyes of freedom!
  6. She woke us up with a smile saying,
  7. 'What day is this that comes suddenly?'
  8. We said, 'It is the first day after the war'.
  9. Then without waiting we ran to the open space
  10. Ululating to the mountains and the pathways
  11. Calling people from all the circles of the earth.
  12. We shook up the old man demanding a festival
  13. We asked for all the first fruits of the season.
  14. We held hands with a stranger
  15. We shouted across the waterfalls
  16. People came from all lands
  17. It was the first day of peace.
  18. We saw our Ancestors travelling tall on the horizon. 

In 'First Day after the War', the speaker focuses on the celebration of new beginnings.
With close reference to diction, imagery and tone, critically discuss the validity of this statement.
Your response should take the form of a well-constructed essay of 250–300 words (about ONE page). [10]

SECTION A: POETRY
PRESCRIBED POETRY
QUESTION 1: POETRY – ESSAY QUESTION
'FIRST DAY AFTER THE WAR' – Mazisi Kunene

  • Use the following points, among others, as a guideline to marking this question. Responses might differ, depending on the candidate's sensitivity to and understanding of the poem.
  • Refer to page 24 for the rubric to assess this question.

The poem is a celebration of the end of apartheid and of new beginnings.

  • The poem deals with excitement and the desire to tell people about the dawn of a new era, which suggests a fresh start and is a symbol of hope and change.
  • The wedding metaphor symbolises celebration. It is the beginning of a new life and a time of peace and harmony. The reference to the 'songs' at the 'wedding party' conveys joyous celebration.
  • The allusion to freedom illustrates the lifting of the restrictions and oppression of the apartheid era. This is cause for jubilation.
  • 'Then without waiting we ran to the open space' conveys the people's excitement. Their joy is spontaneous, unrestrained and boundless. They erupt in celebration.
  • The word, 'suddenly' suggests that the ending of oppression and subsequent unification are unexpected pleasures to be celebrated.
  • The end of the war, together with the eradication of suffering, is met with great festivity and jubilation.
  • Words like 'calling', 'shook', 'demanding' and 'shouted' are forceful. They convey the people's enthusiasm and determination to enjoy the occasion. They are unable to contain their joy, which is expressed in wild actions.
  • The use of the onomatopoeic word, 'ululating' conveys the sound of the people's spontaneity and expression of ecstasy and elation. The word is associated with traditional forms of African celebration.
  • The repetition of 'we' emphasises the coming together of people who were previously divided. This is reinforced by their holding hands – a gesture of intimacy and comfort. There is a sense of harmony, ubuntu and accord. A common humanity is celebrated.
  • Because of the celebratory mood, people demand the 'first fruits of the season'. The occasion is so great that only the best will do. It is also an expression of gratitude for blessings bestowed.
  • The announcement of the advent of democracy is shared with all. The spirit is so infectious that people 'came from all the lands' to join the unification.
    • Even the ancestors join the celebration. They are proud and 'travelling tall'.
  • The tone initially is one of disbelief that oppression has come to an end, then restrained joy, followed by ecstatic celebration, jubilance and pride. The tone might also be celebratory/enthusiastic/excited.
    [A cogent ‘Invalid’ response is unlikely. However, treat all responses on their merits.]
    [Credit valid alternative responses.]                       [10]

SECTION A: POETRY
PRESCRIBED POETRY

Answer any TWO of the following questions.
QUESTION 1: POETRY – ESSAY QUESTION
Read the poem below and then answer the question that follows.
THE ZULU GIRL – Roy Campbell

  1. When in the sun the hot red acres smoulder,
  2. Down where the sweating gang its labour plies,
  3. A girl flings down her hoe, and from her shoulder
  4. Unslings her child tormented by the flies.
  5. She takes him to a ring of shadow pooled
  6. By thorn-trees: purpled with the blood of ticks,
  7. While her sharp nails, in slow caresses ruled,
  8. Prowl through his hair with sharp electric clicks.
  9. His sleepy mouth plugged by the heavy nipple,
  10. Tugs like a puppy, grunting as he feeds:
  11. Through his frail nerves her own deep languors ripple
  12. Like a broad river sighing through its reeds.
  13. Yet in that drowsy stream his flesh imbibes
  14. An old unquenched unsmotherable heat –
  15. The curbed ferocity of beaten tribes,
  16. The sullen dignity of their defeat.
  17. Her body looms above him like a hill
  18. Within whose shade a village lies at rest,
  19. Or the first cloud so terrible and still
  20. That bears the coming harvest in its breast. 

With close reference to the diction, imagery and tone used in this poem, discuss how the speaker explores issues of endurance and hope for the future.
Your response should take the form of a well-constructed essay of 250–300 words (about ONE page). [10]

SECTION A: POETRY
PRESCRIBED POETRY
QUESTION 1: POETRY – ESSAY QUESTION
'THE ZULU GIRL'– Roy Campbell

  • Use the following, among other points, as a guide to marking this question. Responses might differ, depending on the candidate's sensitivity to and understanding of the poem.
  • Refer to page 23 for the rubric to assess this question. 

Despite the oppression and hardship experienced by the tribe, there is a sense of optimism for a better life in the future.

  • The image, 'the hot red acres smoulder' indicates the harsh conditions under which the workers labour. The sun is so intense that the landscape appears ready to burst into flames. The reference to the' gang' suggests that its members have no identity/individuality and work under compulsion. 'Sweating' further communicates their discomfort and the intensity of the heat.
  • 'Flings' describes the frustration/exasperation experienced by the girl as well as her defiance of the system under which she labours.
  • Her child's being 'tormented by flies' reinforces the impression of unhygienic and unbearable working conditions.
  • In stanza 2, the harshness of the environment is intensified: there is little shade offered by the thorn-trees; the area is smeared with the blood of ticks –'ring of shadow … ticks'. The girl searches the child's hair for ticks, emphasising the unpleasant conditions under which she lives.
  • The intimate bond between mother and child allows the latter to imbibe not only nourishment but also her thoughts and feelings. While he 'grunts' in satisfaction, the mother's emotions 'ripple' through his 'frail nerves'. Her 'languors …sighing' might imply her partial acceptance of her current state.
  • The mother is proud of the heritage which she imparts to her son - 'old unquenched unsmotherable heat'. Although her tribe has been 'curbed' and beaten, they retain their 'dignity'. They are a fierce warrior nation that will not be quelled.
  • The comparison of the mother to a hill suggests her shielding and protecting her child and, by implication, her tribe. 'The first cloud...in its breast' foreshadows the uprising of the people against their oppressors. The girl and her son represent the potential of her nation to liberate itself.
  • 'The coming harvest' indicates the ultimate victory of the people when they reap the fruit of their uprising and overthrow their oppressors.
  • Initially, the tone is sympathetic to the plight of the girl. It changes to awe at the immense strength and endurance of a downtrodden nation. There is a tone of optimism for a better future. [10]

QUESTION 3: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
THE ZULU GIRL – Roy Campbell

  1. When in the sun the hot red acres smoulder,
  2. Down where the sweating gang its labour plies,
  3. A girl flings down her hoe, and from her shoulder
  4. Unslings her child tormented by the flies.
  5. She takes him to a ring of shadow pooled
  6. By thorn-trees: purpled with the blood of ticks,
  7. While her sharp nails, in slow caresses ruled,
  8. Prowl through his hair with sharp electric clicks.
  9. His sleepy mouth plugged by the heavy nipple,
  10. Tugs like a puppy, grunting as he feeds:
  11. Through his frail nerves her own deep languors ripple
  12. Like a broad river sighing through its reeds.
  13. Yet in that drowsy stream his flesh imbibes
  14. An old unquenched unsmotherable heat –
  15. The curbed ferocity of beaten tribes,
  16. The sullen dignity of their defeat.
  17. Her body looms above him like a hill
  18. Within whose shade a village lies at rest,
  19. Or the first cloud so terrible and still
  20. That bears the coming harvest in its breast. 

3.1 Refer to line 1: 'When in the sun the hot red acres smoulder'. How does this line set the initial mood of the poem? (2)
3.2 Explain what the word, 'flings' (line 3) suggests about the girl's state of mind. (2)
3.3 Refer to line 11: 'Through his frail nerves her own deep languors ripple'. Discuss the significance of this description in the context of the poem. (3)
3.4 The concluding stanza offers visions of the future. Do you agree with this statement? Justify your response by referring to imagery and/or diction. (3) [10]

QUESTION 3: POETRY – CONTEXTUAL QUESTION
'THE ZULU GIRL' – Roy Campbell

3.1 The mood is oppressive/unforgiving/foreboding/unbearable/stifling because of the extreme heat and discomfort experienced by the girl and the labourers.
[Award 2 marks only if mood is discussed.] (2)

3.2 The girl is part of a gang of labourers working under extreme conditions, and this action can be viewed as exasperated and an act of defiance against authority. The girl is exhausted by her physical activity and her exhaustion is compounded by having to carry her child while she works.
[Award 2 marks for two relevant and distinct points.] (2)

3.3 The act of breast feeding not only provides nourishment for the child but also transmits to him the mother's feelings and attitude. The word, 'languors' suggests that the mother is weary and despairing of the situation in which she finds herself. It might suggest that the mother transmits her strength to the child so that one day he will free his people from oppression.
Alternatively, it might be suggested that there is a sense of calmness/tenderness, at least for the present. Her innermost emotions are conveyed during this time of intimacy.
[Award 3 marks for two ideas well discussed OR three distinct ideas.] (3)

3.4 YES.
The mother represents the two visions the oppressed people of South Africa have. As the 'hill', she 'looms' over them, protecting her people who are 'a village ... at rest', implying that they will remain quietly accepting of their position. Alternatively, she is 'the cloud', bringing a 'terrible' storm which will result in a 'coming harvest'. This implies the rising up of the people against their oppressors.
OR
NO.
[A 'No' response is unlikely. However, treat all responses on their merits.]
[Award 3 marks only if reference is made to imagery and/or diction.] (3) [10]

QUESTION 7: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
FUNERAL BLUES – WH Auden

  1. Stop all the clocks, cut off the telephone,
  2. Prevent the dog from barking with a juicy bone,
  3. Silence the pianos and with muffled drum
  4. Bring out the coffin, let the mourners come.
  5. Let aeroplanes circle moaning overhead
  6. Scribbling on the sky the message He Is Dead,
  7. Put crêpe bows round the white necks of the public doves,
  8. Let the traffic policemen wear black cotton gloves.
  9. He was my North, my South, my East and West,
  10. My working week and my Sunday rest,
  11. My noon, my midnight, my talk, my song;
  12. I thought that love would last forever: I was wrong.
  13. The stars are not wanted now; put out every one;
  14. Pack up the moon and dismantle the sun;
  15. Pour away the ocean and sweep up the wood;
  16. For nothing now can ever come to any good.

7.1 Account for the speaker's desire to 'Stop all the clocks' (line 1). (2)
7.2 Suggest a reason for the use of capital letters in 'He Is Dead' (line 6). (2)
7.3 Refer to line 9: 'He was my North, my South, my East and West'. Discuss the effectiveness of this image in the context of the poem. (3)
7.4 Critically comment on how the images in the final stanza convey the speaker's attitude toward the death of his loved one. (3) [10]

QUESTION 7: POETRY – CONTEXTUAL QUESTION
'FUNERAL BLUES' – WH Aude
n
7.1 The clocks indicate normality and the passing of time. By stopping the clocks, he wants other people's normality to cease so that they can relate to his situation. The death of his loved one is so momentous that he feels the world cannot continue.
It was tradition to stop the clocks from ticking when someone in the house had died. The speaker wants the world to acknowledge the death of his loved one.
[Award 2 marks for any one idea well discussed OR any two relevant and distinct points.] (2)

7.2 The capital letters indicate the importance of the loved one in the speaker's life and emphasise the intensity of the grief he is experiencing./It creates the impression that the person who has died is a person of significance within society and thus deserving of outpourings of public grief./Capital letters draw the reader's attention to the stark finality of death.
[Award 2 marks for any one idea well discussed OR any two relevant and distinct points.] (2)

7.3 The deceased was like the points on a compass to the speaker. He provided him with guidance and played a significant role in the speaker's life. The image is effective because, like a compass, the deceased was dependable and one on whom the speaker could always rely. Now that he is dead, the speaker feels lost and without direction. The four compass points emphasise that the deceased was an important part of every aspect of the speaker's life.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3)

7.4 The speaker is devastated/distraught/despondent because he sees no future. He wants the entire universe to come to an end. All sources of light need to be extinguished because to him, everything is now dark and depressing. He wants all of nature to disappear as it is now inconsequential to him. The hyperbolic statements emphasise the intensity of his pain at the death of his loved one.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3) [10]

QUESTION 8: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
MOTHO KE MOTHO KA BATHO BABANG – Jeremy Cronin
(A Person is a Person Because of Other People)

  1. By holding my mirror out of the window I see
  2. Clear to the end of the passage.
  3. There's a person down there.
  4. A prisoner polishing a doorhandle.
  5. In the mirror I see him see
  6. My face in the mirror,
  7. I see the fingertips of his free hand
  8. Bunch together, as if to make
  9. An object the size of a badge
  10. Which travels up to his forehead
  11. The place of an imaginary cap.
  12. (This means: A warder.)
  13. Two fingers are extended in a vee
  14. And wiggle like two antennae.
  15. (He's being watched.)
  16. A finger of his free hand makes a watch-hand's arc
  17. On the wrist of his polishing arm without
  18. Disrupting the slow-slow rhythm of his work.
  19. (Later. Maybe later we can speak.)
  20. Hey! Wat maak jy daar?
  21. – a voice from around the corner.
  22. No. Just polishing baas.
  23. He turns back to me, now watch
  24. His free hand, the talkative one,
  25. Slips quietly behind
  26. – Strength brother, it says,
  27. In my mirror,
  28. A black fist. 

8.1 Explain the significance of the 'mirror' to the prisoners. (2)
8.2 Suggest a reason for the reference to 'person' (line 3) and then 'prisoner' (line 4). (2)
8.3 Refer to lines 13–14: 'Two fingers are … like two antennae.' Discuss the effectiveness of this image in the context of the poem. (3)
8.4 Refer to line 28: 'A black fist.' In your view, is this line an appropriate conclusion to the poem? Justify your response. (3) [10]
AND

QUESTION 8: POETRY – CONTEXTUAL QUESTION
'MOTHO KE MOTHO KA BATHO BABANG' – Jeremy Cronin

8.1 The mirror is used as a means of communication and allows the prisoners to bond with one another./The mirror is a reminder that there is no direct contact between the prisoners, and reinforces their isolation and deprivation.
[Award 2 marks for any one idea well discussed OR any two relevant and distinct points.] (2)

8.2 In 'person', the speaker acknowledges the humanity of the man before referring to his institutionalised state. However, in 'prisoner', the authorities merely view him as a criminal who has no worth. The prisoner is dehumanised by the authorities.
[Award 2 marks for two relevant and distinct points.] (2)

8.3 The 'antennae' are the two fingers used for communication. The description is effective because the wiggling fingers are like moving feelers. Just as insects move their antennae, using them as a sensory organ, the prisoner wiggles his fingers to show he is being watched.
Candidates might refer to the ‘antennae’ being compared to radio/TV antennae that are necessary for the reception of communication signals.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3)

8.4 YES
The poem is about togetherness/ubuntu/solidarity/power in spite of the oppression caused by apartheid policies. The black fist is a symbol of freedom, human rights and solidarity. It is an appropriate conclusion to the poem because the prisoners have been incarcerated as a result of their political activity to champion human rights. The fist is a reminder that the people's human rights have been violated but the people will not give up the fight against oppression. The solidarity of the prisoners is conveyed by the fist.
[A cogent 'No' response is unlikely. However, treat all responses on their merits.]
[Award 3 marks for any two ideas well discussed OR three ideas.] (3) [10]

QUESTION 5: POETRY – ESSAY QUESTION
Read the poem below and then answer the question that follows.
A HARD FROST – Cecil Day Lewis

  1. A frost came in the night and stole my world
  2. And left this changeling for it – a precocious
  3. Image of spring, too brilliant to be true:
  4. White lilac on the windowpane, each grass-blade
  5. Furred like a catkin, maydrift loading the hedge.
  6. The elms behind the house are elms no longer
  7. But blossomers in crystal, stems of the mist
  8. That hangs yet in the valley below, amorphous
  9. As the blind tissue whence creation formed.
  10. The sun looks out, and the fields blaze with diamonds.
  11. Mockery spring, to lend this bridal gear
  12. For a few hours to a raw country maid,
  13. Then leave her all disconsolate with old fairings
  14. Of aconite and snowdrop! No, not here
  15. Amid this flounce and filigree of death
  16. Is the real transformation scene in progress
  17. But deep below where frost
  18. Worrying the stiff clods unclenches their
  19. Grip on the seed and lets our future breathe. 

The poem describes how frost plays a role in the transformation of the landscape.
By close reference to DICTION, IMAGERY and TONE, critically discuss the validity of this statement.
Your response should take the form of a well-constructed essay of 250–300 words (about ONE page). [10]

QUESTION 5: POETRY – ESSAY QUESTION
'A HARD FROST' – Cecil Day Lewis

  • Use the following, among other points, as a guide to marking this question. Responses might differ, depending on the candidate's sensitivity to and understanding of the poem.
  • Refer to page 36 for the rubric to assess this question.

VALID
The speaker depicts a winter's morning that has been transformed into an image of spring by the harsh winter frost. Despite spring's early arrival being an illusion, the frost plays a powerful transformative role in nourishing new life below the surface of the ground.

  • The appearance of the landscape is altered by the arrival of the frost. The word, 'changeling' suggests that a secret, magical exchange has apparently occurred overnight. 'Stole' conveys the speaker's surprise when he views the unexpected transformation.
  • The patterns created by the frost are compared to spring flowers. This gives the false illusion that spring has arrived.
  • The frost glistens like diamonds and crystal in the sun, but this brilliance will not last as the dreariness of the winter will soon return. This is simply a temporary transformation of the landscape. The reference to 'Mockery spring' reinforces the superficiality of the scene by suggesting the deceptiveness of the frost.
  • The white frost coating the countryside is compared to a 'raw country maid' wearing a beautiful bridal outfit. The rural environment temporarily exhibits a beautiful, refined appearance, but once the frost has melted, the winter scene will once again be revealed. The superficiality ('bridal gear') will return to the reality of average looking ('old fairings').
  • The current landscape is one of 'flounce' and 'filigree': it is overly ornamented. Once the frost melts, it will prove to have been unnatural and overdone/excessive. 
  • While the surface appears fairylike, the real transformation is happening below the surface. Although the frost seems to have a frozen hold over the clods of earth, its grasp is slowly being released and the seeds of the true flowers will be set free. The personification effectively conveys the grip the frost has over the soil: it is like a clenched fist which is slowly opening.
  • The frost has produced an image of the beauty of a spring morning. However, the beauty of 'the real transformation' is in progress 'deep below', not above the surface. The advent of spring is already underway, even though it is still winter. Once spring arrives, it will result in a ‘permanent’ transformation of the landscape.
  • Initially, the speaker's tone is one of admiration and amazement because the scene he views is so surprising. However, his tone might be disapproving when he describes the temporary nature of the 'bridal gear' and the frost as mocking people with the illusion of spring's arrival. He condescendingly refers to the 'filigree' and 'flounce' of the scene.
  • Finally, the speaker's tone reveals his awe of and respect for the power of nature and spring in the last three lines of the poem.
    [A cogent 'Invalid' response is unlikely. However, treat all responses on their merits.] [Accept valid alternative responses.] [10]

QUESTION 3: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
A HARD FROST – Cecil Day Lewis

  1. A frost came in the night and stole my world
  2. And left this changeling for it – a precocious
  3. Image of spring, too brilliant to be true:
  4. White lilac on the windowpane, each grass-blade
  5. Furred like a catkin, maydrift loading the hedge.
  6. The elms behind the house are elms no longer
  7. But blossomers in crystal, stems of the mist
  8. That hangs yet in the valley below, amorphous
  9. As the blind tissue whence creation formed.
  10. The sun looks out, and the fields blaze with diamonds.
  11. Mockery spring, to lend this bridal gear
  12. For a few hours to a raw country maid,
  13. Then leave her all disconsolate with old fairings
  14. Of aconite and snowdrop! No, not here
  15. Amid this flounce and filigree of death
  16. Is the real transformation scene in progress
  17. But deep below where frost
  18. Worrying the stiff clods unclenches their
  19. Grip on the seed and lets our future breathe. 

3.1 Refer to line 1: 'A frost came in the night and stole my world'. What impression of the frost is created in this line? (2)
3.2 Refer to line 3: 'Image of spring, too brilliant to be true'. How do these words contribute to your understanding of the speaker's feelings? (2)
3.3 Refer to lines 11–14: 'Mockery spring …'/'aconite and snowdrop!' Discuss how the imagery in these lines conveys the speaker's tone. (3)
3.4 Refer to lines 17–19: 'But deep below …'/'our future breathe.' Comment on how these lines capture the central idea of the poem. (3) [10]

QUESTION 3: POETRY – CONTEXTUAL QUESTION
'A HARD FROST'– Cecil Day Lewis

3.1 The personification/comparison of the frost to a thief is disturbing: it suggests that the frost works silently and stealthily, taking that which does not belong to it.
[Award 2 marks for one idea well discussed.] (2)

3.2 While the speaker is delighted at the transformation of his world from the bleak harsh landscape of winter, he is equally pensive in that he knows that this transformation is temporary/effectively illusory.
[Award 2 marks for two relevant and distinct points.] (2)

3.3 The winter landscape is metaphorically compared to a plain/an unattractive country maid who is transformed on her wedding day by her bright and beautiful bridal outfit. Her beauty is short-lived since after her wedding she will return to her old self, as will the landscape after the frost has melted. The speaker's tone is of disappointment that this beauty is short-lived, and perhaps, he is disparaging of the frost's trickery.
[Award 3 marks only if tone is discussed.] (3)

3.4 The speaker looks forward to the new cycle of life as the frost nudges the earth to release the seeds that will sprout in Spring, which will signify an end to the hardships of winter. The transformation in nature might possibly be equated to transformation in the life of people who experience hardship but can still look forward to a future that has the potential for a better life.
[Award 3 marks for two ideas/interpretations well discussed.] (3) [10]

QUESTION 4: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
AN AFRICAN THUNDERSTORM – David Rubadiri

  1. From the west
  2. Clouds come hurrying with the wind
  3. Turning
  4. Sharply
  5. Here and there
  6. Like a plague of locusts
  7. Whirling
  8. Tossing up things on its tail
  9. Like a madman chasing nothing.

  10. Pregnant clouds
  11. Ride stately on its back
  12. Gathering to perch on hills
  13. Like dark sinister wings;
  14. The Wind whistles by
  15. And trees bend to let it pass.

  16. In the village
  17. Screams of delighted children
  18. Toss and turn
  19. In the din of whirling wind,
  20. Women –
  21. Babies clinging on their backs –
  22. Dart about
  23. In and out
  24. Madly
  25. The Wind whistles by
  26. Whilst trees bend to let it pass.
  27. Clothes wave like tattered flags
  28. Flying off
  29. To expose dangling breasts
  30. As jaggered blinding flashes
  31. Rumble, tremble, and crack
  32. Amidst the smell of fired smoke
  33. and the pelting march of the storm.

4.1 Refer to line 9: 'Like a madman chasing nothing.' What impression of the wind is conveyed by this description? (2)
4.2 Suggest how the word, 'sinister' (line 13) contributes to the mood of the poem. (2)
4.3 Refer to lines 20–24: 'Women – /Babies clinging … In and out/Madly'. Discuss how these lines convey the attitude of the women towards the storm. (3)
4.4 Refer to lines 30–33: 'As jaggered blinding …'/'of the storm.' Comment on whether these lines are an appropriate conclusion to the poem. (3) [10]
AND

QUESTION 4: POETRY – CONTEXTUAL QUESTION
'AN AFRICAN THUNDERSTORM' – David Rubadiri

4.1 The impression is that the wind is unpredictable/out of control and dangerous, bringing with it chaos and disruption.
[Award 2 marks for one idea well discussed.] (2)
4.2 'Sinister' has connotations of something that is evil, frightening and destructive. The mood is oppressive, ominous and foreboding.
[Award 2 marks only if mood is discussed.] (2)
4.3 The women's panicked state and anxiety reflect their fearful attitude toward the storm. Their rushing about gathering their possessions and their children creates a sense of urgency. The children's having to cling to their mothers' backs intensifies the agitation of the mothers and their determination to protect their children. They dread the havoc that the storm might cause.
[Award 3 marks for two ideas well discussed OR three ideas.] (3)
4.4 The conclusion is appropriate because the title creates the expectation that the poem is about a thunderstorm. The poem's focus is on the build-up to the storm. By focusing on the elements of the wind and the clouds, the speaker gives them a significance and power of their own. They are the harbingers alerting people to the approach of the storm. The lightning flash and the rumbling thunder create tension as the reader anticipates the final eruption of the storm.
Candidates might see the thunderstorm as an extended metaphor for the destructive effects of colonialism. Credit such responses on their merits.
Candidates might suggest that the conclusion is not appropriate since the storm does not actually break, despite its build-up having been described throughout the poem. It ends anti-climactically.
[Award 3 marks for two ideas well discussed OR three ideas.] (3) [10]

QUESTION 4: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
AN AFRICAN ELEGY – Ben Okri

  1. We are the miracles that God made
  2. To taste the bitter fruit of Time.
  3. We are precious.
  4. And one day our suffering
  5. Will turn into the wonders of the earth.

  6. There are things that burn me now
  7. Which turn golden when I am happy.
  8. Do you see the mystery of our pain?
  9. That we bear poverty
  10. And are able to sing and dream sweet things

  11. And that we never curse the air when it is warm
  12. Or the fruit when it tastes so good
  13. Or the lights that bounce gently on the waters?
  14. We bless things even in our pain.
  15. We bless them in silence.

  16. That is why our music is so sweet.
  17. It makes the air remember.
  18. There are secret miracles at work
  19. That only Time will bring forth.
  20. I too have heard the dead singing.

  21. And they tell me that
  22. This life is good
  23. They tell me to live it gently
  24. With fire, and always with hope.
  25. There is wonder here

  26. And there is surprise
  27. In everything the unseen moves.
  28. The ocean is full of songs.
  29. The sky is not an enemy.
  30. Destiny is our friend. 

4.1 Refer to line 8: 'Do you see the mystery of our pain?' Suggest a reason for the inclusion of the rhetorical question. (2)
4.2 Refer to line 9: 'That we bear poverty'.
Explain what the word, 'bear' implies about the local people. (2)
4.3 Refer to lines 16–17: 'That is why … the air remember.' Comment on the significance of the music's being 'so sweet' that it 'makes the air remember'. (3)
4.4 Refer to the final stanza. Critically comment on how the speaker's tone conveys the central idea of the poem. (3) [10]
AND

QUESTION 4: POETRY – CONTEXTUAL QUESTION
'AN AFRICAN ELEGY' – Ben Okri

4.1 The rhetorical question emphasises the inexplicable nature of the people's reaction to their suffering. The mystery lies in their ability to 'sing and dream sweet things' despite their hardship. The speaker is puzzled by their magnanimous reaction.
Candidates might refer to the reaction of the people's being paradoxical as they are able to express joy despite their pain.
[Award 2 marks for any one point well discussed.] (2)
4.2 The local people's problems are a burden which they put up with without anger. They endure and tolerate their hardship without distress or annoyance. They are accepting of their suffering and are prepared to live with it. The word conveys the extent and relentlessness of their suffering.
[Award 2 marks for any two relevant and distinct points.] (2)
4.3 The music is gratifying/rewarding/pleasurable/harmonious. It is significant because it is an expression of the people's optimistic attitude to life. The air 'remembers' because people are aware of the music even after it has ended. Its impact on the surroundings resonates and the feeling of upliftment endures.
Candidates might refer to the sounds carried by the air as being a reminder of the close spiritual connection between nature and the ancestors.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3)
4.4 The tone is optimistic/contemplative/meditative/thoughtful. The speaker is in awe of the magical quality of nature and life. He focuses on the promise of a better life and the need to be in harmony with our world. The speaker's tone reflects his amazement at the people's faith and endurance. The message of the poem is that Africans are eternally hopeful in spite of hardship. They are able to find positives even in difficult situations.
[Award 3 marks only if the tone and central idea are fully discussed.] (3) [10]

QUESTION 6: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
AN AFRICAN ELEGY – Ben Okri

  1. We are the miracles that God made
  2. To taste the bitter fruit of Time.
  3. We are precious.
  4. And one day our suffering
  5. Will turn into the wonders of the earth.

  6. There are things that burn me now
  7. Which turn golden when I am happy.
  8. Do you see the mystery of our pain?
  9. That we bear poverty
  10. And are able to sing and dream sweet things

  11. And that we never curse the air when it is warm
  12. Or the fruit when it tastes so good
  13. Or the lights that bounce gently on the waters?
  14. We bless things even in our pain.
  15. We bless them in silence.

  16. That is why our music is so sweet.
  17. It makes the air remember.
  18. There are secret miracles at work
  19. That only Time will bring forth.
  20. I too have heard the dead singing.

  21. And they tell me that
  22. This life is good
  23. They tell me to live it gently
  24. With fire, and always with hope.
  25. There is wonder here

  26. And there is surprise
  27. In everything the unseen moves.
  28. The ocean is full of songs.
  29. The sky is not an enemy.
  30. Destiny is our friend. 

6.1 Refer to line 3: 'We are precious.' Account for the use of the word, 'precious' in the context of the first stanza. (2)
6.2 Suggest a reason for the repetition of the word, 'And' throughout the poem. (2)
6.3 Refer to line 13: 'Or the lights that bounce gently on the waters?' Discuss the effectiveness of this image in the context of the poem. (3)
6.4 Refer to lines 22–24: 'This life is good …gently/With fire'. Critically comment on the contradictory advice given to the speaker by the ancestors. (3) [10]

QUESTION 6: POETRY – CONTEXTUAL QUESTION
'AN AFRICAN ELEGY' – Ben Okri

6.1 The word conveys how valuable, special and unique the African people are./ They endure hardship without complaint and remain hopeful. The speaker praises and motivates the people to remain optimistic.
[Award 2 marks for one idea well discussed OR any two relevant and distinct points.] (2)
6.2 The word, 'and' conveys the never-ending suffering. One problem is compounded and followed by another. There is no respite for the people. The repetition also conveys the people's resilience. They remain optimistic and never become despondent. The word also suggests that when the people are released from their suffering, there will be multiple rewards.
[Award 2 marks for any two relevant and distinct points.] (2)
6.3 The lights and gentleness of the image convey the people's sense of hope, optimism and forgiveness. In spite of their hardships, the people see and appreciate the beauty around them. They remain tolerant and are not bitter. The word, 'bounce' conveys lightness. The people are able to set their burdens and suffering aside and appreciate nature and the goodness in their lives.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3)
6.4 The speaker is advised to live life 'gently'. He should be kind, have compassion and show sensitivity and understanding. However, he is also urged to live life with 'fire'. He should be spirited/passionate, never surrender and stand up to oppression. This advice is uplifting and inspiring because it encourages people to live life to the full while not allowing their animosities to overpower their humanity.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3) [10]

QUESTION 3: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
somewhere i have never travelled,gladly beyond – ee cummings 

  1. somewhere i have never travelled,gladly beyond
  2. any experience,your eyes have their silence:
  3. in your most frail gesture are things which enclose me,
  4. or which i cannot touch because they are too near

  5. your slightest look easily will unclose me
  6. though i have closed myself as fingers,
  7. you open always petal by petal myself as Spring opens
  8. (touching skilfully,mysteriously)her first rose

  9. or if your wish be to close me,i and
  10. my life will shut very beautifully,suddenly,
  11. as when the heart of this flower imagines
  12. the snow carefully everywhere descending;

  13. nothing which we are to perceive in this world equals
  14. the power of your intense fragility:whose texture
  15. compels me with the colour of its countries,
  16. rendering death and forever with each breathing

  17. (i do not know what it is about you that closes
  18. and opens;only something in me understands
  19. the voice of your eyes is deeper than all roses)
  20. nobody,not even the rain,has such small hands 

3.1 Refer to lines 1–2: 'somewhere i have never travelled,gladly beyond/any experience'. What impression of the speaker is created by the use of 'gladly' (line 1)? (2)
3.2 'Spring' (line 7) is the only word that is capitalised in the poem. Explain the effect of this capitalisation in context. (2)
3.3 Refer to line 4: 'or which i cannot touch because they are too near'. Discuss the significance of the paradox in this line. (3)
3.4 Refer to lines 17–19: '(i do not … than all roses)'. Critically comment on how the speaker's tone in these lines reinforces the central idea of the poem. (3) [10]

QUESTION 3: POETRY – CONTEXTUAL QUESTION
'somewhere i have never travelled, gladly beyond' – ee cummings
3.1 The speaker is enthusiastic about, and open to, the new possibilities in his life. Although it is the unknown, the anticipation fills him with excitement. He welcomes the thought of the adventure and looks forward to the experience.
[Award 2 marks for any two relevant and distinct points.] (2)
3.2 By capitalising the word, the importance and power of Spring is recognised. Spring is the giver of life and transforms the winter landscape into something of beauty. Like Spring, his beloved has transformed him by bringing love into his life.
[Award 2 marks for any two relevant and distinct points.] (2)
3.3 The speaker's inability to touch something despite its nearness is contradictory. His feelings for his beloved are 'too near' to his heart/an intimate part of him and he is reluctant to expose himself as he is afraid that his love makes him vulnerable/defenceless to potential heartbreak and pain.
[Award 3 marks for any two ideas well discussed OR three ideas.] (3)
3.4 The speaker's tone is of admiration/awe/wonder/reverence. He finds it amazing that her mere presence can overwhelm his senses, thoughts and emotions. The expression in her eyes conveys the intensity of her love for him. The unusual connection the speaker makes between the senses suggests that even without words, there is communication and understanding between the lovers. The description conveys the idea of love's being inexplicable, mysterious and spiritual. There is no logic to explain why his beloved is able to exert absolute power over him yet instinctively he is willing to accede to her.
[Award 3 marks only if the tone and central idea are discussed.] (3) [10]

QUESTION 2: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
THE GARDEN OF LOVE – William Blake

  1. I went to the Garden of Love,
  2. And saw what I never had seen:
  3. A Chapel was built in the midst,
  4. Where I used to play on the green.

  5. And the gates of this Chapel were shut,
  6. And 'Thou shalt not' writ over the door;
  7. So I turn'd to the Garden of Love
  8. That so many sweet flowers bore;

  9. And I saw it was filled with graves,
  10. And tomb-stones where flowers should be;
  11. And Priests in black gowns were walking their rounds,
  12. And binding with briars my joys and desires. 

2.1 Refer to line 1: 'I went to the Garden of Love'. How does the word, 'Garden' create an expectation in the mind of the reader? (2)
2.2 Refer to lines 3–4: 'A Chapel was …'/'on the green.' Explain the significance of these lines in the context of the poem. (2)
2.3 Refer to lines 5–6: 'And the gates …'/'over the door'. Discuss how the diction in these lines contributes to the speaker's tone. (3)
2.4 Refer to the final stanza: 'And I saw ...'/'joys and desires.' Comment on how these lines convey the central idea of the poem. (3) [10]

QUESTION 2: POETRY – CONTEXTUAL QUESTION
'THE GARDEN OF LOVE' – William Blake

2.1 The reader will expect the speaker to enter an area/state of being that is open, free and beautiful. It is a place of peace and tranquillity./The allusion to the Biblical Garden of Eden creates the expectation of spiritual perfection and natural beauty.
[Award 2 marks for one idea well discussed.] (2)
2.2 The Chapel should have offered a joyful experience. However, the speaker is indicating how the Chapel and, by implication, organised religion has intruded on his pleasant, carefree childhood memories. The line indicates Blake's disapproval of the invasive and destructive nature of authoritarian religion.
[Award 2 marks for two relevant and distinct points.] (2)
2.3 The words, 'gates' and 'shut' have connotations of restriction and loss of free will. In addition, they suggest a lack of welcome. The admonition, 'Thou shalt not' alludes to the Old Testament/Ten Commandments which forbade certain behaviours and reinforces the sense of restriction. This accounts for the speaker's indignant/angry/disappointed/dismayed tone.
[Award 3 marks only if tone is discussed.] (3)
2.4 Instead of life flourishing ('flowers'), the garden is now associated with death as it is filled with 'graves' and 'tomb-stones'. The priests in black gowns are like sinister figures on patrol. These lines reflect the speaker's criticism of authoritarian religion's depriving one of joy. He sees such religion as cruelly restrictive ('binding with briars my joys and desires') of individual freedom and fulfilment.
[Award 3 marks for two ideas/interpretations well discussed.] (3) [10]

SECTION A: POETRY
PRESCRIBED POETRY

Answer any TWO of the following questions.
QUESTION 1: POETRY – ESSAY QUESTION
Read the poem below and then answer the question that follows.
FELIX RANDAL – Gerard Manley Hopkins

  1. Felix Randal the farrier, O he is dead then? my duty all ended,
  2. Who have watched his mould of man, big-boned and hardy-handsome 
  3. Pining, pining, till time when reason rambled in it and some
  4. Fatal four disorders, fleshed there, all contended?

  5. Sickness broke him. Impatient he cursed at first, but mended
  6. Being anointed and all; though a heavenlier heart began some 
  7. Months earlier, since I had our sweet reprieve and ransom
  8. Tendered to him. Ah well, God rest him all road ever he offended! 

  9. This seeing the sick endears them to us, us too it endears.
  10. My tongue had taught thee comfort, touch had quenched thy tears, 
  11. Thy tears that touched my heart, child, Felix, poor Felix Randal; 

  12. How far from then forethought of, all thy more boisterous years, 
  13. When thou at the random grim forge, powerful amidst peers,
  14. Didst fettle for the great grey drayhorse his bright and battering sandal! 

In 'Felix Randal', the speaker contemplates what he sees as significant aspects of the life and death of the farrier.
With close reference to diction, imagery and tone, discuss how the above statement is reflected in the poem.
Your response should take the form of a well-constructed essay of 250–300 words (about ONE page). [10]

SECTION A: POETRY
PRESCRIBED POETRY
QUESTION 1: POETRY – ESSAY QUESTION
'FELIX RANDAL' – Gerard Manley Hopkins

  • Use the following, among other points, as a guide to marking this question. Responses might differ, depending on the candidate's sensitivity to and understanding of the poem.
  •  Refer to page 24 for the rubric to assess this question.
  • The speaker expresses admiration for the manner in which the farrier lived. He was a 'big-boned' and 'hardy-handsome' man who required brute strength to perform his job. He worked with great force at his 'random grim forge' as he hammered the horseshoe into place. The speaker imagines him standing powerful and grim at the fire as he prepared the drayhorse's 'sandal'.
  • In life, Felix Randal was a productive individual, lively and 'boisterous'. He was respected for his work and 'powerful amidst peers'. This contrasts with his being described as a ‘child’ when his health is compromised by disease.
  • The focus then shifts to Felix's physical decline. The speaker notes how the farrier was debilitated by illness. The 'mould' that was so strong and powerful lost its shape as the farrier faded away ('pining, pining') until his thoughts became confused ('reason rambled').
  • In stanza 2, the speaker realises that his ministering to Felix had the effect of making Felix more accepting of his plight. Despite Felix's initial frustration and impatience ('impatient he cursed'), he became more tolerant ('a heavenlier heart began').
  • Realising Felix's death is imminent, the speaker prepares Felix by 'tend[ing] to him' and offering him the sacrament of the Holy Communion ('sweet reprieve and ransom'), which carries the promise of forgiveness and a new life. He offers him the final rites ('Being anointed') in order to prepare his soul for its release. Through this process, the speaker forges a bond of compassion and trust with Felix. The speaker registers with melancholy/tenderness that Felix reconciled himself to his fate in a truly Christian manner.
  • The speaker comes to the realisation that he has become more compassionate/empathic as a result of his association with Felix. Stanza 3 focuses on the sympathetic relationship of the two men. 'This seeing the sick endears them to us' indicates that an intimate bond developed between the two men.
  • The speaker eased the pain and discomfort that Felix experienced ('My tongue had taught thee comfort'). Felix's tears touched the speaker's heart and this accounts for the latter's sense of loss and mourning at his death.
  • The tone is initially detached/dispassionate/unaffected/matter-of-fact but shifts to being contemplative, grieving and compassionate.
    [Credit valid alternative responses.] [10]Copyright reserved Please turn over

QUESTION 4: POETRY – CONTEXTUAL QUESTION
Read the poem below and then answer the questions that follow.
VULTURES – Chinua Achebe

  1. In the greyness
  2. and drizzle of one despondent
  3. dawn unstirred by harbingers
  4. of sunbreak a vulture
  5. perching high on broken
  6. bone of a dead tree
  7. nestled close to his
  8. mate his smooth
  9. bashed-in head, a pebble
  10. on a stem rooted in
  11. a dump of gross
  12. feathers, inclined affectionately
  13. to hers. Yesterday they picked
  14. the eyes of a swollen
  15. corpse in a water-logged
  16. trench and ate the
  17. things in its bowel. Full
  18. gorged they chose their roost
  19. keeping the hollowed remnant
  20. in easy range of cold
  21. telescopic eyes ...
  22. Strange
  23. indeed how love in other
  24. ways so particular
  25. will pick a corner
  26. in that charnel-house
  27. tidy it and coil up there, perhaps
  28. even fall asleep – her face
  29. turned to the wall!
  30. ... Thus the Commandant at Belsen
  31. Camp going home for
  32. the day with fumes of
  33. human roast clinging
  34. rebelliously to his hairy
  35. nostrils will stop
  36. at the wayside sweet-shop
  37. and pick up a chocolate
  38. for his tender offspring
  39. waiting at home for Daddy's
  40. return ...
  41. Praise bounteous
  42. providence if you will
  43. that grants even an ogre
  44. a tiny glow-worm
  45. tenderness encapsulated
  46. in icy caverns of a cruel
  47. heart or else despair
  48. for in the very germ
  49. of that kindred love is
  50. lodged the perpetuity
  51. of evil. 

4.1 Refer to lines 1–3: 'In the greyness/and drizzle of one despondent/dawn'. How do these lines contribute to the mood of the first section? (2)
4.2 What do the words, 'cold/telescopic eyes' (lines 20–21) suggest about the nature of the vultures? (2)
4.3 Refer to lines 30–35: 'Thus the Commandant … his hairy/nostrils'. Discuss the significance of this description in the context of the poem. (3)
4.4 The concluding lines, 'Praise bounteous/providence … perpetuity/of evil' (lines 41–51) offers options for human behaviour.
Do you agree with this statement? Justify your response by referring to imagery and/or diction. (3) [10]
AND

QUESTION 4: POETRY – CONTEXTUAL QUESTION
'VULTURES' – Chinua Achebe

4.1 The dark side of the vultures as described in Section One contributes to the down-hearted/dull/gloomy/hopeless mood.
[Award 2 marks only if mood is discussed.] (2)
4.2 As scavengers, the vultures keep their kill within their sights. 'Cold' might suggest that the vultures are ruthless/calculating/emotionless. ‘Telescopic’ suggests the mechanical/robotic nature of the vultures, giving them the advantage of long-distance vision that ensures the protection of their spoils.
[Award 2 marks only if a discussion of both 'cold' and 'telescopic' is offered.] (2)
4.3 The Commandant ends his day like any ordinary worker returning to his family after work. However, this Commandant has not had an ordinary day at work in that he has been directly involved in the atrocious sins committed against a huge number of people as indicated by the ‘fumes of human roast clinging’.
Candidates might suggest that this shocking/horrifying/repulsive description signifies mankind's inhumanity toward their fellow beings; this is similar to the description of the vultures in Section One. The vultures instinctively feed their bodies to survive however, man kills in order to satisfy his selfish desires.
[Award 3 marks for two ideas well discussed OR three distinct ideas.] (3)
4.4 YES.
The Commandant, who is referred to as the 'ogre', has an element of goodness for which one needs to be grateful/hopeful – 'Praise bounteous providence'. His humanity is seen as a 'tiny glow worm' which suggests that he has the potential for love. However, the reference to the 'icy caverns of a cruel/heart' creates a sense of despair/hopelessness as it is too little to transform the evil 'lodged' within him. Thus he will continue to perpetrate/perpetuate evil.
OR
NO.
[A 'No' response is unlikely. However, treat all responses on their merits.] [Award 3 marks only if reference is made to imagery and/or diction.]
[Award 3 marks only if candidates refer to both options.] (3) [10]

FORMS OF PAYMENT WHEN TRAVELLING INTERNATIONALLY

Type of Payment 

Examples 

ADVANTAGES  

DISDVANTAGES 

ELECTRONIC FUND TRANSFER
                  (EFT)
1

 

Internet / telephone banking 

  • Saves time you can do EFT from home
  • No need to use credit card or provide credit card info online
  • Secure you instruct your bank to transfer money to a beneficiary account 
  • Online Security  is a concern
  • Reliable Internet connection is essential for payments.
  • Can take a few days for funds to reach the beneficiary

Telegraphic transfers
(SWIFT transfers) 
2

  

Cash send (ABSA) 

  • it is good method when you do not have access to a bank account.
  • it is more secure and desirable.
  • Can save paper needed for checks and deposit slips.
  • the seller can provide false information to the sender.
  • Cash can be collected at the receiving end under the false ID

Internet Payments
3

  

Pay pal (FNB),  

ALERT PAY,  Liberty reserve and Pay Fast 

  • No need to carry cash
  • Saves Time.
  • no need  to go to retail shops as you can shop online 
  • Security is the major concern
  • Reliable Internet connection is essential  

Bank Drafts
4

Bank guaranteed cheque 

  • It is a cheaper method of sending money.
  • It  is better than personal cheque
  • It can be made out to pay a named account to give it absolute security
  • Long time (up to two weeks) to make a deposit 

Foreign Bank Notes
5

  

Cash 

  • Cash is easy to exchange.
  • It can be used widely.
  • All places accept cash without any problems.  
  • Cash can easy be stolen and cannot be traced.
  • Cash would have to be exchanged to be used in a foreign country. 

Credit Card
6
  

Visa, MasterCard,  American Express, Diners  Club 

  • if you lose your credit card, you can always just get it blocked.
  • No need to carry too much cash around.
  • one of the best ways to transact abroad 
  • There are a lot of places that don’t accept certain credit cards.
  • If lost, it can take a while to block it.   

Travellers Cheques
7

 

pre-printed cheques 

  • Are safer to carry around
  • Can be replaced should they be stolen or lost. 
  • regarded as outdated by many tourists
  • Can inconvenience you by paying exchange rate when you want to convert it into another currency  

Preloaded Debit Cards
8

  

  • Cash Passport card
  • Travel Wallet
  • International  Travel Card 
  • Simple and one of the best ways to carry money abroad.  
  • Quite limited in their coverage
  • There will be charges on the amount of money you get in your account. 
Monday, 06 December 2021 08:43

Budgeting Questions and Answers Grade 12

QUESTIONS

ACTIVITY 1:

The information provided below relates to Brakpan Stationers.

REQUIRED:
1.1 Explain the importance of comparing budgeted figures with actual figures achieved for the same period. (2)
1.2 Calculate the missing amounts (indicated by a, b and c) in the Debtors’ Collection Schedule for the budgeted period March to May 2015. (4)
1.3 Calculate the following budgeted figures:
1.3.1 Total sales for March 2015. (2)
1.3.2 Payments to creditors during May 2015. (4)
1.3.3 Salaries of the shop assistants for April 2015. (3)
1.3.4 The % increase in the salary of the manager expected in May 2015. (3)
1.3.5 Amount of the additional loan expected to be acquired on 1 April 2015. (3)
1.4 An official of the local municipality has offered to recommend Brakpan Stationers supply the municipality with stationery to the value of R500 000.
However, he will only do this if he receives a cash payment of R20 000 from the owner.
What advice would you offer? State TWO points. (4)
1.5 The owner’s wife is angry that he has not been adhering to the cash budget. The owner says that he deliberately did not keep to the budget because he wanted to improve the overall results of the business.

  • Identify THREE over-payments in April. Provide the figures to support your answer.
    Provide a valid reason for each over-payment to support the owner’s decisions. (6)
  • Explain how the difference of opinion with his wife can be avoided in future. (2)
  • State TWO other strategies that the owner and his wife could consider in future to improve the results of the business. (2)

INFORMATION

  1. Sales and debtors’ collection:
    • TOTAL sales for April 2015 and May 2015 have been estimated as follows:
      April 2015   70 000 
      May 2015  78 750
    • 80% of all sales are cash sales. The rest of the sales are on credit.
    • Debtors are expected to pay as follows:
      • 60% within the month of sale, subject to a 4% discount.
      • 38% in the month following the month of sale.
      • 2% of debts are written off in the second month following the month of sale.
    • Debtors’ collection schedule:
        CREDIT SALES R  MARCH  R  APRIL  R  MAY R
      February  31 500 11 970    
      March 10 500  a 3 990  
      April 14 000   8 064 b
      May c      
            18 018 12 054 
  2. Purchase of merchandise and payments to creditors:
    • A fixed-stock base is kept, i.e. the stock sold is replaced at the end of that month.
    • The business uses a mark-up of 75% on cost.
    • 70% of all merchandise is purchased on credit.
    • Creditors are paid in full in the month following the month of purchase.
  3. Salaries:
    Shop assistants
    • The business has 12 shop assistants who are employed on equal pay in March 2015.
      Nine of the shop assistants are entitled to a bonus equal to 80% of the monthly salary in April 2015.
    • All shop assistants will receive a general increase in May 2015.
  4. Loan:
    An additional loan will be taken from Atlantic Bank on 1 April 2015. The interest rate is 14% p.a.
  5. Extract from the Cash Budget for the three months ending 31 May 2015:
RECEIPTS   MARCH  APRIL   MAY 
  Budgeted Budgeted  Actual Budgeted
 Cash sale of stock   42 000   56 000   59 200   63 000
 Collections from debtors   18 018   12 054    12 800  ?
 Rent income   5 600   6 160   6 160   6 160
 Additional loan acquired  0  ?  ?  0
 PAYMENTS          
 Cash purchase of stock   9 000   12 000  28 000  13 500
Payment to creditors  58 500  21 000  21 000  ?
Salaries of shop assistants 102 000  ? ? 110 160
Salary of manager  16 000   16 000  40 000 19 200
Interest on loan (14% p.a.) 6 300 7 175 7 175 7 175
Delivery expenses to customers 9 200 9 200 0 9 200
Insurance (paid annually)  0 27 000 27 000 -
Advertising  0 0 0 20 000
Purchase of vehicle 0 0 180 000  0
Vehicle expenses 0 0 4 000 4 000
Sundry expenses 5 300  5 300  5 300  5 800

ACTIVITY 2:

You are provided with a partially completed Projected Income Statement for Dawn Distributors for the period 1 October 2015 to 31 December 2015. It was prepared by the bookkeeper.

REQUIRED:
2.1 List TWO items on the Projected Income Statement,that would not appear on a Cash Budget. (2)
2.2 Fill in the missing amounts denoted by A to E on the Projected Income Statement. (16)
2.3 Take the following additional information into account and calculate the following:
2.3.1 The percentage increase in the wages of cleaners in December 2015. (4)
2.3.2 The monthly salary due to the sales manager in December 2015. (4)
2.3.3 Total credit sales expected in December 2015. (3)
2.3.4 The balance of the loan on 1 November 2015. (3)

INFORMATION:

  1. The business uses a mark-up percentage of 60% on cost.
  2. Credit sales comprise 75% of total sales.
    Sales are expected to increase by 10% per month and by 20% during December.
  3. The business employs a sales manager and an administration manager. The sales manager earns R300 more than the administration manager (per month). The managers are entitled to an increase of 8% p.a. from 1 December 2015.
  4. R20 000 of the loan is repayable on 30 November 2015. Interest on loan at 9% p.a. is payable every quarter. The next payment is due on 1 January 2016.
  5. Advertising expense per month is budgeted at a fixed percentage of total sales.
  6. Income tax is estimated to be 30% of the net profit before tax. 

G. INFORMATION FROM THE PROJECTED INCOME STATEMENT FOR OCTOBER TO DECEMBER 2015.

 

OCTOBER

NOVEMBER

DECEMBER

 

BUDGETED

ACTUAL

BUDGETED

BUDGETED

Sales

120 000

98 400

132 000

?

Cost of sales

75 000

58 800

B

99 000

Gross profit

A

 

?

?

Other income

20 700

18 200

20 700

21 200

Rent income

10 000

10 000

10 000

10 000

Discount received

1 200

1 000

1 200

1 200

Commission income

9 500

7 200

9 500

10 000

Gross operating income

       

Operating expenses

48 300

 

?

?

Salaries (managers)

17 100

17 100

17 100

D

Wages (cleaners)

3 200

3 200

3 200

3 376

Maintenance

4 000

1 650

4 000

4 000

Telephone

2 000

4 280

2 000

2 500

Insurance

1 800

1 800

1 800

1 800

Advertising

2 400

1 900

C

3 168

Depreciation

6 200

8 000

6 200

8 000

Trading stock deficit

0

680

0

500

Stationery

3 150

3 100

3 200

3 250

Sundry operating expenses

8 450

8 420

8 500

8 550

Operating profit

17 400

 

?

?

Interest income

225

200

200

200

Profit before interest expense

17 625

     

Interest expense

585

585

585

435

Net profit before income tax

?

 

?

?

Income tax

?

 

?

?

Net profit after tax

E

 

?

?

ACTIVITY 3:

Below is information relating to DIY Hardware. The business is owned by John Temba. His inexperienced bookkeeper, Mabel, has prepared a Cash Budget.

REQUIRED:
3.1 Identify TWO items that Mabel has incorrectly entered in the Cash Budget. (4)
3.2 Apart from the items mentioned above, name TWO other items in the Payments Section of the Cash Budget that would NOT appear in a Projected Income Statement. (4)
3.3 After correcting all the errors John has identified the following:

 

JAN 2013

FEB 2013

Cash deficit for the month

(14 950)

(52 400)

Cash at the beginning of the month

 

35 350

Cash at the end of the month

A

B

Identify or calculate A and B. Indicate negative figures in brackets. (3)
3.4 Identify or calculate the missing figures C and D in the extract from the Cash Budget. (7)
3.5 Complete the Debtors’ Collection Schedule for February 2013. (10)
3.6 Calculate the percentage increase in salary and wages from 1 February 2013. (2)
3.7 Calculate the interest on the fixed deposit for January 2013. (2)
3.8 John pays Speedy Deliveries to deliver hardware to his customers free of charge. He budgets for this at a rate of 8% of total monthly sales.
3.8.1 Calculate the delivery expense figure budgeted for January 2013. (2)
3.8.2 John is of the opinion that the delivery service is costing him too much.
Which TWO points should John consider before deciding on whether or not to discontinue this service? (4)
3.9 On 31 January 2013 you identified the figures below. Explain what you would say to John about each of the following items at the end of January 2013. Give ONE point of advice in each case. (9)

JANUARY 2013

   

BUDGETED

ACTUAL

 

Advertising

1 600

0

Stationery

1 000

4 400

Staff training

2 000

700

 

3.10 John will have a problem with replacing his old computers and cash registers in March 2013. The cost of these items amounts to R150 000 and he expects them to last 5 years. However, he does not have cash available to pay for this. His options are:

  • Raise a new loan at an interest rate of 14% p.a. to be repaid over 36 months. 
  • Hire (Lease) the assets from IT Connect Ltd at R5 100 per month.
  • Invite his friend James to become an equal partner in the business and provide capital of R150 000.
    John realizes that all three options have the advantage of not requiring the R150 000 outlay in March 2013.

Consider each of these options and explain ONE other advantage and ONE disadvantage of each option. Provide figures to support your answer. (6)

INFORMATION:

  1. Sales, purchase of stock and cost of sales:
    • Total sales for November 2012 to February 2013 were as follows:
      • November: R150 000
      • December: R200 000
      • January: R160 000
      • February: R140 000
    • 60% of all sales are cash sales; the rest is credit sales.
    • The mark-up is 33.3% on cost of sales at all times.
    • Stock is replaced on a monthly basis.
    • 50% of all purchases are cash, the rest is on credit.
  2. Debtors’ collection:
    Debtors are expected to pay as follows:
    • 30% of debtors pay their accounts in the month of sale (current).
    • 50% pay in the month following the sales transaction month (30 days).
    • 8% pay in the second month (60 days).
    • 2% are written off.
  3. Creditors’ payment:
    Creditors are paid in the month after purchases, so as to receive a 5% discount.
  4. EXTRACT FROM THE CASH BUDGET FOR JANUARY AND FEBRUARY 2013
     

    JAN 2013

    FEB 2013

    RECEIPTS

       

    Cash sales

    96 000

    84 000

    Collection from debtors

    70 000

    ?

    Interest on fixed deposit (7% p.a.)

    ?

    0

    Fixed deposit: Magic Bank maturing on 1 Feb. 2013

    0

    42 000

    Commission income

    ?

    ?

    Rent income

    8 500

    8 800

         

    PAYMENTS

       

    Salary and wages

    15 000

    16 800

    Stationery

    1 000

    1 000

    Telephone

    ?

    ?

    Payment to creditors

    71 250

    D

    Cash purchase of stock

    C

    52 500

    Repayment of existing loan

     

    100 000

    Furniture bought on credit

    30 000

     

    Delivery expense for delivery of hardware to customers

    ?

    11 200

    Training of staff

    2 000

    2 000

    Advertising

    1 600

    1 400

    Depreciation

    12 500

    12 500

    Sundry expenses

    3 500

    3 600

    Drawings by owner

    ?

    ?

    Vehicle expenses

    0

    500

ACTIVITY 4: (40 marks; 25 minutes)

4.1 Explain why:
4.1.1 Depreciation and bad debts will not appear in a Cash Budget. (2)
4.1.2 A cash budget is different from a Projected Income Statement. (2)

4.2 KIT KAT DISTRIBUTORS LTD
You are provided with information for the budget period November and December 2018.

REQUIRED:
4.2.1 Complete the Debtors’ Collection Schedule. (12)
4.2.2 Calculate the missing amounts in the Cash Budget denoted by (i) to (iv). (20)
4.2.3 Comment on the internal controls on collection from debtors and payment to creditors. Provide TWO points. (4)

INFORMATION:
A. Cash sales amount to 40% of total sales.
Goods are marked-up by 25% on cost.
B. Debtors are granted credit terms of 30 days. The actual collection trend revealed that:

  • 50% of debtors pay in the month of the sale to receive a 5% discount.
  • 30% is received in the month following the month of sales.
  • 18% is collected in the second month after the sale.
  • 2% of debtors is written off.

C. Stock is replaced in the month it was sold, i.e. a base stock is maintained.
D. 80% of stock is bought on credit. Creditors are paid in full in the month following the month the purchase was made.
E. Salaries and wages are expected to remain the same for the budget period. Staff members on leave in December will receive their pay in November - the total amount is R35 600.
F. A loan will be received from a director, Thabo, on 1 November 2018, at 13% interest p.a. Interest is not capitalised. A fixed monthly instalment and interest will be paid at the end of each month.
G. The company will pay an interim dividend in December. H Rent increased by 8% on 1 November 2018.
I. Incomplete Debtors’ Collection Schedule:

MONTH

CREDIT SALES

NOVEMBER

DECEMBER

September

180 000

32 400*

 

October

186 000

55 800

*

November

*

92 625

*

December

210 000

 

*

TOTAL

 

*

*

J. Information from the Projected Income Statement:

 

NOVEMBER 2018

Sales

325 000

Cost of sales

260 000

Commission income

24 800

Depreciation

12 600

Interest expense

1 625

K Incomplete Cash Budget for 2018:

RECEIPTS

NOVEMBER

DECEMBER

Cash sales

130 000

(i)

Cash from debtors

   

Commission income

24 800

26 000

Rent income

(ii)

19 710

Loan from director Thabo

150 000

0

TOTAL RECEIPTS

   

PAYMENTS

   

Cash purchases of stock

52 000

56 000

Payments to creditors

(iii)

208 000

Directors fees

20 000

20 000

Salaries and wages

180 600

(iv)

Loan instalment (including interest)

13 625

(v)

Interim dividends

0

86 500

Sundry expenses

15 875

16 510

TOTAL PAYMENTS

   

ANSWERS

ACTIVITY 1: BRAKPAN STATIONERS

1.1 Explain the importance of comparing budgeted figures with actual figures achieved for the same period.
One valid explanation

  • Deviations can be determined and remedial measures can be put in place.
  • Establish whether the budgeting was realistic.
  • To identify trends of mismanagement of cash. (2)

1.2 Calculate the missing amounts (indicated by a, b and c) in the Debtors’ Collection Schedule for the budgeted period March to May 2015 (4)

6 048 
5 320
15 750

1.3.1 Calculate budgeted total sales for March 2015. (2)

  • 10 500 x 100/20 = 52 500

1.3.2 Calculate the amount budgeted for payments to creditors during May 2015. (4)

  •        40 000
    70 000 x 100/175 x 70% = 28 000 any one part correct
    or
    12 000/30 x 70 = 28 000

1.3.3 Calculate the budgeted salaries of the shop assistants for April 2015. (3)

  • 102 000/12 = 8 500 8 500 x 3 = 25 500
    15 300 x 9 = 137 700
    25 500 + 137 700 = 163 200 any one part correct
    OR: 102 000 one mark + 61 200 one mark = 163 200
    (102 000 X 80% X 9/12)

1.3.4 Calculate the % increase in the salary of the manager expected in May 2015. (3)

  • 3 200 (1 mark)
    (19 200 - 16 000) /16 000 = 20% any one part correct

1.3.5 Calculate the amount of the additional loan expected to be acquired on 1 April 2015. (3)

  • 875 x (100 x12) /14 = 75 000 any one part correct

1.4 An official of the local municipality has offered to recommend that Brakpan Stationers supply the municipality with stationery to the value of R500 000. However, he will only do this if he is paid R20 000 in cash.
Give advice in this regard. State TWO points.
Any two suggestions (4)

  • This is actually a bribe, which is unethical.
  • If this information is made public, it will have a negative effect on the business.
  • The owner must submit a formal tender to secure a contract through the normal processes.

1.5 Identify THREE over-payments made in April. Provide figures to support your answer. Provide a valid reason for each over-payment to support the decision taken. (6)

  Over-payment with figures
 Item and figure
Valid reason 
The bonus paid to the manager in February 2015 (R24 000) was not taken into account. He has retained the services of a valuable employee.
Purchase of vehicle (R180 000). The difference between  motor vehicle expenses and delivery expenses is R5 200 per month.
3 Cash purchase of merchandise (R28 000) was significantly higher than the budgeted figure (R12 000). Possibly to take advantage of discounts on bulk purchases.

1.6 Explain how this difference of opinion with his wife can be avoided in future.

  • They should have a specific meeting to determine the budget jointly and the owner should consult his wife before spending on unbudgeted items.

State TWO other strategies that the owner and his wife could consider in future to improve the results of the business.
Any two valid points:

  • Advertise monthly. / Reduce the number of shop assistants.
  • Reinstate deliveries to customers. / Negotiate longer credit terms with suppliers.

ACTIVITY 2 : DAWN DISTRIBUTORS

2.1 Identify TWO items that Mabel has incorrectly entered in the Cash Budget.
Any TWO

  • Cost of sales / Discount received / Depreciation / Trading stock deficit

2.2

A Gross profit   120 000 - 75 000 = 45 000
B Cost of sales 132 000 x 100/160 = 82 500
Or
132 000 x 62,5% or 132 000 - (132 000 x 37,5%)
C Advertising 2 400/120 000 = 2%
132 000 x 2% = 2 640
D Salaries 17 100 x 108% = 18 468
Or
17 100 + 1 368 = 18 468
Net Profit after tax 17 040
(17 625 - 585) x 30% = 5 112
17 040 - 5 112 = 11 928

2.3.1 The percentage increase in wages that the cleaners will receive in December 2015.

  •          176
    (3 376 - 3 200) x 100 = 5,5% (one part correct)
           3 200

2.3.2 The monthly salary due to the Sales Manager in December 2015.

  • (17 100 - 300) = 8 400 (8 400 + 300) x 108% = 9 396 (one part correct)
               2

2.3.3 Total credit sales expected in December 2015.

  • (99 000 x 160% ) x 75% = 118 800 (one part correct)
    OR
    132 000 X 120% = 158 400 X 75% = 118 800

2.3.4 The balance of the loan on 1 November 2015.

  • 585 x 1200/9 = 78 000 (one part correct)

ACTIVITY 3: DIY HARDWARE

3.1 Identify TWO items that Mabel has incorrectly entered in the Cash Budget.
Two items

  • Depreciation
  • Furniture bought on credit

3.2 Apart from the items above, name TWO other items in the Payments Section of the Cash Budget that would NOT appear in a Projected Income Statement.
Any two items
Expected responses:

  • Payment to creditors / Repayment of loan / Purchase of vehicle / Drawings Cash purchases of stock

3.3 Identify or calculate A and B. Indicate negative figures in brackets.

R35 350
B (R17 050)

3.4 Identify or calculate the missing figures C and D in the extract from the Cash Budget

 

C

160 000    x 100/133⅓      = 120 000;  120 000 x 50%      = R60 000

 

D

60 000    x 95%      = 57 000    any one part correct

3.5 Complete the Debtors’ Collection Schedule for February 2013.

 

Credit sales

February collections

December

R80 000

14 400

January

R64 000

32 000

February

R56 000

16 800

TOTAL operation  63 200

3.6 Calculate the % increase in salary and wages with effect from 1 February 2013.

  • 1 800 /15 000 x 100 = 12 %

3.7 Calculate interest on the fixed deposit for January 2013.

  • 42 000 x 7% / 12 = R245

3.8.1 Calculate delivery expenses for January 2013.

  • R160 000 x 8% = R12 800

3.8.2 John is of the opinion that the delivery service is costing him too much. Which TWO points should John consider before deciding whether or not to discontinue this service?
Two factors

  • Whether his competitors are offering the service or not.
  • What the reaction from his customers will be should he withdraw the service.
  • The possibility of charging customers for the delivery service.
  • The possibility of finding a cheaper delivery service.
  • The possibility of using his own vehicle instead of sub-contracting this service.

3.9 Explain what you would say to John about each item at the end of January 2013. Give ONE point of advice in each case.

  Comment   Advice 
Advertising   As he did not spend any money on Advertising, this will probably mean that he will not  achieve budgeted sales. Make sure that he utilises the advertising budget fully each month. (It is there for a purpose.)
Stationery He spent significantly more than the budgeted figure.  Ensure that there is no wastage of stationery. / Keep unused stationery secured. / Find a cheaper supplier.
Staff training He under-spent on the budget, which means that staff might not be interacting well with customers. He must consider that staff training affects the manner in which staff interact with customers. This leads to efficiency and goodwill.

3.10 Consider each of the options below and explain ONE other advantage and ONE disadvantage related to each option.

  Other Advantage   Diadvantage 
Option 1: Raise a new loan to be repaid over 36 months. The interest rate is 14% p.a..  He will own the assets and they could last longer  than five years if he takes good care of them. He has to pay interest of R1 750 per month + R4 167 per month to repay the loan.
Option 2: Hire (lease) the assets from IT Connect Ltd at R5 100 per month. He does not have to raise a loan. / He does not have to pay interest on the loan./ He will not have to pay repair costs. The lease charges are expensive, at R5 100 per month (R306 000 over the expected life span of five years.) / He never owns the assets and so continues to pay.
Option 3: Invite his friend James to become an equal partner in the business and to provide capital of R150 000. He will have the necessary funds to purchase the assets which will then belong to, the business / They will share the workload and their skills. He will have to share half his profits with his new partner.

ACTIVITY 4 :

4.1 Explain why:
4.1.1 Depreciation and bad debts will not appear in a Cash Budget.
Any valid explanation.

  • Non-cash items are not included in a cash budget.
  • A cash budget only includes cash receipts and cash payments. 

4.1.2 A cash budget is different from a Projected Income Statement.
Any valid explanation.

  • A cash budget includes receipts and payments and shows plans for cash management. It shows the surplus/ deficit and the bank balance.
  • The PIS shows income and expenses (including non-cash items) and projects the profit or loss per month (for the budget period).

4.2 KIT KAT DISTRIBUTORS LTD
4.2.1

MONTHS

CREDIT SALES

NOVEMBER

DECEMBER

September

180 000

32 400

 

October

186 000

55 800

33 480

November

195 000

92 625

58 500

December

210 000

 

99 750

Total collection from debtors  180 825 191 730

4.2.2 Calculate:

  1. Cash sales for December:
    210 000 X 40/60 = 140 000
  2. Rent income amount for November: 
    19 710 x 100/108 = 18 250
  3. Payments to creditors for November:
    186 000 x 100/60 = 310 000 
    310 000 x 100/125 = 248 000
    248 000 x 80% 
    = 198 400
  4. Salaries and wages for December: 
    180 600 - 35 600 - 35 600 
    = 109 400
  5. Loan instalment (including interest) for December:
                                           138 000 
    (13 625 - 1 625) + (150 000 - 12 000) x 13% x 1/12
           12 000                                1 495 (three marks) 
    = 13 495 

4.2.3 Comment on the internal controls for collection from debtors and payments to creditors. Provide TWO points.
Any TWO valid points.

  • Only 50% of the debtors comply with the credit terms.
  • The cash from debtors does not cover the payments to creditors every month.
  • 80% of stock is bought on credit. / Only 20% is cash purchase of stock.
  • As cash sales is a greater percentage of total sales, it may be wise to increase the percentage of cash purchases.
  • Taking advantage of short-term credit is only beneficial if it eases cash-flow problems.
Friday, 03 December 2021 06:53

Economic Essays Grade 12

Grade 12 Economic Essays for the Next Three-Year Cycle (2021-2023)




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ESSAYS FOR THE NEXT THREE-YEAR CYCLE (2021-2023)

MACROECONOMICS- PAPER1

Discuss in detail the markets within the FOUR-SECTOR model (Circular Flow)
INTRODUCTION
The economy of a country is regarded as an open economy because of the presence of households, producers, government, foreign sector and financial
sector as active participants in the economy. Markets link the participants in the economy ?? [Max 2]

BODY: MAIN PART
PRODUCT / GOODS/ OUTPUT MARKET?

  • These are the markets for consumer goods and services??
  • Goods are defined as tangible items, like food, clothes, cars, etc. that satisfies some human wants or needs??
  • Buying and selling of goods that are produced in markets e.g. ??
  • Capital Goods market for trading of buildings and machinery??
  • Consumer goods market for trading of durable consumer goods, semi-durable consumer goods and non-durable consumer goods. ??
  • Services are defined as non-tangible actions and include wholesale and retail, transport and financial markets. ??

FACTOR / RESOURCE/ INPUT MARKETS?

  • Households sell factors of production on the markets: rent for natural resources, wages for labour interest for capital and profit for entrepreneurship??
  • The factor market includes the labour, property and financial markets. ??
  • The market where services of factors of production are traded e.g. labour is hired and capital is borrowed – these services earn wages, interest, rent and profits??

FINANCIAL MARKETS?

  • They are not directly involved in the production of good and services, but act as a link between households , the business sector and other participants with surplus finds??
  • E.g. banks, insurance companies and pension funds?

MONEY MARKETS?

  • In the money markets short term loans, and very short term funds are saved and borrowed by consumers and business enterprises ??
  • Products sold in the market are bank debentures, treasury bills and government bonds ??
  • The simplest form exists when parties make demand and short-term deposits and borrow on short term ??
  • The SARB is the key institution in the money market??

CAPITAL MARKETS?

  • In the capital markets long term funds are borrowed and saved by consumers and the business sector??
  • The Johannesburg Security Exchange (JSE) is a key institution in the capital ??
  • Products sold in this market are mortgage bonds and shares??

FOREIGN EXCHANGE MARKETS?

  • On the foreign exchange markets businesses buy/ sell foreign currency to pay for imported goods and services??
  • These transactions occur in banks and consists of electronic money transfers from one account to another??
  • The leading centres/ most important foreign exchange markets are in London, New York and Tokyo ??
  • e.g. traveller’s cheques to travel abroad?

FLOWS?

  • Flows of private and public goods and services are real flows and they are accompanied by counter flows of expenditure and taxes on the product market??
  • Factor services are real flows and they are accompanied by counter flows of income on the factor market??
  • Imports and exports are real flows and are accompanied by counter flows of expenditure and revenue on the foreign exchange market??[Max 26]

BODY: ADDITIONAL PART
2 jagyda

  • A change in investment of R 10m will result in a change in income of R 20m??
  • An increase in investment causes the expenditure function to shift upwards from C1 to C2 so that C1 is parallel to C2??
  • The effect of the increase in investment is that the total expenditure will increase from R 20m to R 30m??
  • The increase in the value of output (Y) is greater than the increase in the expenditure (E) ??
    (Explanation must comply with the figures supplied in the graphical presentation)
    [Max 4]
    [Max 10]

CONCLUSION
The circular flow ensures continued interdependence and coordination of the economic activities in the economy / markets are critically important institutions in our economic system, because they regulate the supply and demand and safeguard price stability and general business confidence. ??
[Any other relevant conclusion]
[Max 2]

Discuss in detail 'The new economic paradigm'/Explain the 'smoothing of cycles (Business Cycles)

INTRODUCTION
The new economic paradigm in terms of the smoothing of business cycles discourages monetary policy makers from using monetary and fiscal policies to fine tune the economy but rather encourages achieving stability through sound long term decisions relating to demand and supply in the economy/smoothing out the painful part of economic down-fall that is part of the market economy??
(Accept other relevant definition/description of smoothing/new economic paradigm).
[Max 2]

BODY: MAIN PART
The new economic paradigm is embedded in the demand and supply side policies. ??

Demand-side policies

  • It focuses on aggregate demand in the economy??
  • When households, firms and the government spend more, demand in the economy increases. ??
  • This makes the economy grow but lead to inflation.??

Inflation:

  • Aggregate demand increases more quickly than aggregate supply and this causes price increases. ??
  • If the supply does not react to the increase in demand, prices will increase. ??
  • This will lead to inflation (a sustained and considerable in the general price level) ??

Unemployment:

  • Demand-side policies are effective in stimulating economic growth. ??
  • Economic growth can lead to an increase in demand for labour. ??
  • As a result more people will be employed and unemployment will increase. ??
  • As unemployment decreases inflation is likely to increase. ??
  • This relationship between unemployment and inflation is illustrated in the Phillips curve. ??
  • The PC curve shows the initial situation. A is the point of intersection of the PC curve with the x- axis. It shows the natural rate of unemployment, for instance 14%??
  • At point A inflation rate is zero. ??
  • If unemployment falls to C for instance, 8%, inflation caused by wage increases is at 6%.??
  • If unemployment increases from C to B to A, inflation falls from 6% to 2% to 0%.??

Phillips curve (PC)
3 philips curve
Heading - 1
Labelling of axes - 1
Drawing of correct 2 curves - 1
Point  A  -  1
Max 4 marks

Supply-side policies
Reduction of costs ?

  • Infrastructural services: reasonable charge and efficient transport, communication, water
  • services and energy supply. ??
  • Administrative costs: these costs include inspection, reports on applications
  • of various laws, regulations and by-laws, tax returns and returns providing statistical
  • information.
  • It adds to costs and businesses carry a heavy burden ??
  • Cash incentives: it includes subsidies for businesses to locate in neglected areas where unemployment is high and compensation to exporters for certain costs they
  • incurred in development of export markets. ??

Improving the efficiency of inputs ?

  • Tax rates: low tax rates can serve as an incentive to workers. It will improve the productivity and output. ??
  • Capital consumption: replacing capital goods regularly creates opportunities for businesses to keep up with technological development and better outputs??
  • Human resource development: to improve the quality of manpower by improving health care, education and training. ??
  • Free advisory service: these promote opportunities to export. ??

Improving the efficiency of markets ?

  • Deregulation: removal of laws, regulations and by-laws and other forms of government controls makes the market free. ??
  • Competition: encourages the establishment of new businesses ??
  • Levelling the play field: private businesses cannot compete with public enterprises ??
    Answers must be in full sentences and well described with examples to be able to obtain 2 marks per fact.
    Learners should be awarded 1 mark per heading or sub-heading to a maximum of 8 marks.
    (8 x 1) (8)
    [Max 26]

BODY: ADDITIONAL PART 
4 ajgdya

Explanation:
The above graph shows:

  • Aggregate demand (AD) and aggregate supply (AS) are in equilibrium at point C. ??
  • If aggregate demand is stimulated so that it moves to AD1 and aggregate supply responds promptly and relocates at AS1; a larger real output becomes available without any price increases. ??
  • Supply is often sticky and fixed in the short term. ??
  • Therefore, if aggregate demand increases to AD1 and aggregate supply does not respond, intersection is at point F. Real production increases but so does the price, in other words, with more inflation. ??
  • The aggregate demand locates at any position to the left of AS1 inflation prevails. ??
  • The solution is to create conditions that ensure supply is more flexible. ??
  • If the cost of increasing production is completely flexible, a great real output can be supplied at any given price level. ??
    [Max 10]

CONCLUSION
It is clear from the discussion above that it is critically important to manage the aggregate supply and demand to ensure stability in the economy. ??
[Accept any relevant higher order conclusion]
[Max 2]

Discuss in detail the features underpinning forecasting (Business Cycles)

INTRODUCTION
Accurate prediction is not possible in Economics. The best the economists can do is to try and forecast what might happen. There are a number of techniques available to help economists to forecast business cycles, e.g. economic indicators ??
OR
Successive periods of contraction and expansion of economic activities ??
[Accept any other relevant introduction]
[Max 2]

BODY: MAIN PART
Business cycle indicators
Leading economic indicators ?

  • These are indicators that change before the economy changes / coincide with the reference turning point ??
  • They give consumers, business leaders and policy makers a glimpse (advance warnings) of where the economy might be heading. ??
  • Peak before a peak in aggregate economic activity is reached.
  • Most important type of indicator in helping economists to predict what the economy will be like in the future ??
  • When these indicators rise, the level of economic activities will also rise in a few months' time/an upswing ??
  • E.g. job advertising space/inventory/sales ratio?

Coincident economic indicators?

  • They move at the same time as the economy / if the turning point of a specific time series variable coincides with the reference turning point??
  • It indicates the actual state of the economy??
  • E.g. value of retail sales. ?
  • If the business cycle reaches a peak and then begins to decline, the value of retail sales will reach a peak and then begin to decline at same time??

Lagging economic indicators?

  •  They do not change direction until after the business cycle has changed its direction??
  • They serve to confirm the behaviour of co-incident indicators??
  • E.g. the value of wholesalers' sales of machinery?
  • If the business cycle reaches a peak and begins to decline, we are able to predict the value of new machinery sold??

Composite indicator?

  • It is a summary of the various indicators of the same type into a single value??
  • Their values are consolidated into a single value , if this is done we find a value of a composite leading , coincident and lagging indicator??
    Accept ONE example from the table below:
LEADING INDICATORS  CO-INCIDENT INDICATORS  LAGGING INDICATORS 
  • Net new companies registered
  • Number of new vehicles sold
  • Net gold and other foreign reserves
  • Number of residential building plans passed
  • Share prices
  • Real export of goods (gold excluded)
  • Gross operating surplus as % of GDP
  • Labour productivity in manufacturing
  • Job advertisements in newspapers
  • Commodity prices in US $ for a basket of SA export commodities
  • Opinion survey of the average hours of work per factory worker in the manufacturing sector
  • Opinion survey on stocks in relation to demand: manufacturing and trade
  • Opinion of business confidence of manufacturing, construction and trade
  • Opinion survey of volume of orders in manufacturing
  • Registered unemployed
  • Physical volume of manufacturing production
  • Real retail sales
  • Real merchandise imports
  • Utilization of capacity in manufacturing
  • Gross value added at constant prices excluding agriculture, forestry and fishing
  • Industrial production index
  • Value of wholesale, retail and new vehicle sales at constant prices
  • Total formal non-agricultural employment
  • Employment in non- agricultural sectors.
  • Hours worked in construction
  • Cement sales in tons
  • Number of commercial vehicles sold
  • Real investment in machinery and equipment
  • Unit labour cost in manufacturing
  • Wholesale sales of metals, machinery and equipment
  • Prime overdraft rate of banks
  • Value of non-residential buildings completed at constant price

 Length ?

  • This is the time that it takes for a business cycle to move through one complete cycle (measured from peak to peak) ??
  • It is useful to know the length because the length tends to remain relatively constant over time.??
  • If a business cycle has the length of 10 years it can be predicted that 10 years will pass between successive peaks or troughs in the economy. ??
  • Longer cycles show strength. ??
  • Cycles can overshoot. ??

Ways to measure lengths:

  • Crisis to crisis ??
  • Historical records ??
  • Consensus on businesses experience ??

Amplitude ?

  • It is the difference between the total output between a peak and a trough. ??
  • It measures the distance of the oscillation of a variable from the trend line / It is the intensity (height) of the upswing and downswing (contraction and expansion) in economic activity ??
  • A large amplitude during an upswing indicates strong underlying forces – which result in longer cycles ??
  •  The larger the amplitude the more extreme the changes that may occur / extent of change ??
  • E.g. During the upswing inflation may increase from 5% to 10%. (100% increase) ??

Trend ?

  •  A trend is the movement of the economy in a general direction. ??
  • It usually has a positive slope because the production capacity of the economy increases over time ??
  • Also known as the long term growth potential of the economy. ??
  • The diagram above illustrates an economy which is growing – thus an upward trend (positive slope) ??
  • Trends are useful because they indicate the general direction in which the economy is moving – it indicates the rate of increase or decrease in the level of output??

Extrapolation ?

  • Forecasters use past data e.g. trends and by assuming that this trend will continue, they make predictions about the future??
  • Means to estimate something unknown from facts or information that are known ??
  • if it becomes clear that the business cycle has passed through a trough and has entered a boom phase, forecasters might predict that the economy will grow in the months that follow ??
  • It is also used to make economic predictions in other settings e.g. prediction of future share prices??

Moving average ?

  • It is a statistical analytical tool that is used to analyse the changes that occur in a series of data over a certain period of time / repeatedly calculating a series of different average values along a time series to produce a smooth curve ??
  • The moving average could be calculated for the past three months in order to smooth out any minor fluctuations ??
  • It is calculated to iron out (minimize) small fluctuations and reveal long-term trends in the business cycle??
    Answers must be in full sentences and well described with examples to be able to obtain 2 marks per fact.
    Learners should be awarded 1 mark per 8 headings and examples. [8 x 1=8]
    [Max 26]

BODY: ADDITIONAL PART

  • An expansionary monetary policy is implemented when the economy is in recession in order to stimulate economic activities. ??
  • Interest rates can be reduced to encourage spending. ??
  • Households and firms can borrow more and spend more. ??
  •  The increased spending increases the level of economic activity. ??
  • Investment will increase and more factors of production will be employed. ??
  • Higher levels of production, income and expenditure will be achieved. ??
  • If the supply of goods and services does not increase in line with an increase in demand, inflation will increase. ??
  • Inflation can be curbed by reducing money supply and availability of credit. ??
  • To dampen demand at the peak the government will be able to reduce the money supply by increasing interest rates. ??
  • Selling government bonds and securities (open market transactions) and reduce the supply of money in circulation. ??
  • Increase the cash reserve requirements to manipulate money creation activities of banks. ??
  • Persuade banks to decrease lending (moral suasion) ??
  • To devaluate the exchange rate (exchange rate policy) ??
    [Max 10]

CONCLUSION
It remain clear that business cycles must be clearly monitored through the indicators available,
policy makers must act quickly by using monetary and fiscal instruments in order to prevent instability in the economy. ??
[Accept any other relevant conclusion]
[Max 2]

Discuss in detail the main objectives of the public sector in the economy (Public Sector)

INTRODUCTION:
The government provides goods and services that are under supplied by the market and therefore plays a major role in regulating economic activity and guiding and shaping the economy. ??
[Max 2]

BODY: MAIN PART
Objectives:

Economic growth ?

  • Refer to an increase in the production of goods and services ??
  • Measured in terms of Real GDP ??
  • For economic growth to occur, the economic growth rate must be higher than Population growth ??
  • Growth and development in a country benefit its citizens because it often leads to a higher standard of living ??

Full employment ?

  • It is when all the people who want to work, who are looking for a job must be able to get a job ??
  • High levels of employment is the most important economic objective of the government ??
  • The unemployment rate increased over the past few years ??
  • Informal sector activities must be promoted because it is an area where employment increase ??

Exchange rate stability ?

  • The economy must be manage effectively and effective Fiscal and monetary policy must be used to keep the exchange rate relatively stable ??
  • Depreciation and Appreciation of the currency create uncertainties for producers and traders and should be limited. These uncertainties must be limited ??
  • The SARB changed the Exchange rate from a Managed floating to a free floating exchange rate ??

Price stability ?

  • Stable price causes better results in terms of job creation and economic growth ??
  • The SARB inflation target is 3% - 6% and they are successful in keeping inflation within this target ??
  • Interest Rates, based on the Repo Rate are the main instruments used in the stabilisation policy ??
  • The stable budget deficit also has a stabilizing effect on the inflation rate ??

Economic equity ?

  • Redistribution of income and wealth is essential ??
  • South Africa uses a progressive income tax system – taxation on profits, taxation on wealth, capital gains tax and taxation on spending, are used to finance free services ??
  • Free social services are basic education; primary health and to finance basic economic services ??
  • E.g. Cash Grant to the poor, e.g. child grants and cash grants to vulnerable people, e.g. disability grants ?
  • Progressive taxation means that the higher income earners pay higher/more taxation ??
    [Max 26]

BODY: ADDITIONAL PART

  • Learner responses can be positive or negative.
  • Follow the argument and see if the learner can produce enough evidence to support his/her answer.

Economic Growth:

  • SA targets 4–5% economic growth. Previously SA had a 5% growth rate ??
  • In recent years the growth rate decreased steadily (presently below 3%) ??

Full Employment:

  • Compared to foreign countries unemployment is very high. (Expanded – over 30%) ??
  • Efforts by SA government to reduce these figures includes the GEAR strategy, focus on small business enterprises, Public Works Programme ??

Exchange rate stability:

  • SA now operates on a free floating exchange rate system in line with international benchmarks ??
  • Unfortunately our currency has lost its value, with a general trend of depreciation over the last few years ??

Price stability:

  • For the past few years South Africa has managed to remain within the 3–6% target ??
  • The current increase in the repo rate has put constraints on the inflation rate ??

Economic equity:

  • Economic equity has improved (BEE, affirmative action, gender equity) and led to an improvement in economic equity ??
    [Any 5 x 2]
    [Max 10]

CONCLUSION:
While some successes have been achieved by government, the fulfilling of some of the objectives are compromised by factors like lack of accountability, corruption, budgeting, nepotism and incompetence. ??
[Any relevant conclusion]
[Max 2]

Discuss in detail the reason(s) for public sector failure (link them to typical problems experienced through public sector provisioning) (Public Sector)

INTRODUCTION
The government responds to market failures by establishing and maintaining state owned enterprises to provide public goods and services ??
[Any other relevant introduction]
[Max 2]

BODY: MAIN PART

  1.  Accountability ?
    • It is required to give an explanation of one's decisions, actions and expenditures over a period of time ??
    • There are mechanisms for evaluating government's economic and financial performance ??
    • That the desired quantities and quality of goods and services for which taxes are raised are delivered ??
    • That monopolies, corruption, nepotism, incompetence and apathy does not occur ??
    • Two important elements of accountability is participation and transparency??
    • Ministerial responsibilities, i.e. the ministers of government departments are responsible for decisions and actions and expenditures ??
    • Parliamentary questioning arises and members of the government departments have to respond ??
    • The national treasury is responsible for treasury control ??
    • The auditor-general reports annually in writing on each government department??
  2. Efficiency ?
    • Public goods are efficiently provided if Pareto efficiency is achieved ??
    • That is if resources are allocated in such a way that no one can be made better off without making someone else worse off ??
    • Bureaucracy the official rules and procedures. ??/insensitivity to the needs of their clients ??
    • Incompetence- the lack of skill or ability to do a task successfully??/May have improper qualifications/or an attitude of apathy ??
    • Corruption- the exploitation of a person's position for private gain /taking bribes, committing fraud, nepotism ??
  3. The problem of assessing needs ?
    • State-owned enterprises do not operate according to the forces of supply and demand ??
    • It becomes thus very difficult for state-owned enterprises to assess needs and they are thus prone to under- or over-supplying public goods and services ??
    • The census and other household surveys as well as local government structures provide this type of information ??
    • Since resources are scarce, government must then decide which needs and whose needs are to be satisfied ??
    • In the private sector houses are built according to the price that people are able and willing to pay ??
    • In the public sector housing is regarded as a social responsibility and authorities supply them according to the needs of people ??
  4. Pricing policy ?
    • In a market economy prices are determined by supply and demand ??
    • The objectives of firms are to maximise their profits and they usually set prices to achieve this objective ??
    • Government does not pursue the profit maximisation objective ??
    • Government takes into account certain social, economic, political and environmental conditions as well as public opinion ??
    • Free-of-charge services- this is met from taxes ?? and applies to most community goods and collective goods ?? (e.g.) defence, police whereby charges and toll fees are levied ?
    • User-charges ? option to charge depends on technical reasons ?? (e.g.) cost of providing a double lane road could be recovered by toll charges ? Economic reasons ? such as services like water and electricity ? that have a zero price ? political reasons ? where income distribution is significantly unequal, administrative rationing according to need takes place ?? (e.g.) public health and education ?
    • Direct and indirect subsidies direct subsidies are used to cover part of the costs ?? (e.g.) urban bus service ? and an indirect subsidy is used to write off accumulated losses or deficits ??
    • Standing charges -called availability charges ?? (e.g.) water and electricity ? standing charges goes to meet fixed costs and the price per unit consumed covers variable costs ??
    • Price discrimination - different users have different elastic ties of demand for a good ?? (e.g.) commercial and manufacturing businesses pay higher rates than households and they pay on a sliding scale??
  5. Parastatals ?
    • State-owned enterprises that either render a service or when an existing enterprise is nationalised ??
    • They focus on making a profit and maximizing cost at the expense of the needs of some groups ?? (e.g.) Iscor ? SABC, ?SAA, Spoornet ?
  6. Privatisation ?
    • refers to the process whereby state-owned enterprises and state-owned assets are handed over or sold to private individuals ??
    • cost of maintaining and managing state-owned enterprises are high which can lead to higher taxes and larger public debt ??
    • State-owned enterprises are not run as efficiently as private enterprises ??
    • Nationalisation is the process whereby the state takes control and ownership of privately owned assets and private enterprises ??
    • It includes contracting of services, public-private partnerships, increasing competitiveness??
      [Max 26]

ADDITIONAL PART
Possible problems in your community or elsewhere

  • Lack of drinking water due to burst pipes ??
  • Lack of electricity due to lack of infrastructure (load shedding) ??
  • Lack of schooling – no buildings available – lack of maintenance ??
  • Lack of health services due to lack of staff, infrastructure, strikes ??
  • Lack of adequate housing (RDP) ??
    [Max 10 marks - List of examples max 5 marks]
    [Accept any other relevant answer] 

CONCLUSION
If the above problems are not dealt with timeously by government, government will continue to fail its people in terms of service delivery, seeing many protests occurring regularly ??
[Any other relevant higher order conclusion]
[Max 2]

Discuss in detail the reasons for international trade (Foreign Exchange Markets)

INTRODUCTION
International trade can be defined as the exchange of goods and services between countries globally. ?? These trade agreements are negotiated by protocols and agreement due to the uneven distribution of natural resources globally. ??

BODY-MAIN PART
The main reasons for international trade.

Demand reasons
The size of the population impacts demand.

  • If there is an increase in population growth, it causes an increase in demand, as more people’s needs must be satisfied. ??
  • Local suppliers may not be able to satisfy this demand. ??

The population’s income levels effect demand.

  • Changes in income cause a change in the demand for goods and services. ??
    • An increase in the per capita income of people in more disposable income that can be spent on local goods and services, some of which may then have to be imported. ??

An increase in the wealth of the population leads to greater demand for goods.

  • People have access to loans and can spend more on luxury goods, many of which are produced in other countries. ??

Preferences and tastes can play a part in the determining of prices,

  •  E.g. customers in Australia have a preference for a specific product which they do not produce and need to import and it will have a higher value than in other countries. ??

The difference in consumption patterns is determined

  • By the level of economic development in the country, e.g. a poorly developed country will have a high demand for basic goods and services but a lower demand for luxury goods. ??

Supply reasons
Natural resources are not evenly distributed

  • Across all countries of the world. ??
  • They vary from country to country and can only be exploited in places where these resources exist. ??

Climatic conditions

  • Make it possible for some countries to produce certain goods at a lower price than other countries, e.g. Brazil is the biggest producer of coffee. ??

Labour resources

  • Differ in quantity, quality and cost between countries. ??
  • Some countries have highly skilled, well-paid workers with high productivity levels, e.g. Switzerland. ??

Technological resources

  •  Are available in some countries that enable them to produce certain goods and services at a low unit cost, e.g. Japan. ??

Specialisation in the production

  • Certain goods and services allows some countries to produce them at a lower cost than others, e.g. Japan produces electronic goods and sells these at a lower price. ??

Capital allows developed countries

  • Enjoy an advantage over underdeveloped countries. ??
  • Due to a lack of capital, some countries cannot produce all the goods they require themselves. ??

ADDITIONAL PART

  • Buying and selling goods and services from other countries: ??
  • The purchase of goods and services from abroad that leads to an outflow of currency from SA- Imports (M). ??
  • The of goods and services to buyers from other countries leading to an inflow of currency to SA – Exports (X) ??
  • Different factor endowments mean some countries can produce goods and services more efficiently than others- specialisation is therefore possible: ??

Absolute Advantage:

  • Where one country can produce goods with fewer resources than other. ??

Comparative Advantage:

  • Where one country can produce goods at a lower opportunity cost it sacrifices less resources in production. ??

CONCLUSION
International trade is important of countries to survive economically, as barriers to trade would disadvantage all countries, due to their interdependency globally. ??
[Any other relevant higher order conclusion]
[Max 2]

ECONOMIC PURSUITS-PAPER 1

Discuss in detail export promotion (Protectionism and Free Trade)

INTRODUCTION
Export promotion refers to measures taken by governments increase production of goods and services that can be exported. The government provides incentives to encourage production ??
[Max 2]

BODY: MAIN PART REASONS:

  • Export promotion measures lower cost of production which makes it easier to compete on the international market ??
  • Achieve significant export-led economic growth??
  • Export enlarges production capacity of country because more and larger manufacturing industries are established. ??
  • The first step to export-led economic growth is to implement policies that encourage the establishment of industries to produce goods and services for export markets??

METHODS:
Exports are promoted through:
Incentives?

  • Export incentives include information on export markets, research with regard to new markets, concessions on transport charges, export credit and export credit guarantees and publicity commending successful exporters??
  • This will encourage manufacturers to export an increased volume of their production??
  • Trade missions help to market SA products abroad??and supply SA companies with information about potential markets ??

Direct Subsidies?

  • Described as direct because it involves government expenditure. ??
  • Include cash payments to exporters, refunds on import tariffs and employment subsidies.
  • The aim is to increase the competitiveness of exporting company?? reduce cost of production??and explore and establish overseas markets??

Indirect subsidies

  • Regarded as indirect because it results in the government receiving less revenue?? e.g. general tax rebates,
  • Tax concessions on profits earned from exports or on capital invested to produce export goods, refunding
  •  Of certain taxes e.g. custom duties on imported goods used in the manufacturing process??
  • Allows companies to lower their prices and enables them to compete in international markets??
  • Challenge for governments to design incentives and subsidies in such a way that prices of export goods can't be viewed as dumping prices??

Trade neutrality ?

  • Can be achieved if incentives in favour of export production are introduced
  • Up to point that neutralises the impact of protectionist measures in place??
  • E.g. subsidies equal to magnitude of import duties can be paid?

Export processing zones (EPZs) ?

  • Is free-trade enclave within a protected area –
  • Is fenced and controlled industrial park that falls outside
  • Domestic customs area, and usually located near harbour or airport ??
    NOTE: For the response with regard to the effectiveness of export promotion methods, a maximum of 5 marks can be allocated.

ADVANTAGES

  • No limitations on size and scale since world market is very large??
  • Cost and efficiency of production based on this and organised along lines of comparative advantage??
  • Increased domestic production will expand exports to permit more imports and may result in backward linkage effects that stimulate domestic production in related industries??
  • Exchange rates are realistic and there is no need for exchange control and quantitative restrictions??
  • Value can be added to natural resources of the country ??
  • Creates employment opportunities ??
  • Increase in exports has positive effect on balance of payments ??
  • Increase in production leads to lower domestic prices, which benefit local consumers??

DISADVANTAGES

  • Real cost of production ? subsidies and incentives reduce total cost of production which must be met from sales?? real cost is thus concealed by subsidies??products cannot compete in open market ??
  • Lack of competition ? businesses charge prices that are so low that they force competitors out of the market ??
  • Increased tariffs and quotas ?can be against spirit of provisions of WTO??overseas competitors retaliate with tariffs and quotas?? goods are sold domestically below their real cost of production (export subsidies and dumping) ??
  • Protection of labour-intensive industries ? developed countries maintain high levels of effective protection for their industries that produce labour-intensive goods in which developing countries already have or can achieve comparative advantage ??
  • Withdrawal of incentives often leads to closure of effected companies. ??
  • Incentives often lead to inefficiencies in the production process, since companies don't have to do their best to compete??
  • Can be seen as dumping ?? [Max 26]

BODY: ADDITIONAL PART
How successful is South Africa in protecting the local textile industry against foreign competition?

  • Not successful: ?
    Many domestic textile manufacturers closed down due to unfair international competition ??
    Many wholesalers make use of suppliers from abroad ?? e.g. Woolworths/Walmart?
  • Dumping still occurs – European manufacturers still dump clothing in Africa out of season at prices below cost ??
    Job losses due to a lack of protection in this industry ??
    [Accept any motivation relating to success indicators]
    [Max 10]

CONCLUSION
South Africa's international trade policy facilitates globalisation thereby impacting positively on the balance of payment. ??
[Accept any other relevant conclusion]
[Max 2]

Discuss in detail the arguments in favour of protectionism (Protectionism and Free Trade)

INTRODUCTION
Protectionism refers to a deliberate policy on the part of the government to erect trade barriers, such as tariffs and quotas, in order to protect domestic industries against international competition. ??
[Accept any other relevant definition]
[Max 2]

BODY-MAIN PART
Raising revenue for the government

  • Import tariffs raise revenue for the government. ??
  • In smaller countries the tax base is often small due to low incomes of individuals and businesses. ??
  • Low incomes do not provide much in the form of income taxes and therefore custom duties on imports is a significant source of income or revenue. ??

Protecting the whole industrial base

  • Maintaining domestic employment. ??
  • Countries with high unemployment are continuously pressured to stimulate employment creation and therefore resort to protectionism in order to stimulate industrialisation. ??
  • It is thought that using protectionism the country’s citizens would purchase more domestic products and raise domestic employment. ??
  • These measures on domestic employment creation at the expense of other countries, led to such measures as “beggar-my-neighbour” policies. ??
  • Applying import policies is likely to reduce other countries ability to buy country’s exports and may provoke retaliation. ??

Protecting workers

  • It is argued that imports from other countries with relatively low wages represent unfair competition and threaten the standard of living of the more highly paid workers of the local industries. ??
  • Local industries would therefore be unable to compete because of higher wages pushing up the price levels of goods. ??
  • Protection is thus necessary to prevent local wage levels from falling or even to prevent local businesses from closing down due to becoming unprofitable. ??
  • Competition from low-wage countries may also reflect the fact that those countries have a comparative advantage in low-skilled labour-intensive industries. ??

Diversifying the industrial base

  • Overtime countries need to develop diversified industries to prevent overspecialisation. ??
  • A country relying too heavily on the export of one or a few products is very vulnerable. ??
  • If a developing country’s employment and income is dependent on only one or two industries, there is the risk that world fluctuations in prices and demand and supply-side problems could results in significant fluctuations in domestic economic activity. ??
  • Import restrictions may be imposed on a range of products in order to ensure that a number of domestic industries develop. ??

Develop strategic industries

  • Some industries such as the iron-ore and steel, agriculture, (basic foodstuffs, such as maize), energy (fuels) and electronics (communication) among others, are regarded as strategic industries. ??
  • Developing countries may feel that they need to develop these industries in order to become self-sufficient . ??

Protecting specific industries
Dumping

  • Foreign industries may engage in dumping because government subsidies permit them to sell at very low prices or because they are seeking to raise profits through price discrimination. ??
  • The reason for selling products at lower prices may be to dispose of accumulate stocks Of the goods and as a result consumers in the importing country stand to benefit however,
  • Their long term objective may be to drive out domestic producers and gain control of the market and consumers
  • Are likely to lose out in the reduction in choice and higher prices that the exporters will be able to charge. ??

Infant industries

  • Usually newly established and find it difficult to survive due to their average costs being higher than that of their well-established foreign competitors. ??
  • However, if they are given protection in their early years they may be able to grow and Thereby take advantage lower their average costs and become competitive and at this point protection can be removed. ??

Declining industries/sunset industries

  • Structural changes in the demand and supply of a good may severely hit an industry such industries should be permitted to go out of business gradually declining industries
  • Are likely to be industries that no longer have a comparative advantage and however, if they go out of business quickly there may be a sudden and large increase in unemployment. ??
  • Protection may enable an industry to decline gradually thereby allowing time for resources including labour to move to other industries. ??
  • Protecting domestic standards domestic regulations of food safety human rights and environmental standards have been increasingly acting as trade restrictions. ??
    [Accept any other relevant fact]
    [Max 26]

ADDITIONAL PART
South Africa promotes exports through subsidies

Direct Subsidies

  • Strict screening measures should be put in place when companies apply for financial assistance. Government expenditure can provide direct financial support to domestic producers for their exports e.g. ??
  • Cash grants offered to South African exhibitors to exhibit their products at exhibitions overseas. To explore new markets. ??
  • Foreign trade missions to explore new markets imposition of tariffs on imports. ??
  • Funds for the formation of formal export councils. ??
  • Subsidies for training or employing personnel. ??
  • Funds for the export market research. ??
  • Product registration and foreign patent registrations. ??

Indirect subsidies

  • Government can refund companies certain taxes to promote exports.
  • These types of indirect subsidies are:
  • General tax rebates (Part of the cost of production can be subtracted from the tax that has been paid) ??
  • Tax concessions on profits earned from exports or on capital invested to produce export goods. ??
  • Refunds on import tariffs in the manufacturing process of exported goods companies often use custom duties are paid on these goods and the government refunds them. ??
    [Max 10]

CONCLUSION
Most countries agree that protectionism is harmful to the economy if not well managed. Protectionism is needed especially where industries are young and need expansion or development. ??
[Any other relevant higher order conclusion]
[Max 2]

Discuss in detail the demand-side approach in promoting growth and development in South Africa (Growth and development)

INTRODUCTION
Economic growth is responsible for the overall growth of the economy, in order to enhance the well being of the economy as a whole. Whereas economic development would focus on the individual well being of the citizens of a country.
[Any other relevant higher order conclusion]
[Max 2]

BODY-MAIN PART
Growth and Development
A demand-side approach includes discretionary changes in monetary and fiscal policies with the aim of changing the level of aggregate demand. ??

Monetary policy

  • Is driven by the South African Reserve Bank (SARB). ??
  • It aims to stabilise prices by managing inflation. ??

Fiscal policy

  • Is driven by the Department of Finance. ??
  • It aims to facilitate government, political and economic objectives. ??
  • A demand-side approach to economic growth and development does not only depend on fiscal and monetary policy. ??
  • It is dependent on all components of aggregate demand, that is, C, I, X and G. ??

South African approach

  • The South African approach uses both monetary and fiscal measures to influence aggregate demand in the economy. ??

Monetary policy

  • The South African Reserve Bank (SARB) as the central bank in South Africa formulates the monetary policy. ??
  • They use the following instruments:

Interest rate changes

  • It is used to influence credit creation by making credit more expensive or cheaper. ??
  • The exchange rate is stabilised by encouraging inflow or outflows. ??

Open market transactions

  • To restrict credit the SARB sells securities. When banks buy these securities money flows from banks to the SARB. ??
  • The banks have less money to lend and cannot extend as much credit as before. ??
  • To encourage credit creation the SARB buys securities. Money flows into the banking system.??

Moral suasion

  • The SARB consults with banks to act in a responsible manner based on the prevailing economic conditions. ??

Cash Reserve Requirements

  • Banks are required to hold a certain minimum cash reserve in the central bank. ??
  • Banks have a limited amount to give out as credit. ??

Fiscal policy

  • South Africa’s fiscal policy is put into practice through the budgetary process. ??
  • The main purpose of fiscal policy is to stimulate macroeconomic growth and employment, and ensure redistribution of wealth. ??
  • The following instruments are used:

Progressive personal income tax

  • Higher income earners are taxed at higher tax rates. ??
  • These taxes are used to finance social development. ??
  • The poor benefit more than those with higher incomes. ??

Wealth taxes

  • Properties are levied (taxed) according to their market values. ??
  • Transfer duties are paid when properties are bought. ??
  • Securities (shares and bonds) are taxed when traded. ??
  • Capital gains tax is levied on gains on the sale of capital goods (e.g. properties, shares). ??
  • Estate duties are paid on the estates of the deceased. ??
  • These taxes are used to finance development expenditures which benefit the poor more  often. ??

Cash benefits

  • Old age pensions, disability grants, child support and unemployment insurance are cash grants. These are also known as social security payments. ??
  • Benefits in kind (natura benefits) ??
  • These include the provision of healthcare, education, school meals, protection etc. ??
  • When user fees are charged, poor or low income earners pay less or nothing. ??
  • Limited quantities of free electricity and water are provided. ??

Other redistribution

  • Public works programmes, e.g. the Strategic Integrated Projects (SIP) provides employment subsidies and other cash and financial benefits such as training, financing and export incentives.??

Land restitution and land redistribution

  • Land restitution is the return of land to those that have lost it due to discriminatory laws in the  past. ??
  • Land redistribution focuses on land for residential (town) and production (farm) for previously disadvantaged groups. ??
  • The money for these programmes is provided in the main budget. ??

Subsidies on properties

  • It helps people to acquire ownership of fixed residential properties. ??
  • E.g. government’s housing subsidy scheme provides funding to all people earning less than  R3 500 per month??

CONCLUSION
The demand-side approach focuses on the expansion of the demand for goods and services produced in the economy. ??
OR
To ensure economic growth, there should be an adequate and growing demand for goods and services produced in the economy. ??

[Any other relevant higher order conclusion]
[Max 2]

Discuss in detail the following South African growth and development policies and strategic initiatives (Growth and development)

INTRODUCTION
Different growth and development strategies have been implemented in South Africa since 1994, each aimed at addressing particular needs at the time of introduction. ??
[Any other relevant introduction]
[Max 2]

BODY-MAIN PART
The Reconstruction and Development Programme (RDP)

  • The RDP was an integrated, coherent socio-economic policy framework that was implemented directly after our first democratic elections in 1994. ??
  • It seeked to mobilise all our people and our country’s resources toward the final eradication of apartheid and the building of a democratic, non-racial and non-sexist future. ??

The RDP was based on six principles.

  1. an integrated and sustainable programme. ??
  2. a people-driven process focusing on the needs of the population. ??
  3. peace and security for all, aimed at a non-violent society that respects all human rights. ??
  4. nation-building, focusing on the needs of all members of society. ??
  5. linking reconstruction and development. ??
  6. democratisation of South Africa in all aspects, including decision-making processes on all levels. ??
    • The RDP consisted of many proposals, strategies and policy programmes.
    • All of these could, however be grouped into five major policy programmes that were linked to each other.

The five key programmes were:

  1. meeting basic needs. ??
  2. developing our human resources. ??
  3. building the economy. ??
  4. democratising the state and society. ??
  5. implementing the RDP. ??

The Growth, Employment and Redistribution Programme (GEAR)

  • The GEAR built upon the strategic vision set out in the RDP, i.e. ??
  • The importance of all the objectives of the RDP was reaffirmed but it recognized the implementation and macroeconomic problems that the government had been experiencing in implementing the RDP. ??
  • The RDP placed much more emphasis on disciplined economic policy. ??
  • While still recognizing that there were very serious needs that had to be addressed. ??

The Accelerated and Shared Growth Initiative for South Africa Programme (AsgiSA).

  • AsgiSA resulted from government’s commitment to halve unemployment and poverty by 2014. ??
  • The Joint Initiative on Priority Skills Acquisition (Jipsa) was established to address the scarce and critical skills needed to meet AsgiSA’s objectives. ??

AsgiSA identified six important factors that prevented growth:

  1. the relative volatility of the currency. ??
  2. the cost, efficiency and capacity of the national logistics system. ??
  3. shortages of suitably skilled labour, and the spatial distortions of apartheid affecting low-skilled labour costs. ??
  4. barriers to entry, limits to competition and limited new investment opportunities. ??
  5. the regulatory environment and the burden on small and medium enterprises (SME’s). ??
  6. deficiencies in state organisation, capacity and leadership. ??
    • AsgiSA was not intended to be a government programme. ??
    • But rather a national initiative supported by all the key groups in the economy. ??
    • Namely business, labour, entrepreneurs and government and semi-government departments and institutions. ??

Joint Initiative on Priority Skills Acquisitions (JIPSA)

  • It is the skills development arm of ASGISA. Focus is on skills development, especially through the SETAS. ??

Expanded Public Works Programme (EPWP)

  • It is a nationwide government intervention to create employment using labour-intensive methods, and to give people skills they can use to find jobs when their work in the EPWP is done. ??

The New Growth Path (NGP)

  • The New Growth Path (NGP) was released in November 2011. ??
  • This plan is designed to serve as a framework for economic policy, and to be the driver of the country’s job strategy. ??

The New Growth Path therefore proposes certain strategies to ensure adequate demand:

  • Deepening the domestic and regional market by growing employment. ??
  • Increasing incomes and undertaking other measures to equity and income distribution. ??
  • Widening the market for South African goods and services through a stronger focus on exports to the region and other rapidly growing economies. ??
  • On a macroeconomic level the NGP entails accommodating or looser monetary policy combined with stricter fiscal policy to limit inflationary pressures and enhance competitiveness. ??
  • Government spending will be prioritised with the objective of long-term sustainable employment opportunities. ??

The microeconomic measures to control inflationary pressures include the following:

  • A competition policy to supervise monopoly pricing on products and services. ??
  • A review of administered prices to ensure that they do not increase above inflation without compelling reasons. ??
  • Interventions in the case of rapidly rising prices of essential products and services such as private??
  • Healthcare and basic food items. ??
  • The microeconomic package involves ten programmes to control inflationary pressures and inefficiencies combined with more proactive strategies to support an inclusive economy:
    1. Active industrial policy. ??
    2. Rural development policy. ??
    3. Competition policy. ??
    4. Stepping up education and skills development. ??
    5. Enterprise development: promoting small business and entrepreneurship; eliminating unnecessary red tape. ??
    6. Broad-based Black Economic Empowerment (BBBEE). ??
    7. Labour practices. ??
    8. Technology policy. ??
    9. Developmental trade policies. ??
    10. Policies for African development. ?? 

CONCLUSION

  • The different growth and development strategies that have been implemented in South Africa since 1994. ??
  • Have all contributed to making our country more prosperous and to address problems created by inequalities of the past. ??
  • However, problems such as a low level of education, unemployment and unequal distribution of income persist. ??
  • The current NGP is a comprehensive policy that is focused on addressing all of these problems.
    [Any other relevant higher order conclusion]
    [Max 2]

Discuss in detail South Africa's initiaties (endeavours) in regional development (Industrial Development Policies)

INTRODUCTION
South Africa’s overall objective of Industrial Development Policy is to ensure international competitiveness in its nine provinces.
OR
Regional development is aimed at increasing the economic livelihood of specific areas or regions.
OR
Regional development attempts to limit the negative effects of economic activities in only a few areas.
OR
It attempts to promote the advantages of a more even regional development by using labour and other natural resources and infrastructure in neglected areas.
[Accept any relevant introduction]
[Max 2]

BODY-MAIN PART
SPATIAL DEVELOPMENT INITIATIVES

  • SDI Programme attracts infrastructure and business investments to underdeveloped areas to create employment. ??
  • Department of Trade and Industry is driving force behind industrial and spatial development. ??
  • DTI plans together with central, provincial and local government, IDC, parastatals and research institutions. ??
  • Industrial Development Policy Programme (Spatial Development) has 2 focus points spatial development initiative (SDI) and financial incentives. ??
  • SDI refers to government’s initiative and economic development potential of certain specific spatial locations in SA. ??

Key Objectives:

  • Stimulate economic activity in selected strategic locations. ??
  • Generate economic growth and foster sustainable industrial development. ??
  • Develop projects of infrastructure in certain areas and finance them through lending and private sector investment. ??
  • Establish private-public partnerships (PPP’s). ??

In areas with high poverty and unemployment, SDI focuses on:

  • High level support in areas where socio-economic conditions require concentrated government assistance. ??
  • Where inherent economic potential exists. ??
  • The approach is towards international competitiveness, regional cooperation and a more diversified ownership base. ??

Some of the main focus points of the SDI Programme are:

  • Lubombo Corridor (agro-tourism, education, craft, commercial and agricultural sectors); ??
  • KwaZulu-Natal (Ports of Durban and Richards Bay); ??
  • West Coast SDI (fishing and industrial ports); ??
  • Coast-2-Coast Corridor with agro-tourism. ??
  • It also makes it possible for private sector businesses to take advantage of the economic potential of underdeveloped areas in private-public partnerships (PPP’s) ??
  • In PPP a private business may provide the capital to build the factory and to buy raw materials and employ labour, while the government provides the capital for the infrastructure such as roads and water and electricity. ??
  • The business benefits from profits and the government benefits from taxes, levies and employment opportunities. ??

There are TWO types of PPP’s which are compensated differently:
Unitary payments:

  • Private sector builds and runs a project (it performs the function on behalf of the public sector); the payment provides an acceptable return on the total investment (building cost, maintenance, operational expenses). ??

User-fees:

  • Private sector constructs the project and then is given the right to change a toll fee (e.g. public road); ??
  • The toll covers costs of construction, maintenance, operation. ??
  • The above options can be combined: E.g. hospital (cost of building is an annual payment and a user fee is also charged). ??

Corridors

  • A track of land that forms a passageway allowing access from one area to another and particular advantages to mining, manufacturing and other businesses. ??

Two Types:

  • Domestic Corridor: e.g. Lubombo, West Coast, Fish River. ??
  • Corridors beyond the South African Borders (SADC) e.g. Maputo Development Corridor Mozambique. ??
  • Reasons in support of South Africa’s regional integration in Southern Africa: have political and stable neighbours have important export markets and a future source of water and energy supplies integration may be a precondition for support from foreign investors, donors and multilateral institutions. ??
  • A robust regional transport system and a solid infrastructure base hold the key to attracting investment into the SADC region – improving competitiveness and promoting trade. ??

Advantages from Corridor development:

  • Greater levels of economic efficiency and productivity compact urban form corridor urban form. ??
  • Corridor developments will often occur due to private investment. ??
  • Intergration of land use and transport planning will lead to generally efficient integration. ??
  • Efficient urbanisation leads to efficient use of land and promotion of an efficient transport system. ??

INDUSTRIAL DEVELOPMENT ZONES (IDZ’s)

  • Geographically designed, purpose-built industrial sites providing services tailored for export- orientated industries. ??
  • Physically enclosed and linked to an international port or airport. ??
  • Specifically designed to attract new investment in export-driven industries. ??
  • Falls outside domestic customs zones and able to import items free of customs and trade restrictions, add value and then export their goods. ??
  • Development and management done by private sector. ??
  • Government IDZ policy designed to boost exports and jobs. ??
  • IDZ’s aim to encourage economic growth –attract foreign investment in industrial development – facilitate international competitiveness regarding manufacturing. ??
    [Max 26]

ADDITIONAL PART FINANCIAL INCENTIVES
Small and Medium Enterprise Development Programme (SMEDP)
• This incentive has provided a tax-free cash grant for investment in industries in

  • South Africa. ??
  • E.g. manufacturing, agricultural, processing, aquaculture and tourism. ??

Critical Infrastructure Fund Programme (CIF)

  • A tax-free cash grant incentive for projects has improved critical infrastructure in  South Africa. ??
  • E.g. for installation, construction of infrastructure, payment of employees, materials directly consumed during installation. ??

Duty Free Incentives (for businesses operating in the IDZ’s)

  • This has encouraged export-orientated manufacturing to increase their competitiveness ??
  • And helped to promote foreign and local direct investment. ??

Foreign Investment Grant (FIG)

  • This has assisted foreign investors to invest in new manufacturing businesses in SA. ??
  • Benefited in terms of the cost of relocating new machinery and equipment from abroad. ??

Strategic Investment Projects (SIP)

  • This has attracted investment from local and foreign entrepreneurs in manufacturing, computer, research and engineering sectors. ??

Skills Support Programme (SIP)

  • This cash grant for skills development has encouraged greater investment ??
  • In training in general and stimulated the development of new advanced skills. ??

Black Businesses Supplier Development Programme (BBSDP)

  • This 80 % cash grant has provided black-owned enterprises with access to ??
  • Training which has improved management of their enterprises. ??

Special Economic Zones (SEZ)

  • It is an extention to the current financial incetives to further promoted regional development. ??
  • The major incentive is a tax reduction of 15 % for businesses settling in this area. ??
  • This does not mean that existing businesses in the IDZ can relocate to take advantage of this incentive. ??
  • If a current business in the IDZ wants to expand they are allowed. ??
    [Max 10]

CONCLUSION
From the above discussion it is clear that different initiatives form part of South Africa’s Regional Industrial Development Programme.
[Max 2]

Discuss in detail the following economic indicators (Economic and Social Performance Indicators

INTRODUCTION
Economic indicators are used to evaluate the economic performance of an economic unit. This unit can be a company, an industry, a country or a region.
Macro-economic indicators, measures the economic performance of a country as a whole. ??

BODY-MAIN PART
Such indicators can provide an indication of:

  • Changes taking place in a country. ??
  • How a country compares to other countries. ??

Inflation Rate

  • This is the general increase in the price level of goods and services in the economy over a certain period in time. E.g. one year. ??
  • This is therefore an indicator of the health of the economy and it is monitored in two ways that is at the production wholesale level producer price level (PPI) and at the retail or consumer level consumer price index (CPI) ??

The Consumer Price Index (CPI)

  • Shows the price increases of a representative (weighted) basket of goods and services that consumers buy. ??
  • It is abbreviated as CPI this cover all the urban areas. ??
  • It is an overall index and weights are obtained from expenditures of different income categories of households. ??
  • It is the most comprehensive indicator measuring consumer inflation in the country. ??
  • It shows changes in the general purchasing power of the rand and it is used for inflation targeting ??
  • Is compiled by Stats SA and measures the change in the price level of a basket of consumer goods and services. ??
  • The goods and services included in the basket are chosen to represent the goods and services purchased by an average household. ??
  • This basket is adjusted from time to time as consumption patterns change. ??
  • The inflation rate is the percentage change in the CPI from the previous year and can be calculated as follows:
  • Change in CPI x 100 ??
           CPI

The Production Price Index (PPI)

  • Used to measure the price of goods that are produced domestically when they leave the factory year. ??
  • The goods that are imported when they enter the country (at a port) and both of these are before consumers become involved. ??
  • PPI consists of three baskets that are domestically manufactured outputs, e.g. changes in the PPI can be made monthly or quarterly or yearly. ??
  • While changes in the imported products and exported commodities are given separately in the same report. ??
  • PPI includes capital and intermediate goods but not services. ??
  • It is based on a completely different type of a basket of items in the CPI. ??
  • It measures the cost of production rather than the cost of living. ??
  • It is used to predict consumer goods inflation (CPI) ??
  • Which is also estimated and published on a monthly basis by Stats SA, is similar to the CPI, ??
  • Except that it also includes the prices of raw materials and intermediary goods ?? (i.e. goods that will be finished in the production process), excludes VAT and excludes  services. ??
  • Manufactured goods included in the PPI are priced when they leave the factory, not when they are sold to consumers. ??
  • Unlike the CPI, the PPI therefore cannot be related directly to consumers’ living standards. ??
  • The PPI is nevertheless very useful in the analysis of inflation because it measures the cost of production. ??
  • A significant change in the rate of increase in the PPI is usually an indication that the rate of increase in the CPI will also change a few months later. ??

The GDP Deflator
Is a ratio that indicates the relationship of the GDP at nominal prices to the GDP at real prices.
GDP deflator = Normal GDP x 100 ?? 
                          Real GDP 

Nominal GDP

  • Is the value of total gross domestic product measured at current prices. ??
  • While the real GDP is the value of total gross domestic product measured at constant prices.??
  • So, the GDP deflator includes changes in the prices of exports but not of imports. ??
  • In a small open economy, like that of South Africa where both, imports and exports are significant in relation to the total size of the economy. ??
  • The exclusion of import prices is an important shortcoming. ??

Unemployment rate

  • In terms of economic development, employment is a very important indicator. ??
  • Employment is, however, not very easy to measure as so many people are employed in the informal sector which is not recorded. ??
  • The concept of underemployment is also important. ??
  • This is when someone is employed in a position that requires less skill than their ability. ??
  • For example when a qualified accountant works as a delivery person because he or she cannot find employment as an accountant. ??
  • Someone may also be employed on a part-time basis but would prefer to work full time. ??
  • A labour force survey is published quarterly by Stats SA. ??
  • This publication contains information and statistics concerning a variety of issues related to the labour market, including the official unemployment rate. ??
  • It is a comprehensive survey and provides information on changes in employment in different provinces and industries. ??
  • Employment in the informal sector, and even reasons for changes in employment figures. ??
  • The unemployment rate is a percentage of the total labour force. ??
  • The total labour force includes all employed people and unemployed people who are looking for work. ??
  • The unemployment rate is a lagging indicator, which means that it will only change a few periods after the trend in the economy has changed. ??
  • For example if the economy starts growing at a faster pace. ??
  • The unemployment rate will only react to the growth after two or three quarters. ??

Interest rates

  • Interest rates are important indicators of future economic activity, as the interest rate level is usually an important determinant when economic decisions are being taken. ??
  • Both the general interest rate level and the structure of interest rates are important indicators.??
  • There are many interest rates in the economy. ??
  • Some are short term rates, such as the repo rate, which is the interest rates at which South Africa banks borrow from the Reserve Bank to finance their liquidity deficit. ??
  • The difference between the short term interest rates and long term interest rates: ??
  • Is called the interest rate spread and the term structure of interest rates provides an indication of the interest rates levels on loans or investments of different maturities. ??
  • Usually we can expect the interest rates level in a developing country to be higher than the interest rate in a developed economy. ??
  • This is due to the higher risk attached to the developing economy. ??
  • Factors such as political and economic uncertainty cause this higher risk. ??
  • Developing economies also need to attract foreign investment to their country  to finance growth. ??
  • Investors’ funds will move towards the highest yield and thereof. ??
  • Developing countries cannot allow interest rates in their countries to become too low. ??

Money Supply

  • The increase in the M3 money supply is an important economic indicator. ??
  • If M, the money supply increases, this means that either (P) prices or Y (output) has to respond to the increase in M. ??
  • Therefore, an increase in the money supply is an important indicator showing that output will increase. ??
  • Whether this will translate to an increase in real production or the price level will depend on factors like production within the economy. ??

Employment

  • In addition to economic growth the employment of people of working age (15 -64 years) is a majot economic objective. ??
  • We need to know more than this; we need to know who the people are that need to be employed. ??
  • The numbers are determined, not only by age, but also by people’s willingness to work. ??

The Economically Active Population (EAP)

  • The EAP is also known as the labour force. ??
  • It consists of people between the age of 15 and 64 who are willing to work for income in cash or in kind and includes: ??
  • Workers in the formal sector- workers in the informal sector. ??
  • Employers any one ??
  • Self employed persons. ??

Unemployed Persons

  • The 2021 estimate of the South African population was million people. ??
  • The EAP numbered million ( % of the population). ??

The Employment Rate

  • The number of employed persons expressed as a percentage of the EAP gives the employment rate. ??
  • The employment rate can also be converted into an index. ??
  • The SA employment rate was % in 2011. ??
  • This is low, compared to rates in developed and even some developing countries such as Argentina and Pakistan. ??
  •  In SA the growth in the economy is not accompanied by the similar growth in employment numbers. ??

Employment indicators are used for:

  • To calculate trends in employment in different sectors or industries. ??
  • This indicates structural changes in the economy. ??
  • To calculate productivity. ??
  • To show the success of the economy in utilizing its full potential. ??

Unemployment Rate

  • Statistics SA (SSA) obtains its labour data each year from Quarterly Labour Surveys  (QLFS). ??
  • It uses the standard definition of the International Labour Office (ILO) to calculate unemployment. ??
  • The strict definition of unemployment is used to calculate the unemployment rate. ??
  • The unemployment rate those people within the economically active population who:
    • Did not work during the seven days prior to the interview. ??
    • Want to work and are available to start work within a week of the week of the interview. ??
    • Have taken active steps to look for work or to start some form of self-employment in four week prior to the interview. ??
  • In SA the official unemployment rate was % in 2021. ??
  • In developed countries, change in the unemployment rate trigger responses. ??
  • From governments to fine-tune the economy. ??
  • Increases require more funds for unemployment insurance (UIF) drawings. ??
  • In developing countries, unemployment is the most important cause of poverty. ??
    [Accept current statistical data]
    [Max 16]

ADDITIONAL PART

  • To give a policy direction in the country. ??
  • To develop mechanism to caution the most affected sectors of the economy promptly
  • e.g.during the 2019-2020 recession/pandemic some companies required a bail out from the government. ??
  • Develop some economic stabilisers to defuse the huge impact that may result from the unexpected economic downturn. ??
  • Open some other alternative markets for their goods and services. ??
  • To do research and advice the business community before the actual moment hits. ??
  • It can be used to stimulate thinking and growth in a number of sectors in the Economy. ??
    [Accept any relevant consideration]
    [Max 10]

CONCLUSION
Countries cannot survive and grow their economies if they do not pay attention to economic indicators for their planning processes.
[Accept any relevant consideration]
[Max 2]

Discuss in detail the following social indicators (Economic and Social Performance Indicators)

INTRODUCTION
Social indicators also called human development indicators as they promote improvement in the standard of living. ??
[Any other relevant definition]
[Max 2]

BODY-MAIN PART
Demographics

  • This is the description of the physical population and its composition.
  • To get this a census is done regularly to obtain this information. ??

Human development Index (HDI)

  •  This is a measure of people’s ability to live long and healthy lives, to communicate, ??
  •  To participate in the community and to have sufficient income to experience a decent lifestyle. ??

Human poverty index (HPI)

  •  It measures life expectancy is measured by the percentage of newborns not expected to survive to age 40. ??
  •  Lack of education is measured by the percentage of adults who are ill- educated. ??

Health and nutrition

  • Life expectancy birth. ??
  • Infant mortality rate. ??

Nutrition indicators

  • Daily calorie intake per person. ??
  • The number of children who go hungry. ??
  • These measures are important to government as they are supplying healthcare and sometime have to include legislation such as adding vitamin A to basic foodstuffs such as bread. ??

Education

  • The standard of living of people is directly connected to their education. ??
  • Educated people are employable and can earn an income and provide for their own wants and needs. ??

Two important measures are:

  • Secondary enrolment percemtage-how many children that start Grade 1 get to Grade 8 and finish Grade 12. ??
  • Adult literacy- People over the age of 15 that can read and write. ??
  • A large percentage of the annual budget is allocated to education. ??

Services

  • Because of our constitution certain basic services must be supplied by the government. ??
  • These services have a direct effect on people’s living standards. ??
  • These basic services differ from rural to urban areas.
    1. Electricity ??
    2. Refuse disposal??
    3. Water supply??
    4. Sanitation??

Housing and urbanisation

  • Urbanisation the process by which an increasing proportion of a country’s population is concentrated in its urban areas as a result of natural increase and migration from rural areas. ??
  • This measures is important as more people come to live in urban areas the greater the demand for housing, services, education, health care etc. ??
  • Housing the percentage of the population living in a permanent dwelling or house. ??
  • The government issue housing subsidies to help poor people to own a house South African citizens or permanent residents earning R3 500 or less a month could apply for this subsidy. ??

International comparisons

  • Figures collected by the World Bank, International Monetary Fund (IMF) and United Nations provide the best data for comparison purpose. ??

Other measures used:

  • Purchasing power parity (PPP) The number of units of one country’s currency that give the holder the same purchasing power as one unit of another country’s currency. ??
  • The Big Mac Index, The index is based on the price of the Big Mac around the world as compared to its price in the United States. ??
    [Max 40]

CONCLUSION
From the above discussion it is clear that social indicators play a significant role in South Africa. It is, therefore, of the utmost importance that we should study their uses in depth.
[Max 2]

MICROECONOMICS-PAPER 2

Discuss in detail the various equilibrium positions with the aid of graphs-PERFECT MARKET (Perfect Market)

INTRODUCTION
A perfect market is a market structure which has a large number of buyers and sellers. 
OR
The market price is determined by the industry (demand and supply curves). 
OR
This means that individual businesses are price takers, i.e. they are not able to influence prices.
OR
Perfect competition is an imaginary situation, whereas monopolistic competition is a reality. ??
[Accept any other relevant introduction]
[Max 2] 

BODY-MAIN PART

  • The indicating of the equilibrium positions on the perfect market structure is of utmost importance because from this point where MC = MR
  • The dotted lines will be drawn to show economic profit or economics loss. 
  • Where the dotted lines intersect the AC and AR curves either normal profit or economic profit or economic loss will be indicated and shadowed.

ECONOMIC PROFIT
1hfttya

Mark allocation for graph:

  • Position / shape of MC curve = 1 mark
  • MR curve = 1 mark
  • Position / shape of AC curve = 2 marks
  • Equilibrium point = 1 mark
  • Indication of price / quantity = 1 mark
  • Shading of economic loss = 2 marks
    MAX MARKS = (8)

Allocate marks on the graph according to the rubric provided and if facts are duplicated again in writing, do not allocate marks. Max of 8 marks.

  • Equilibrium is at E1 i.e. where MC = MR 
  • At this point Q1 goods are produced at a price of P1 
  • The averages cost for Q1 units is point R on the AC curve 
  • Price / AR is greater than AC ( TR > TC)
  • Therefore economic profit is represented by the area P1SRE1 

NORMAL PROFIT
2 normal profits

Mark allocation for graph:

  • Position / shape of MC curve = 1 mark
  • MR curve = 1 mark
  • Position / shape of AC curve = 2 marks
  • Equilibrium point = 1 mark
  • Indication of price / quantity = 1 mark
  • Shading of economic loss = 2 marks
    MAX MARKS = (8)

Allocate marks on the graph according to the rubric provided and if facts are duplicated again in writing, do not allocate marks. Max of 8 marks.

  • Equilibrium is at E1 i.e. where MC = MR
  • At this point Q1 goods are produced at a price of P1 
  • At equilibrium (point E1) average cost is equal to price 
  • The AC curve is tangent to the demand curve which means that P/AR = AC (TR = TC) 
  • The business makes normal profit which is the minimum earnings required to prevent the entrepreneur from leaving the industry. 

ECONOMIC LOSS
3 economic loss


Mark allocation for graph:

  • Position / shape of MC curve = 1 mark
  • MR curve = 1 mark
  • Position / shape of AC curve = 2 marks
  • Equilibrium point = 1 mark
  • Indication of price / quantity = 1 mark
  • Shading of economic loss = 2 marks
    MAX MARKS = (8)

Allocate marks on the graph according to the rubric provided and if facts are duplicated again in writing, do not allocate marks. Max of 8 marks.

  • Equilibrium is at E1, i.e. where MC = MR 
  • At this point Q1 goods are produced at a price of P1 
  • At equilibrium (point E1) price/AR is less than average cost/the AC curve is lies above the demand curve which means that P/AR < AC (TR < TC) 
  • The business makes an economic loss
    A maximum of 24 marks will be allocated for graph illustration and analysis:
    8 marks max per graph illustration - (Max 26 marks)

ADDITIONAL PART CONDITIONS
For a market to successfully operate under perfect competition, the following conditions should prevail at the same time:

  • No firm can influence the market price (price takers) due to a large number of buyers and sellers 
  • Products are identical (homogeneous) 
  • There are no barriers of entry, meaning that there is freedom of entry and exit 
  • Buyers and sellers act independently - no collusion between sellers 
  • No government interference to influence the market – the market is unregulated 
  • Free movement between markets - all factors of production are completely mobile 
  • Both buyers and sellers have full knowledge of all the prevailing market conditions (perfect information) 
  • If any of the above conditions are not met, the market is regarded as an imperfect market
    Any 5 x 2 = [Max 10 marks]

CONCLUSION
Freedom of entry and exit into the perfect market alter the supply of goods on the market. This will result in changes in price which influences the profit or loss of a business.  If price falls to a level where it is equal to the AVC then the firm will shut-down.  [Max 2]

Discuss the monopoly in detail (with/without the aid of graphs) (Imperfect Market)

INTRODUCTION
A firm is regarded as a monopolist when it owns or controls the total supply of a scarce factor of production. Monopoly is a market structure where only one seller operates. ??

BODY: MAIN PART
The characteristics of a monopoly

Number of firms

  • The monopoly consists out of one single firm. ??
  • The monopoly is also the industry. ??
  • Example: Eskom or De Beers – diamond-selling ??
    [Accept any other relevant example]

Nature of product

  • The product is unique with no close substitute. ??
  • Example: Diamonds are unique. ??

Market entry

  • Refers to how easy or difficult it is for businesses to enter or to leave the market ??
  • Is entirely/completely blocked. ??
  •  A number of barriers to entry that may give rise to monopoly can be:
    • Economies of scale ??
    • Limited size of the market ??
    • Exclusive ownership of raw materials ??
    • Patents ??
    • Licensing ??
    • Sole rights ??
    • Import restrictions ??

They decide on their production level

  • The monopolist cannot set the level of output and the price independently of each other. ??
  • If a monopolist wants to charge a higher price, it has to sell fewer units of goods. ??
    Alternatively, a reduction in price will result in a higher output sold. ??
  • A monopolist is confronted with a normal market demand curve ??
  • The demand curve slopes downwards from left to right ??
  • Any point on the monopolist’s demand curve (D) is an indication of the quantity of the product that can be sold and the price at which it will trade. ??

They are exposed to market forces

  • Consumers have limited budgets and a monopoly can therefore not demand excessive prices for its product. ??
  • The monopolist’s product has to compete for the consumer’s favour and money with all other products available in the economy. ??

They face substitutes

  • There are few products that have no close substitutes. ??
  • For example, cell phones can compete with telephone services. ??

They may enjoy favourable circumstances

  • Sometimes an entrepreneur may enjoy favourable circumstances in a certain geographical area. ??
  • For example, there may be only one supplier of milk in a particular town. ??

They may exploit consumers

  • Because a monopolist is the only supplier of a product, there is always the possibility of consumer exploitation. ??
  • However, most governments continually take steps to guard against such practices. ??

Market Information

  • All information on market conditions is available to both buyers and sellers. ??
  • This means that there are no uncertainties. ??

Control over price

  • In the case of a monopoly there are considerable price control, but limited by market demand and the goal of profit maximisation. ??

Long-run economic profit
Can be positive

  • Because new entries are blocked and short-run economic profit therefore cannot be reduced by new competing firms entering the industry ??
  • The monopoly can thus continue to earn economic profit as long as the demand for its product remains intact ??

Body: Additional part
Long run equilibrium of a monopoly
4 ajdgha

Heading = 1 mark
AC = 1 mark
DD/AR = 1 mark
MC = 1 mark
Profit maximisation point =1 mark
Labelling of the axis = 1 mark
Labelling on the axis = 1 mark

Long run equilibrium of a perfect competitor

5 ajkygfda
Heading = 1 mark
AC = 1 mark
DD/AR = 1 mark
MC = 1 mark
Profit maximisation point =1 mark
Labelling of the axis = 1 mark
Labelling on the axis = 1 mark
MAX = 5 marks

CONCLUSION
A monopoly does not always make economic profit in the short run; it can also make economic loss in the short run if the total cost exceeds total revenue. ??

Examine the oligopoly in detail (Imperfect Market)

INTRODUCTION

  • The oligopoly is a type of imperfect market in which only a few large producers dominate the market. ??
    [Accept any other relevant and correct response]

MAIN PART
Nature of product

  • The product may be homogeneous in a pure oligopoly. ??
  • If the product is differentiated, it is known as a differentiated oligopoly. ??

Market information

  • There is incomplete information on the product and the prices. ??

Market entry

  •  Market entry is not easy, it is limited in the sense that huge capital outlay might be necessary. ??

Control over price

  • Oligopolists have considerable control over price, it can influence price, but not as much as the monopolist. ??
  • Oligopolies can frequently change their prices in order to increase their market share and this result in price wars. ??

Mutual dependence

  • The decision of one firm will influence and be influenced by the decisions of the other competitors. ??
  • Mutual dependence (interdependence) exists amongst these businesses.
  • A change in the price or change in the market share by one firm is reflected in the sales of the others. ??

Non-price competition

  • Non - price competition can be through advertising, packaging, after-sales services. ??
  • Since price competition can result in destructive price wars, oligopolies prefer to compete on a different basis. ??
  • Participants observe one another carefully- when one oligopolist launches an advertising campaign, its competitors soon follow suite. ??
  • If oligopolies operate as a cartel, firms have an absolute cost advantage over the rest of the other competitors in the industry. ??

Collusion

  • Collusion is a strategy used by firms to eliminate competition amongst each other. ??
  • It can be in a form of overt collusion where firms can work together to form a cartel and tacit collusion where a dominating business controls the price. ??

Limited competition

  • There are only a few suppliers manufacturing the same product. ??

Economic profit

  • Oligopolies can make an economic profit over the long term. ??
  • Abnormal profits may result to joint decision-making in an oligopoly. ??

Demand curve

  • Slope from left down to the right. ??
  • It is known as the kinked demand since it contains the upper relatively elastic slope and the lower relatively inelastic slope. ??
    [Accept any other relevant and correct response]
    [Max. 26]

ADDITIONAL PART
Oligopolist may increase their market share using non-price competition strategies by:

  • branding their product to create an impression that its product is for a particular age group or income group. ??
  • aggressive advertising which inform customers about the business or product it provides.??
  • Using appealing packaging to bring out important features of their product.
  • improving their customer service in order to ensure that they return to their businesses.??
  • providing relevant and precise information, which is crucial to the customers, since there are competitors in the market, customers will patronize the businesses that provides relevant information. ??
  • extending shopping hours to the convenience of customers.
  • Offering loyalty rewards to customers which will encourage their return to spend accumulated rewards. ?? 
    [Accept any other relevant response]
    [Max.10]

CONCLUSION

  • In South Africa, oligopolists have been found to be illegally manipulating prices to their benefit, yet to the detriment of consumers and have been penalized for such action. ??
    [Accept any other relevant response]

Compare and contrast any TWO types of market structures (perfect to imperfect/imperfect to imperfect) in detail in terms of the following. - Number of businesses - Nature of product - Entrance - Control over prices - Information - Examples - Demand curve - Economic profit/loss - Decision-making - Collusion - Productive/Technical efficiency - Allocative efficiency (Perfect Market and Imperfect Market)

‘’Market structures are classified under Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly’’ Compare all FOUR market structures in a tabular form.
NB: Learners should write in full sentences even if the comparison is done in a tabular format). (Marks depend on the combination of market structures to be examined)

Criteria   Perfect Competition  Monopolistic Competition   Oligopoly  Monopoly 
Number of firms So many that no firm can influence the market price So many that each firm thinks others will not detect its actions  So few that each firm must consider the others’ actions and reactions  One seller and there is no competition. The seller is the price maker.
Nature of product Homogeneous/i dentical in terms of the physical appearance Heterogeneous /differentiated Homogeneous or heterogeneous Only one product with no close substitutes
Entry Completely free/easy to enter. There are no barriers to enter Free. There are no barriers to enter Varies from free to restricted Completely blocked by legal restrictions and cost advantages e.g. natural and artificial monopolies
Information Complete Incomplete Incomplete Complete/ Incomplete
Collusion Impossible Impossible Possible Unnecessary
Firm’s control over the price of the product None. Prices are determined by demand and supply Some Considerable, but less that in monopoly Considerable, but limited by goal of profit maximisation
Demand curve for the firm’s product Horizontal (perfectly elastic) Downward- sloping Downward- sloping, may be kinked Equals market demand curve: downward-sloping
Long run economic profit Zero/normal profit Zero/normal profit Can be positive/econom ic profit Can be positive/economi c profit

PLEASE NOTE: THE ABOVE TABLE SHOULD BE VERBALLY WRITTEN AS PER ESSAY INSTRUCTION

Discuss in detail how the following factors lead to the misallocation of resources in the market (Market Failures)

INTRODUCTION
Market failure is when the forces of supply and demand fail to allocate resources efficiently / when markets fail to allocate goods and services efficiently. ??
[Accept any other correct introduction]
[Max 2]

BODY: MAIN PART                          

1. Missing Markets

  • Markets are often incomplete in the sense that they cannot meet the demand for certain goods. ??
  • Public goods:
  • They are not provided by the price mechanism because producers cannot withhold the goods from non-payment and there is often no way of measuring how much a person consumes. ??

Public goods have the following features:
Non-rivalry:

  • The consumption by one person does not reduce the consumption of another person e.g. a lighthouse. ??

Non-excludability:

  • Consumption cannot be confined to those who have paid, so there are free riders e.g. radio and TV in South Africa. ??

Merit goods

  • These are goods/services that are deemed necessary or beneficial to the society, e.g. education, health care etc. ??
  • These goods are highly desirable for general welfare but not highly rated by the market, therefore provide inadequate output/supply. ??
  • If people had to pay market prices for them relatively too little would be consumed – the market will fail. ??
  • The reason for undersupply of merit goods is that the market only takes the private costs and benefits into account and not the social costs and benefits. ??

Demerit goods

  • These are goods/services that are regarded as bad or harmful for consumption hence we should use less of these e.g. alcohol, cigarettes, etc. ??
  • Demerit goods lead to a lot of social costs, therefore, the government charges sin tax / excise duties to discourage the consumption of such goods. ??
  • While the market is willing to supply demerit goods, it tends to oversupply demerit goods. ??
  • Some consumers may be unaware of the true cost of consuming them. ??

2 Lack of information

  • Technical and allocative efficiency require that both producers and consumers have complete and accurate information about the costs and benefits of the goods and services produced and consumed in the market. Producers and consumers make production and consumption decisions based on the information they have. ??
  • When information is incomplete or inaccurate, it leads to wrong decisions about what to produce, how to produce and for whom to produce, and a waste of resources occurs. ??
  • Producers might not know all the different technologies and production techniques that are available and the different resources that can best be used to produce goods/services more efficiently. ??
  • Consumers might not know that the price of a product is lower from some other suppliers or about the harmful effects of a product since they might just base their decisions to consume on the information from a misleading suppliers. ??

3. Immobility of factors of production

  • Markets do not respond to changes in consumer demand if resources cannot be easily reallocated or due to a lack of information??
  • Labour takes time to move to into new occupations and geographically to meet the changes in consumer demand. ??
  • Physical capital e.g. equipment, buildings, land and raw materials can only move from one place to another at a high cost, but cannot be moved to fit a change in demand. ??
  • Technological applications change production methods e.g. use of robots rather than physical labour. It takes time for most industries to adapt. ??
  • With greater technological change there is an increasing need for workers to become flexible, to update skills, change employment, occupations and work patterns. ??
    [Max 26]

ADDITIONAL PART

  • Motivate why government has implemented a national minimum wage in the labour market. ??
  • Pressure was put on the South African government to introduce labour laws which require employers to pay minimum wages. ??
  • The application of minimum wage laws is needed to improve a redistribution of income. ??

The main objectives were:

  • To redress inequality (Gap between wealthy and poor) ??
  • To improve the standard of living. ??
  •  Government tried to protect domestic workers and farm workers — thus preventing exploitation. ?? 
    [Max 10]
    [Accept any other correct relevant response]

CONCLUSION
Governments intervene in the market when market forces cannot achieve the desired output.
[Max 2]
[Accept any other relevant conclusion]

Discuss in detail state intervention as a consequence of market failures, with the aid of relevant graphs (Market Failures)

INTRODUCTION
The purpose of government intervention is to ensure that the right quantity of resources is allocated to the production of output so that society as a whole
[Accept any other relevant introduction]
[Max 2] maximizes its benefits. ??

BODY: MAIN PART
6 ajhgahdf

  • Sometimes government will set the price of a good or service at a maximum level that is  below the market price ??
  • The government intervene and passes a law that suppliers may not charge more than the maximum price ??
  • The immediate effect is that quantity supply will drop ??
  • The original market equilibrium price and quantity is P and Q respectively ??
  • The price set by the government is P1, at this price the demand will increase to Q1 and the supply will decrease to Q2 ??
  • The difference between Q1 and Q2 is the shortfall that will be created on the market ??
  • The shortage caused by the price ceiling creates a problem of how to allocate the good since the demand has increased ??
  • Black markets start to develop
    [Mark allocation: Graph 6 and discussion max. 10 marks]

7 taxation khad

  • The appropriate way to intervene in the market by government is by levying taxes as a method to recover external cost ??
  • The original market equilibrium at e, with P as the equilibrium price and Q as the equilibrium quantity ??
  • The tax increase will shift the supply curve to the left ??
  • New equilibrium at E1 ??
  • A tax would raise the price from P to P1 ??
  • The production will decrease from Q to Q1 ??
    [Mark allocation: Graph total 6 marks and discussion max 10 marks]

ADDITIONAL PART

  • Explain the supply of undesirable goods in South Africa and how the government can deal with it. ??
  • Items such as cigarettes, alcohol and non-prescription drugs are examples of demerit or undesirable goods. ??
  • These goods are often over supplied in the market, due to the fact that the external cost is not added to the market price. ??
  • Some consumers may be unaware of the true cost of consuming them, their negative externalities. ??
  • Government can ban their consumption or reduce it by means of taxation. ??
  • Taxation on these products will increase the market price and hopefully the demand for these products will drop. ??
    [10 marks]
    [Accept any other correct relevant response]

CONCLUSION
The intervention of government ensures that inefficiencies is eliminated and that the market is operating effectively ?? [Accept any other relevant conclusion]
[Max 2]

CONTEMPORARY ECONOMIC ISSUES-PAPER 2

Discuss in detail the consequences of inflation (Inflation)

INTRODUCTION

  • This is a constant and significant increase in the general price level of goods and services in the country over a certain period of time, e.g. a year. ??
    [Max 2]
    [Accept any relevant introduction]

BODY-MAIN PART
Creditors and Debtors

  • Whereas borrowers (debtors) benefit from price increases, lenders (creditors) suffer due to price increases. ??
  • This is because borrowers receive money with a relatively high purchasing power and they repay their loans with money with low purchasing power, unless interest rates are sufficient to prevent this occurrence. ??

Salary and Wage Earners

  • Price increases affect people whose incomes are relatively fixed (in other words, people whose incomes remains constant or do not increase at the same rate as prices do. ??
  • This group includes retired people, pensioners and the poor. ??
  • As prices increase, their almost fixed incomes purchase less and less. ??
  • However there are individuals and entrepreneurs whose incomes often increase at a rate that is higher than the inflation rate and they do not suffer but gain from inflation. ??
  • Globalization results in increased employment opportunities in the economy due to increased productivity, the need to produce more goods both for local and international markets rises in globalised economies. ??
  • The demand for increased skilled labour becomes a need as a result, this demand for labour benefits the local labour market in increased employment opportunities and growth. ??

Investors and Savers

  • Different types of investments are affected by inflation: Assets with fixed nominal values. ??
  • These assets have a fixed nominal value and give a return if they are held until maturity. ??
  • When they are paid, because their nominal values remain constant, the purchasing power of the nominal values decreases as prices increase (that is, their real value decreases). ??

Assets with Flexible Market Values

  • The holders of shares and fixed property usually gain by price increases because the nominal values of these assets tend to increase at least proportionately to the rate of inflation (that is, their market values are flexible). ??
  • Often the prices of these assets increase more rapidly than increases in the general price level.??
  • In this case, inflation creates wealth to the advantage of those holding such assets. ??

Tax Payers

  • South Africa has a progressive personal income tax system. ??
  • This means that marginal and average tax rates increase in harmony with the income level. ??
  • The higher level an individual’s income, the greater the percentage of income he or she has to pay tax. ??
  • With inflation, taxpayers’ nominal income (wages and salaries) rise even when their real income remain unchanged. ??

Taxes are levied on nominal income and not on real income.

  • Therefore if the income tax schedule remains unchanged inflation increases the average rate of personal income tax. ??
  • Individuals will have to pay higher taxes even if they are actually no better off than before. ??
  • This phenomenon known as bracket creep, lads to a redistribution of income from taxpayers to the government. ??
  • Bracket deep results from a combination of inflation and progressive income tax. ??
  • It has the same effect as an increase in the tax rate. ??

Industrial Peace

  • Wage bargaining is often accompanied by strikes and mass action. ??
  • These actions can sometimes spill over into violence, which affects society at large. ??
  • In extreme situations in the presence of exceptionally high inflation together with a government that is determined not to yield to wage increase demands (which can push inflation to even higher levels), widespread civil unrest follows. ??

Inflation has a negative effect on economic growth

  • Inflation leads to increased uncertainty in the economy. ??
  • This uncertainty discourages savings and investments especially in the long term. ??
  • Which are necessary for economic growth –result reduced economic growth. ??

Inflation affects the real money value and savings

  • Because inflation reduces the real value of money, it affects the real value of money saved in particular. ??
  • This means that inflation, the rand buys fewer goods and services than before. ??
  • It also means that the real money value saved is worth less at the end of the savings period than when the money was saved. ??
  • e.g. if a consumer receives 5 % interest on his/her savings account while the inflation rate is 8%, then the real rate of interest on the consumer’s savings is -3%.??

Inflation has an adverse effect on a country’s balance of payments (BOP).

  • If a country’s rate of inflation is higher than that of its trading partners the prices of exported goods increase while the prices of imported goods decrease. ??
  • This leads to loss of competitiveness in the export market, which in turn leads to decreased exports. ??

This has a negative effect on the country’s balance of payments (BOP).

  • The loss of export competiveness can also increase unemployment inflation affects the redistribution of income in a country. ??

The effects of inflation are uneven.

  • While it does not clearly benefit anyone and certainly harms most, it also harms some less than others. ??
  • Inflation also tends to redistribute income from low-income groups to higher income groups. ??
  • This is because people in the low income groups do not have assets than can rise in value faster than the rate of inflation to help them overcome the effects of inflation. ??
  • Powerful groups such as trade unions large companies and the wealthy people, are able to increase their share of national income at the expense of disadvantaged people such as pensioners the unemployed and the welfare recipients. ??

Inflation has social and political costs

  • When inflation continually causes rising prices it makes people unhappy and can disturb relations between employers and the employees and between customers and traders or service providers. ??
  • People in lower-income brackets feel severe effects of increases in the price of essential items such as bread, maize meal rental and transport costs. ??
  • This can lead to social unrest and political unrest. ??

Inflation feeds on itself and causes further inflation

  • This is called the inflation spiral. ?? e.g. higher wage demands cause producers to increase their prices to maintain their profits.
  • This happens again and again pushing prices further every time. ??
  • If the government does not keep this wage price spiral in check, inflation may get out of control and become hyperinflation. ??
    [Max 26]

ADDITIONAL PART
Debate the merits (benefits) of administered prices by the government

  • These are prices regulated by the government e.g. home owner’s costs on water/household fuel (paraffin and electricity) medical care (public hospitals) communication (telephone calls, telephone rentals and installations/postage cell communications /transport (petrol). ??
  • Most of the administered prices are adjusted once a year which brings price stability. ??
  • Regulated prices are restricted as to the extent to which prices may vary, depending on the government’s objectives. ??
  • Administered prices provide additional revenue to national treasury. ??
  • It appears that some of these prices remain extremely robust over the short term. ??
    [Accept any other relevant response]
    [Max 10]

CONCLUSION

  • If inflation is not controlled by the proper and effective instruments, it can have challenging problems to the economy in general. ??

Discuss in detail the measures to combat demand-pull and/or cost-push inflation (Inflation)

INTRODUCTION
COST PUSH

Inflation is a sustained and significant increase in general price level over a period of time and a simultaneous decrease in the purchasing power of money.
Accept any other relevant introduction. ??
[Max 2] 

BODY: MAIN PART
Causes of cost-push inflation

Increase in Wages:

  • In South Africa, increase in wages constitute more than 50% of Gross Value Added at basic prices ??
  • If the increase in wages is not accompanied by an increase in production, the cost of production will rise ??
  • Producers will increase the prices of their products to offset the high cost of production strikes and stay-aways / labour union activities ??

Key inputs/ increase in prices of imported capital goods

  • When the prices of key inputs that are imported increase, domestic cost of production ??
  • increases especially in the manufacturing sector ??
  • Supply shocks e.g. sudden increase of oil causes a knock-off effect ??

Exchange rate depreciation

  • A decrease in the value of the rand will result in an increase in prices of imports ??

Profit margins

  • When firms increase profit margins, the prices that consumers pay also increase ??
  • Sometimes firms use their market power to push up prices ??

Productivity

  • Less productive factors of production will lead to increased cost per unit ??
  • Strikes and stay-aways often reduce production output and can result in price increases ??

Natural disasters

  • Natural disasters such as drought, flood and global warming can impact on the cost of production ??
  • This is often the case in relation to food prices ??

Interest rates

  • An increase in interest rates results businesses paying more money for capital loaned firms recover these costs by increasing the prices of their products ??

Increase in taxation

  • Increase in direct tax like company income tax may lead to businesses increasing their prices to offset the extra burden ??
  • Increase in indirect tax such as custom duty will lead to increase in costs of supplying a particular product, therefore the price will increase ??
  • Administered prices increase e.g. fuel prices
  • Shoplifting and losses caused by employees are added to the prices of products ??
    [Accept any other relevant fact. Maximum 8 marks for headings]
    [Max. 26]

DEMAND PULL INFLATION
Total spending on domestic goods and services in the economy consists of the spending by households, firms, the government and the foreign sector.

  • Total spending = C + I + G + (X-M). ??

Causes of demand inflation
Increase in consumption [C]
– consumers expenditure will increase mainly for three reasons:

  • a. If consumers save less & spend more??
  • b. Decrease in personal income tax. ??
  • c. A greater availability of consumer credit, because of decrease in interest rate. ??

Investment [I] –When business invest this increase demand for labour, cement, sand and bricks. ??

  • Supply cannot keep up with the increase in demand and this will increase prices. ??
  • Lower interest rates may result in an improvement in the sentiment and profit expectations of businesses. ??
  • Businesses invest more and this may lead to an increase in the demand of goods and services that are part of the investment (for example, a new building requires cement bricks and labour).??
  • If aggregate demand increases at a faster rate than aggregate supply, price increases will follow.??

Government Spending [G] – Three main reasons.

  • a. New capital projects??
  • b. Consumption expenditure on education, health, and protection. ??
  • c. Social expenditure on public work programme to create jobs and increase in social allowances. ??

Export earnings [X]

  • a. When economy of trading country improve. ??
  • b. When global economy expands. ??

Access to credit

  • There is greater availability of consumer credit (by means of credit cards) of the availability of cheaper credit as a result of decreases in lending rates. As new credit is extended the credit multiplier kicks in and more credit is created. ??

Consumption spending

  • Most governments will at times increase expenditures on education, health, protection and safety (for example, military equipment such as bomber jets and submarines). ??

Social spending

  • Governments sometimes feel they have to do something substantive about unemployment and poverty. ??
  • They borrow money and spend it on public works programmes or raise the level of social grants year after year at a higher rate than the inflation rate. ??
  • Such expenditures invariably lead to inflation because they add to aggregate demand without adding anything to aggregate supply. ??

Commodities demand

  • The world’s demand for commodities expands and contracts like business cycles do. During an expansionary period, foreign demand increases and this leads to greater volumes of exports. The income earned from these exports adds to aggregate demand and prices increase. ??

BODY: ADDITIONAL PART YES / NO

  • Inflation targeting is when a particular percentage is set as an acceptable level for an increase in general price levels ??
  • The SARB's inflation target is a range of 3% and 6% ??
  • The aim of inflation targeting policy is to achieve and maintain price stability ??
  • The implementation of the inflation target is easy to understand – expressed in numbers which makes it very clear and transparent ??
  • It reduces uncertainty and promotes sound planning in the public and private sectors ??
  • It provides an explicit yardstick that serves to discipline monetary policy and improves the accountability of the central banks ??
  • The SARB make use of monetary policy, specifically the repo rate to keep the inflation within the target range ??
  • The government make use of fiscal policy regarding public sector revenue and expenditure ??

Positive effects

  • Where demand is higher than supply an increase in interest rates help to bring the demand down ??
  • The policy can helps businesses to make economic plans without worrying about the effects of high inflation ??
  • South Africa's price level has been fairly stable since the introduction of the inflation targeting policy in 2000 ??

Negative effects

  • Inflation targeting can cause a reduction in economic growth ??
  • This is because the raising of interest rates, result in a decrease in total spending which is needed for production to increase ??
  • Decreased economic growth can increase unemployment ??
  • South Africa has been experiencing an increase in unemployment since the implementation of the policy in 2000 ??
  • Inflation targeting is difficult to implement when the cause of inflation is supply shocks ??
    [Max. 10]

CONCLUSION

  • Any relevant higher order conclusion that should include:
    • A summary of what has been discussed without repeating facts already mentioned in the body. ??
    • An opinion or valued judgement on the facts discussed. ??
    • Additional support information to strengthen the discussion. ??
    • A contradictory viewpoint with motivation. ??
    • Recommendations. ??
    • E.g. Inflation can be a threat to the normal functioning of the economy; therefore, measures like monetary and fiscal are vital to keep the phenomenon under control. ?? 

Examine in detail the effects of tourism (Tourism)

INTRODUCTION

  • This is the activities of people travelling to and staying in places outside their usual environment for a period not longer than one consecutive year for leisure, business and other purposes and not related to a remunerative activity from within the place visited ??
    [Max 2]

BODY - MAIN PART
Gross domestic product (GDP)

  • Tourism impacts mostly on the services industry than on agriculture or manufacturing although there are upstream effects when agriculture provides foodstuffs to restaurants and manufacturing provides vehicles for transport ??

Direct contribution on GDP

  • Statistics South Africa (SSA) shows that in 2020 inbound tourists contributed R69 billion and domestic tourists R billion, amounting to R billion - about % of South Africa's GDP ??

Indirect contribution on GDP

  • If the indirect contribution is added, tourism add about % to GDP ??
  • The WTTC estimated that tourism contributed % to the GDP of the world economy in 2020??
  • In developing economies the service sector is responsible for around % of GDP, while it is responsible for more than % of GDP in developed economies ??
  • South Africa is similar to that of developed economies and services contributed more than % of GDP in 2020. ??

Employment

  • Tourism has a major effect on employment and this amounted to million workers in 2020??
  • Tourism is the world’s largest generator of jobs ??

Reasons:

  • Tourism is labour intensive ??
  • More jobs can be created with every unit of capital invested in tourism than elsewhere
  • Tourism employs many skills ??
  • It ranges from accountants and hairdressers to tour guides and trackers, ??
  • the tourism industry draws upon numerous skills ??
  • Tourism can provide immediate employment ??
  • If one quarter of tourists’ accommodation establishment in South Africa starts to offer live entertainment to quests, thousands of entertainers could be employed within days ??
  • Tourism provides entrepreneurship opportunities ??
  • The tourism industry accommodates informal sector enterprises, from craft and fruit vendors to pavement vendors, chair rentals ??

Poverty

  • Tourism is widely recognized as one of the fastest and more effective redistribution mechanisms in development ??
  • It brings development to the poor in rural areas ??
  • Tourism provides an alternative to urbanisation, permitting women and youth to continue a rural family lifestyle while giving them business opportunities ??
  • E.g. to start and operate small-scale tourism businesses around community asserts (forests, parks and rivers) ??

Externalities

  • The rapidly expanding tourism industry could have both positive and negative impacts that extend well into the future ??
  • While tourism attracts large amount of revenue, it can also cause undue environmental damage that can harm the very foundation on which it depends ??
  • All other economic resources, tourism uses resources and produces wastes and also creates environmental costs (pollution) and benefits in the process ??
  • Rapid growth in tourism aiming at short-term benefits usually results in more negative effects and these includes the degeneration of traditions and cultural values and environmental damage to sites and setting ??

Environment
Tourism activities create environmental stress:

  • Permanent environmental restructuring which includes major infrastructure ??
  • Waste product generation such as biological and non-biological waste that damages fish production ??
  • Direct environmental stress caused by tourist activities, e.g. the destruction of vegetation and dunes ??
  • Effects on population dynamics such as migration and increased urban densities ??

Investment

  • An adequate physical, economic and basic services infrastructure is essential for tourist destinations which means they invest in the following:
    • Transport infrastructure, e.g. roads, airports ??
    • Communication and infrastructure including telephone lines, electronic signal stations and radio, TVs’ ??
    • Energy infrastructure such electricity and liquid fuel ??
    • Basic service infrastructure such as clean water and sewerage systems ??
      [Max. 26]

ADDITIONAL PART
How can Indigenous Knowledge Systems be used to promote tourism in South Africa?

  • More cultural villages can be improved to facilitate and promote tourism e.g. Shangana in Mpumalanga, Basotho in the Free State and Simunye Zulu Lodge in Kwazulu-Natal. ??
  • Where guides explain and demonstrate storytelling and indigenous knowledge practices. ??
  • Advertising campaigns domestically and internationally by travel agencies, hotels and B & B, lodges and SA Tourism can focus on promoting these heritage sites in brochures and fliers, social media. ??
  • These actions will make tourists more aware of these attractions ??
  • Encourage tourists to experience different cultures and townships - experience life at home with a household and eat at a shebeen or township restaurant ??
  • World Heritage Sites of South Africa can be promoted for their cultural significance e.g. the Fossil Hominid Sites of Sterkfontein, Mapungubwe Cultural Landscape, Richtersveld Cultural and Botanical Landscape, Vredefort Dome and Robben Island ??
  • Environmental World Heritage Sites of South Africa selected for their natural importance namely the Cape Floral Region Protected Areas, Isimangaliso Wetlands Park as well as uKhahlamba/Drakensberg Park which has been selected for its mixed significance ??
  • Arts and culture festivals e.g. the National Arts Festival, the Hermanus Festival, Awesome Africa Music Festival and Macufe African Cultural Festival should more widely be advertised to encourage tourists to attend ??
  • According to the World Health Organisation, a large majority of the African population make use of traditional medicines for health, social-cultural and economic reasons and forms part of the unique experience tourists experience when visiting local villages ??
  • In South Africa tourists are made more aware of the important role traditional medicine plays in poverty reduction and employment creation ??
  • Relaxation of restrictive tourist visa laws to facilitate easier entry into South Africa ??
    [Accept any other relevant answers]
    [Max. 10]

CONCLUSION

  • South Africa attracted over million tourists in 2020 /For every 8.1 additional tourist to South Africa, one new job is created/one per cent increase in tourism adds R million annually to the SA economy. ??
    [Accept any other relevant higher order conclusion]
    [Max. 2]

Examine in detail the benefits of tourism (Tourism)

INTRODUCTION

  • Tourism is the activities of people travelling to and staying in places outside their usual environment for no more than one consecutive year for leisure, business or other purposes PP ?? 
    [Accept any other correct relevant response]
    [Max 2]

MAIN PART
Business sector

  • Tourism stimulates business in areas such as accommodation and entertainment ??
  • The construction industry, in private-public partnership with the government to provide the infrastructure, manufacturing sector and recreation sector all benefits from increased demand due to tourism ??
  • The previously disadvantaged communities get entrepreneurial opportunities through the black economic empowerment schemes ??
  • A large number of people get business opportunities in the informal sector e.g. selling of artefacts ??
  • Local retailers may have an increase in sales (and profits) because of increased demand from tourists ??
  • Private businesses and government work in partnership to provide the infrastructure needed for tourism ??
  • This increases the market share of and income of the these businesses ??
  • Allow existing businesses to improve the quality and variety of their products PP ??
  • Allow natural monopolies e.g. Table Mountain Cableway to achieve abnormal profits PP ??
  • The public sector also provides a range of financial incentives for private sector tourism investment (grants, subsidies, loans, tax rebates) PP ??
    [Max 10]

Infrastructure development

  • Adequate and well-maintained infrastructure is essential for tourist destinations PP. ??
  • Locals share this infrastructure with tourists ??
  • Government often prioritises economic infrastructure such as ports and beaches ??
  • In addition to physical and basic infrastructure, social infrastructure is also important for the growth of tourism??
  • Most of the SDIs and development corridors also have tourism as an important focus PP ??
    [Max 8]

Households

  • Members of households earn income from the tourism sector as tour operators, travel agents etc. ??
  • Many households are indirectly involved in tourism as employees e.g. in hotels, transport sector. ??
  • Entrepreneurs from households that operate as curio producers or musicians can earn income from tourism . ??
  • A large number of households acquire skills in the tourism industry. ??
  • School curriculum and learnership offer opportunities to acquire these skills . ??
  • Encourages rural development because many tourist attractions are located in rural areas PP ??
    [Accept any other correct relevant response]
    [Max. 26]

ADDITIONAL PART
Tourism can be successfully marketed in less popular destinations by:

  • advertising the firms' attractions in a variety of media including social media and internet which may reach both local and international potential tourists. ??
  • focusing on a clear message that concentrates on the strength of the attraction/ uniqueness of the destination. ??
  • using the indigenous knowledge systems of that particular area where possible PP. ??
  • describing the service offered in the best possible way to catch the interest of the likely tourist PP E.g. the use of slogans. ??
  • charging a price that is competitive and money well spent for the service offered. ??
  • helping the tourist to view the entire service as value for money – deliver a worldclass visitor experience ??
  • highlighting other places of interest in the vicinity of the attraction as part of a package ??
  • focusing on proudly South African products/services / Sho’t Left campaign PP ??
  • help disadvantaged South Africans to benefit from tourist attractions in the less popular destinations PP ??
    [Accept any other correct relevant response]
    [Max. 10]

CONCLUSION
A weaker exchange rate has been a major contributing factor to South Africa's tourism industry growth over many years. ??
[Accept any correct relevant response]
[Max 2]

Discuss in detail how the government can ensure sustainable development (Environmental Sustainability)

INTRODUCTION
Environmental sustainability can be defined as development that meets the need of the present without compromising the ability of future generations to meet their own needs. ??

BODY: MAIN PART
Public sector intervention

Because it is difficult to enforce measures to ensure sustainability the government has to intervene. ??

Environmental taxes
Environmental taxes (green taxes) can be added to the cost of goods and services for the negative impact they have on the environment. ??
The government uses the income generated through these taxes to protect the environment. ??
Taxes can be imposed on petrol, paper, emission gases etc. ??
In 2003 the government has legislated the use of biodegradable plastic bags which consumers had to pay for??
The hope is that they will use fewer bags and ensure a litter free environment. ??

Charging for dumping of waste
A monthly fee as part of municipal accounts is charged for collection of waste, sewage and garbage. ??
Households already pay for the collection of rubbish. ??
The factory owner might clean up his waste if it cost him to dump it. ??
Industries might also pay for emitting gases that can be harmful to people and the environment. ??
Subsidies
Subsidies can be awarded to businesses that are willing to reduce pollution and waste. ??
Waste can also be reduced by using new techniques or equipment such as solar energy. ??
Emission gases from factories can be reduced using new technology. ??

Granting property rights
Normally owners of properties tend to be more protective over their resources than users who are only interested in the profits the resources offer. ??
For this reason the government might grant property rights over a specific area. ??
Property rights empowers owners to negotiate contracts with businesses who wish to exploit the area’s resources. ??

Marketable permits
A government can decide on the maximum desired level of pollution in an area. ??
It then distribute pollution rights (marketable permits) to factories within that area. ??
This means that each factory can pollute to a certain limit. ??
It means that marketable permits are licenses that polluters can buy or sell to meet the control levels set by government. ??

Education
Incorporating topics into the curriculum of school fosters awareness. ??
The public is gradually been made aware of this rising problem. ??
Plastic, bottles and cartons can be recycled or made biodegradable. ??

Public sector control
If the government’s intervention does not attain the desired results, then it has to intervene more directly by setting and enforcing limits. ??

Environmental Impact Assessment
In SA every projected construction, mining or similar development has to undergo an assessment by qualified environmental professionals. ??
To prove that it will not cause unwarranted environmental damage and that the damage can be repaired after construction. ??
The cost if built into the project. ??

Command and Control
Regulations that are set and enforce environmental limits or standards. ??
Quantity: e.g. set the limit to the amount of fish to catch, or limit the season catching certain species of fish. ??
Quality: e.g. drinking water quality is carefully monitored and controlled. ??
Air quality in workplace is subject to minimum standards. ??
Social effect: e.g. noxious fumes from factories, dumping of medical waste near settlements, and noise pollution. ??

Voluntary agreements
Agreements between government and businesses voluntarily to address negative environmental impacts of industries. ??
Businesses voluntary agree to decrease the emissions of pollutants. ??
Most prefer negotiations so that they can tailor their specific needs and include it into their planning??
Agreements can be formal, which is legally binding contract or informal. ??
[Max 26]

ADDITIONAL PART
Government does not exercise effective control over the continuous dumping of waste because of a lack of coordination between departments. ??
The fines imposed on industries that dump waste are too lenient and they continue polluting the environment. ??

The minimum standards set for hazardous gas and fuel emissions are not enforced or adjusted. ??
The recycling of waste materials are not widely encouraged and promoted and landfill sites are overflowing. ??
Government has various laws that is not really effectively implemented. ??
Poor service delivery also adds to the problem in certain areas. ??
[Accept any other relevant answer]
[Max 10]

CONCLUSION
Each and every individual, business and government needs to stand together to save our planet.
[Accept any other relevant conclusion]
[Max 2]

Discuss in detail the following problems and the international measures taken to ensure sustainable development (Environmental Sustainability)

INTRODUCTION
Environment refers to the physical surroundings and physical conditions that affect people’s lives. ??
The ever-increasing pressure on our environment originates from increasing population numbers and excessive consumption??
Our air, land, and water are under constant assault from the ever-growing ravages of man-made pollution generated chiefly by industrialized societies. ??
[Accept any appropriate introduction]
[Max 2]

BODY-MAIN PART
Conservation

  • Conservation is necessary because human actions cause pollution and over-utilisation of  resources. ??
  • Conservation is a strategy aimed at achieving the sustainable use and management of natural resources. ??
  • Conservation seeks a creative continuity of the environment while ensuring that change is sympathetic to the quality of life for both present and future generations. ??
  • Certain aspects of conservation need to be taken into account.
  • Firstly, there is an opportunity cost. ??
  • Secondly, externalities are often present. ??
  • Lastly, self-interest has a short term horizon – meaning that decisions cannot be left entirely to market forces. ??
  • Over utilization of resources causes a reduction in supply, increase in prices, contradiction of demand and a search for substitutes. ??
  • This necessitates conservation of both renewable and non-renewable resources. ??
  • Conservation has to be concerned with limiting what is harvested in order to maintain a stable stock at least at the minimum level. ??
  • Government can use permits and quotas as two possible direct control methods in order to maintain the stock of resources at the minimum level. ??

Preservation

  • Preservation involves any strategy undertaken to safeguard the environment, maintain its current condition and keep it as habitable as possible for people and animals. ??
  • Heritage sites, indigenous forests, specifies of animals etc. that have special cultural or environmental significance, are often targeted preservation. ??
  • Preservation is not likely to work as a private enterprise because the benefit to society is much bigger than the income of the producer. ??
  • It may be possible to use cost-benefit analysis to calculate the social benefits of preservation of the environment.
  • The weaknesses in market solutions require the government to intervene in order to preserve environment assets. ??
  • Government could do any of the following:
  • Buy or expropriate – Environmental assets are simply closed for human use. ??
  • Subsidise-A subsidy would increase net benefits to the owner and raise the property’s present value. ??
  • Controls – The government can compel the owner to apply control measures like restricting the quantities exploited or number of visitors allowed per day. ??
    [26 Max]

ADDITIONAL PART
Stockholm Conference (1972)

  • The Stockholm Conference was the first major large scale international meeting on the environment convened with the support of the United Nations. ??
  • The meeting agreed upon a declaration containing 26 principles concerning the environment and development, an action plan with 109 recommendations and a resolution. ??
  • The meeting directly impacted on the environmental policies of many countries. ??

Rio de Janeiro Earth Summit (1992)

  • This meeting acknowledged the importance of cooperation in addressing environmental concerns that threaten sustainability. ??
  • The conference helped to make countries around the world aware of the dangers of unsustainable development. ??
  • Unfortunately the principles outlined and accepted at the summit were not binding and subsequently many countries did not confirm to them. ??

Rio + 5 (1997)

  • This conference noted that globalization made some countries poorer – ??
  • In particular African countries and the least developed countries showed a low level of growth or even declined. ??

Kyoto Protocol for Climate Change (1997)

  • Countries committed themselves to reducing their total emissions of greenhouse by 5 %.??
  • Unfortunately, China was excluded from this agreement and the USA withdrew. ??

World Summit on Sustainable Development (2002)

  • The objective of this summit held in Johannesburg was to conserve natural resources in a world that is growing in population. ??
  • The meeting focused on issues like poverty eradication, water and sanitation, energy, health agriculture and biodiversity. ??

COP 17 (2011)

  • The main goal of the conference held in Durban was to establish a treaty to limit carbon emissions and plan strategies to keep global temperature rise to less than 2 degree Celsius in the 21st Century. ??
  • Although the framework for this treaty was established it was not finalised. ??

CONCLUSION

  • The solution to our environmental problems will depend on our ability to make sound economic decisions that take account of the natural environment and to change our individual behaviour and attitudes. ??
    [Accept any other relevant conclusion]
    [Max 2]

Table of contents

  1. How to use this study guide 
  2. Study and examination tips 
  3. Overview of the topic: budgeting 
  4. Unpacking the sections of the budget 
    4.1 Sales and collections from debtors 
    4.2 Purchases and payments to creditors 
    4.3 Unpacking the budget (calculations)
    4.4 Analyzing and interpreting budget information
  5. Check your answers
  6. Message to grade 12 learners from the writers 
  7. Thank you

How to use this study guide

The main intention of this study guide is to address the challenges with specific areas of subject content that was poorly answered in the past nsc papers. This is informed by the detailed question-by-question analysis and findings provided in the diagnostic reports. The material presented in this booklet focuses on the progression across the fet phase and the content overlap, as illustrated in the table below.

  GRADE 12  GRADE 10/11 (overlap) 
Field 1:
Financial Accounting  

Companies

  • Concepts and bookkeeping
  • Financial Statements
  • Cash Flow, Ratios (analysis and interpretation)

Reconciliations analysis
Bank, Debtors and Creditors
VAT

Bookkeeping (sole trader/ partnership)

  • Adjustments
  • Financial Statements
  • Ratios/ Interpretation

Reconciliations prepare
VAT concepts and calculations

Field 2:
Managerial Accounting

 Manufacturing concerns

  • Production Cost Statement
  • Unit cost calculations and break-even analysis

Budgeting (analysis)

  • Projected Income Statement
  • Cash Budget

Manufacturing

  • Concepts and ledger accounts
  • Break-even analysis

Budgeting (prepare)

  • Concepts and preparation
  • Basic calculations
Field 3:
Managing Resources

Stock valuation

  • FIFO, weighted average andspecific identification

Fixed asset management(analysis)

Auditing, internal controlsand ethics

Stock (clubs)

  • Perpetual and periodic

Fixed assets (prepare)

  • Depreciation, disposal

Auditing, internal controls and ethics

Grade 12 learners (and teachers) must first address prior knowledge (concepts and calculations), before moving to the more challenging aspects of analyzing, interpreting and commenting. The next logical step is to tackle examination-type questions with the understanding that all questions will make provision for the different cognitive levels.

This study guide provides:

  • Explanatory notes comprising simple definitions, examples, formulae and short-cuts (handy hints).
  • Short focus-activities to test specific skills and content.
  • Application activities in the form of examination-type questions.
  • Adapted questions from past examination papers.

Plan of Action:

  • You need to master the basic skills by using this manual, together with all other resources such as textbooks and study guides, to obtain more practice
    examples.
  • Test your knowledge by attempting a variety of examination questions.
  • Make notes of your shortcomings and start the process again until you are able to get the correct answers to the activities

Study and examination tips

Know the paper: General structure and layout.

  • The Accounting paper is one 3-hour paper for 300 marks.
  • It consists of 6 compulsory questions; the marks per question range from 30 to 80 marks. Each question comprises a number of sub-questions that catering for the different cognitive levels.
  • The content covered must conform to the requirements of CAPS, as follows:
Financial Accounting   50% - 60%   150 - 180 marks 
Managerial Accounting  20% - 25%  60 - 75 marks
Managing Resources   20% - 25% 60 - 75 marks

The trend in past papers was as follows:

  • Question 1, 2 and 6 are generally shorter questions (30 - 45 marks).
  • Question 3 and 4 are generally the longer questions, comprising Financial Statements, the Cash Flow Statement and Interpretation.
  • The question paper comes with a specially prepared ANSWER BOOK, with appropriate space, formatting and certain details, which means you can answer the questions in any order.

Strategy:
√ Budgeting forms part of the Managerial Accounting field and, together with Manufacturing, it must constitute 20% - 25% of the paper.
√ Past trends show that the topic is normally assessed in Question 5 or 6 and is 30 - 40 marks; ± 20 marks will require calculations and the balance will be on analysis and interpretation.
√ Examiners will switch between the Cash Budget and the Projected Income Statement. There are subtle differences in interpretation, but the calculations are similar. (Detailed explanations are provided in Section 5 of this document).
√ The calculations require good arithmetical ability, which is developed over a period of time, and starting in Grade 7.
√ These skills must include calculating percentages, increases, decreases or specific amounts using equations.
√ Interpretation requires good comprehension ability. Be mindful of the language of the paper, and practice using many past papers.

Overview of the topic: Budgeting

What are some of the words that come to mind?
overview huiha 
Discuss the words that are confusing Piet.
Make a list of other relevant words/ terms that came up in your discussion/ brainstorming session.
An EXPLANATION that highlights the purpose of budgeting:
Budgeting is an internal control tool that involves projecting business results, using existing
business information as well as other external factors, making adjustments and taking decisions to achieve the objectives of the business.

Summary of the topic:

summary of budgeting

Start-up Activity: Do I understand the difference between Receipts, Payments, Income and Expenses?
Place the correct amount in the respective column/s. Amounts can apply to more than one column.

NO    INFORMATION    CASH BUDGET  PROJECTED INCOME STATEMENT  
 RECEIPT  PAYMENT    INCOME  EXPENSE 
 a Cash sales are expected to be R7 400 per month at a 25% mark-up on cost.        
 b An old computer with a carrying value of R4 400 will be sold for R2 500 cash in the next month.        
 c Depreciation on equipment is estimated to be R950 per month.        
 d An annual insurance premium of R5 200 is paid by cheque. R1 200 of the payment is for the next financial year.        

What are we expected to cover in Grade 12?

  • Back to basics
    • Concepts and terminology from previous Grades.
    • The difference between the Cash Budget and the Projected Income Statement. o Purpose of preparing a Cash Budget or a Projected Income Statement.
  • Arithmetical ability
    • Calculate missing amounts in the budget.
    • Calculate amount/s for specific items using information from the budget, such as the loan balance or the total cost of a vehicle purchased.
      • The answers are usually:
        specific amounts, percentages, increases, decreases or ratio relationships.
  • Analysis and Interpretation
    • Compare Actual vs Budgeted figures:
      • Provide possible reasons for differences.
      • Provide solutions (internal controls).
    • Consider ethical issues in terms of cash management and adherence to the budget.
    • Problem solving:
      • Control of cash, debtors, creditors, stock
      • Business decisions such as buy/rent fixed assets, sales and profitability.

Unpacking the sections of the budget:

4.1 Sales and collection from debtors
4.1 khgda

EXAMPLE: Cash sales amounts to 30% of total sales.
Calculate the missing amounts.

  TOTAL SALES
100%
CASH SALES
30%
CREDIT SALES
70%
March  320 000  96 000  224 000
April  350 000   245 000
May 365 000  109 500  
June    120 000  

RECEIPT-TREND FROM DEBTORS: (Must equal 100% of credit sales)

  • Percentage of credit sales, over 2, 3 or 4 months.
  • First portion (part) collected in the month of sale or in the month following the sales month:
    • Is there a discount offered for receipts in the first month?
    • Is provision made for bad debts?

EXAMPLE: The trend in the way debtors settle their accounts is as follows: 20% pay in the month of sale and receive a 5% discount.
35% pay in the month following the month of sale.
40% pay two months after the sales month.
The balance are bad debts.
4.1 receipt trends jyga

4.2 Purchases and payments to creditors

4.2 ahgda

At times, payment is made early to take advantage of a discount.

TOTAL PURCHASE AMOUNTS: (two possible options)

1. AMOUNTS ARE GIVEN 
Purchase amounts are provided in the question.
Cash purchases are 20% of total purchases.
Information:
  March  April 
Sales   72 000  83 200
Purchases  45 000  52 000

 

Cash Purchases   20% 
March 
45 000 x 20%
9 000
April 
52 000 x 20%
10 400
2. COST OF SALES IS THE TOTAL AMOUNT PURCHASED
The business maintains a base stock and stock is replaced monthly.
Cash purchases are 20% of total purchases.
The business uses a profit mark-up of 50% on cost.
Information:
  March  April 
Sales   102 000 88 500
Purchases  ? ?

 

Cash Purchases   20% 
March 
102 000 x 100/150 x 20%
13 600
April 
88 500 x 100/150 x 20%
11 800

DO THE CALCULATIONS:

  • The business maintains a base stock. Stock is replaced monthly.
    • Calculate the cash and credit purchases for the three months.
    • Identify the amount that will be paid in May 2017.
  • Total sales:
    2017
    March   April   May 
    R320 000    R350 000 R365 000
  • Profit mark-up is 60% on cost.
  • 20% of purchases are paid for in cash.
  • Creditors are paid two months after the month of purchase.
  TOTAL SALES   COST OF SALES 100%    CASH PURCHASES 20%  CREDIT PURCHASES 80% 
MARCH   320 000      
APRIL 350 000      
MAY  365 000      
   
Amount to be paid in May 2017:  

LET’S PRACTICE: (Sales and Purchases)

The following information appeared in the books of Mouse Traders:

REQUIRED:
1.1 Complete the Debtors’ Collection Schedule for June and July 2018.
1.2 Complete the section of the Cash Budget to show cash sales, cash from debtors, cash
purchases and payments to creditors. 

INFORMATION:

  1. The business uses a profit mark-up of 75% on cost.
  2. Sales:
    • Cash Sales account for 20% of total sales.
    • Debtors pay according to the following pattern:
      • 30% in the month of sales, subject to a 5% discount.
      • 50% in the month following the sales month.
      • 18% two months after the sales month.
  3. Purchases:
    • The business maintains a base stock. Stock is replaced in the same month that sales take place.
    • Credit purchases makes up 60% of total purchases.
    • Creditors are paid two months after the month of purchase.
  4. Schedule of total sales:
    MARCH  APRIL   MAY   JUNE   JULY 
     R61 250   R73 500   R64 750   R78 750   R70 000

4.3 UNPACKING THE BUDGET: Examples of different calculations
4.3 akhgdua

ADDITIONAL INFORMATION:

  1. Cash sales is 30% of total sales.
    February total sales is R130 000.
    130 000 x 30%
    39 000
  2. The amount must come from a Debtors Collection Schedule that must be prepared.
  3. Rent income increases by 8% from 9 200 x 108%
    1 February 2017. 9 200 x 8% = 736; 9 200 + 736
    9 936
  4. Cash purchases accounts for 20% of total purchases. Total purchases for February 2017 is R81 000.
    81 000 x 20%
    16 200
  5. Credit purchases are paid in 60 days (two months after purchase).
    18 500 x 80/20
    74 000
  6. Insurance will increase by 5% in March. 2 457 x 100/105
    2 340
  7. The loan was received on 31 January 2017. A fixed instalment and interest are paid on the last day of each month.
    Interest is not capitalized. 
              360 000
    (400 000 - 40 000) x 12% x 1/12
    3 600
  8. The business has four sales assistants; each earns the same wage. One sales assistant will receive a special bonus of 60% of her salary in March.
    9 040/4 = 2 260 x 60%
    9 040 + 1 356
    (3 x 2 260) + (2 260 + 1 356)
    10 396
  9. Advertising is estimated at a fixed percentage of monthly cash sales.
    1 080/36 000 x 100 = 3%;
    33 000 x 3%
    990
  10. Sundry expenses increase by 5%  each month.
    2 400 x 105% = 2 520 x 105%
    2 646
  11. Closing balance for the previous month is the opening balance for the next month.
    41 200
  12. Surplus/ Deficit + Opening balance = Closing Balance
    y + 41 200 = 39 500 y = 39 500 - 41 200
    (1 700) 

LET’S PRACTICE: (Calculations)
The following information appeared in the records of Abram Traders.

REQUIRED:
2.1 Complete the Debtors Collection Schedule.
2.2 Calculate the missing amounts in the budget for May and June.
2.3 Calculate the amount of the Fixed Deposit invested on 1 June.

INFORMATION:
A. Information for the budget period March - June 2018.

   ACTUAL  BUDGETED
MARCH  APRIL  MAY   JUNE
Sales (cash and credit)    148 500   168 000   142 500   ?
 Purchase of stock   99 000   112 000    ?  103 000
 Rent Income  11 200  11 200  ?  ?
 Manager’s Salary   15 400   15 400   ?  ?
 Wages (Sales Assistants)   19 500  19 500  ?  ?
 Advertising    ?   ?   ?  2 438
Commission expense  4 455  5 040  4 275  ?
Drawings  ? ? ? ?
Interest on loan 3 600 3 600 ? ?
Interest on fixed deposit 0 0 0 540
Sundry expenses 8 000 ? ? ?

B. Additional Information:

  • 25% of total sales are cash sales.
  • Debtors pay according to the following trend:
    60% pay in the month following the transaction month.
    37% pay in the 2nd month after the transaction month.
    03% written off as bad debt.
  • Stock is replaced in the month it was sold. A base stock is maintained.
    • Goods are sold at a mark-up of 50% on cost.
    • All purchases are made on credit. Creditors are paid in the following month and receive a 4% discount.
  • Salaries and wages:
    • The manager will receive a 10% increase on 1 June.
    • The business employs three sales assistants on the same wage. They will receive a 6% inflationary increase on 1 May. One sales assistant will receive a bonus of 50% of her wages in June.
  • Sundry expenses increase by 5% on the previous month.
  • Rent income will increase by 9% on 1 May.
  • Interest on loan is not capitalized. It is paid at the end of each month at 12% p.a. R50 000 of the loan will be paid on 31 May.
  • The owner will draw R5 500 per month. R1 200 will comprise stock.
  • The sales staff receive a commission equal to a fixed percentage of total sales.
  • The advertising budget will increase by 6% on 1 June.
  • A fixed deposit was invested on 1 June. Interest of 9% p.a. is receivable on 30 June.

ACTIVITY 1:

The information provided below relates to Brakpan Stationers.

REQUIRED:
1.1 Explain the importance of comparing budgeted figures with actual figures achieved for the same period. (2)
1.2 Calculate the missing amounts (indicated by a, b and c) in the Debtors’ Collection Schedule for the budgeted period March to May 2015. (4)
1.3 Calculate the following budgeted figures:
1.3.1 Total sales for March 2015. (2)
1.3.2 Payments to creditors during May 2015. (4)
1.3.3 Salaries of the shop assistants for April 2015. (3)
1.3.4 The % increase in the salary of the manager expected in May 2015. (3)
1.3.5 Amount of the additional loan expected to be acquired on 1 April 2015. (3)
1.4 An official of the local municipality has offered to recommend Brakpan Stationers supply the municipality with stationery to the value of R500 000.
However, he will only do this if he receives a cash payment of R20 000 from the owner.
What advice would you offer? State TWO points. (4)
1.5 The owner’s wife is angry that he has not been adhering to the cash budget. The owner says that he deliberately did not keep to the budget because he wanted to improve the overall results of the business.

  • Identify THREE over-payments in April. Provide the figures to support your answer.
    Provide a valid reason for each over-payment to support the owner’s decisions. (6)
  • Explain how the difference of opinion with his wife can be avoided in future. (2)
  • State TWO other strategies that the owner and his wife could consider in future to improve the results of the business. (2)

INFORMATION

  1. Sales and debtors’ collection:
    • TOTAL sales for April 2015 and May 2015 have been estimated as follows:
      April 2015   70 000 
      May 2015  78 750
    • 80% of all sales are cash sales. The rest of the sales are on credit.
    • Debtors are expected to pay as follows:
      • 60% within the month of sale, subject to a 4% discount.
      • 38% in the month following the month of sale.
      • 2% of debts are written off in the second month following the month of sale.
    • Debtors’ collection schedule:
        CREDIT SALES R  MARCH  R  APRIL  R  MAY R
      February  31 500 11 970    
      March 10 500  a 3 990  
      April 14 000   8 064 b
      May c      
            18 018 12 054 
  2. Purchase of merchandise and payments to creditors:
    • A fixed-stock base is kept, i.e. the stock sold is replaced at the end of that month.
    • The business uses a mark-up of 75% on cost.
    • 70% of all merchandise is purchased on credit.
    • Creditors are paid in full in the month following the month of purchase.
  3. Salaries:
    Shop assistants
    • The business has 12 shop assistants who are employed on equal pay in March 2015.
      Nine of the shop assistants are entitled to a bonus equal to 80% of the monthly salary in April 2015.
    • All shop assistants will receive a general increase in May 2015.
  4. Loan:
    An additional loan will be taken from Atlantic Bank on 1 April 2015. The interest rate is 14% p.a.
  5. Extract from the Cash Budget for the three months ending 31 May 2015:
RECEIPTS   MARCH  APRIL   MAY 
  Budgeted Budgeted  Actual Budgeted
 Cash sale of stock   42 000   56 000   59 200   63 000
 Collections from debtors   18 018   12 054    12 800  ?
 Rent income   5 600   6 160   6 160   6 160
 Additional loan acquired  0  ?  ?  0
 PAYMENTS          
 Cash purchase of stock   9 000   12 000  28 000  13 500
Payment to creditors  58 500  21 000  21 000  ?
Salaries of shop assistants 102 000  ? ? 110 160
Salary of manager  16 000   16 000  40 000 19 200
Interest on loan (14% p.a.) 6 300 7 175 7 175 7 175
Delivery expenses to customers 9 200 9 200 0 9 200
Insurance (paid annually)  0 27 000 27 000 -
Advertising  0 0 0 20 000
Purchase of vehicle 0 0 180 000  0
Vehicle expenses 0 0 4 000 4 000
Sundry expenses 5 300  5 300  5 300  5 800

ACTIVITY 2:

You are provided with a partially completed Projected Income Statement for Dawn Distributors for the period 1 October 2015 to 31 December 2015. It was prepared by the bookkeeper.

REQUIRED:
2.1 List TWO items on the Projected Income Statement,that would not appear on a Cash Budget. (2)
2.2 Fill in the missing amounts denoted by A to E on the Projected Income Statement. (16)
2.3 Take the following additional information into account and calculate the following:
2.3.1 The percentage increase in the wages of cleaners in December 2015. (4)
2.3.2 The monthly salary due to the sales manager in December 2015. (4)
2.3.3 Total credit sales expected in December 2015. (3)
2.3.4 The balance of the loan on 1 November 2015. (3)

INFORMATION:

  1. The business uses a mark-up percentage of 60% on cost.
  2. Credit sales comprise 75% of total sales.
    Sales are expected to increase by 10% per month and by 20% during December.
  3. The business employs a sales manager and an administration manager. The sales manager earns R300 more than the administration manager (per month). The managers are entitled to an increase of 8% p.a. from 1 December 2015.
  4. R20 000 of the loan is repayable on 30 November 2015. Interest on loan at 9% p.a. is payable every quarter. The next payment is due on 1 January 2016.
  5. Advertising expense per month is budgeted at a fixed percentage of total sales.
  6. Income tax is estimated to be 30% of the net profit before tax. 

G. INFORMATION FROM THE PROJECTED INCOME STATEMENT FOR OCTOBER TO DECEMBER 2015.

 

OCTOBER

NOVEMBER

DECEMBER

 

BUDGETED

ACTUAL

BUDGETED

BUDGETED

Sales

120 000

98 400

132 000

?

Cost of sales

75 000

58 800

B

99 000

Gross profit

A

 

?

?

Other income

20 700

18 200

20 700

21 200

Rent income

10 000

10 000

10 000

10 000

Discount received

1 200

1 000

1 200

1 200

Commission income

9 500

7 200

9 500

10 000

Gross operating income

       

Operating expenses

48 300

 

?

?

Salaries (managers)

17 100

17 100

17 100

D

Wages (cleaners)

3 200

3 200

3 200

3 376

Maintenance

4 000

1 650

4 000

4 000

Telephone

2 000

4 280

2 000

2 500

Insurance

1 800

1 800

1 800

1 800

Advertising

2 400

1 900

C

3 168

Depreciation

6 200

8 000

6 200

8 000

Trading stock deficit

0

680

0

500

Stationery

3 150

3 100

3 200

3 250

Sundry operating expenses

8 450

8 420

8 500

8 550

Operating profit

17 400

 

?

?

Interest income

225

200

200

200

Profit before interest expense

17 625

     

Interest expense

585

585

585

435

Net profit before income tax

?

 

?

?

Income tax

?

 

?

?

Net profit after tax

E

 

?

?

4.4 ANALYSING AND INTERPRETING BUDGET INFORMATION

Frequently asked Questions (FAQ)

  • Comparing ACTUAL AMOUNTS to BUDGETED AMOUNTS.
    The difference is referred to as a VARIANCE.

    ACTUAL AMOUNT

    EXPLANATION

    Well controlled

    The actual amount is equal to or very close to the budgeted amount.

    Over-budget

    Under-spending. The amount is significantly lower than the budgeted amount.

    Under-budget

    Over-spending. The amount is significantly higher than the budgeted amount.

    • Possible reason for the difference (variance).
    • Possible solutions/ advice/ recommendations (internal controls).

      ACTUAL AMOUNT

      POSSIBLE REASON

      SOLUTION/ADVICE

      Well controlled

      Well managed and communicated.

       

      Over-budget

      Incorrect budgeting; trying to cut costs; lack of supervision; negligence. unrealistic budgeting.

      Adjust the budget; do not attempt to cut the cost of essential services; always consult the budget.

      Under-budget

      Lack of supervision; no company rules; abusing privileges, unrealistic budgeting.

      Investigate; set rules; supervise; adjust the budget if necessary.

       

      RELATE THE REASON/ ADVICE TO THE SPECIFIC ITEM BEING ANALYSED.

EXAMPLE:
Kobus is concerned about the following items, which were under/ over budget for February 2016:

Item

Budgeted

Actual

Under/ over budget

Collections from debtors

174 200

61 800

Under

Payments to creditors

39 400

15 600

Under

Insurance

2 260

0

Under

Drawings

18 000

52 000

Over

Explain why each of the items reflects a problem for the business and advise Kobus regarding each case.

Item

Explanation

Collection from debtors

Any two valid reasons

  • Alternative valid answers acceptable.
    • Collections are much lower than expected.
    • This will cause a cash flow problem.
    • Internal control of debtors is poor.

Payments to creditors

Any two valid reasons

  • Alternative valid answers acceptable.
    • These are a lot lower than they should have been.
    • Suppliers will stop selling to the business.
    • Interest can be charged by the creditors.
    • Poor credit rating for the business.

Insurance

Any two valid reasons

  • Alternative valid answers acceptable.
    • The policy will lapse (risk of being uninsured).
    • It will be difficult to replace assets.
    • There could be an increase in premiums in future.

Drawings

Any two valid reasons

  • Alternative valid answers acceptable.
    • This puts strain on meeting more important business expenses, i.e. strain on cash resources.
    • This puts additional strain on the cash flow problem.
    • It is not ethical for the owner to draw more money while the business is struggling, e.g. increased loans, overdraft.
  • OTHER INTERPRETIVE SCENARIOS:
    • Related Receipts (income) and Payments (expenses)
      • Sales is influenced and affected by Advertising, Delivery Expenses, Commission Expenses and Packing Material.
    • Rent or buy decisions
      • Property or fixed assets such as machinery. Take into consideration the availability of finance, the cost of borrowing, the long-term benefits of the asset etc.
    • Identifying steps taken by the owner to correct/ improve the cash-flow situation:
      • Observe the pattern of the cash balance (positive/ overdraft).
      • Wasteful expenditure.
      • Introduction of additional capital, loans or investments.

ACTIVITY 3:
Below is information relating to DIY Hardware. The business is owned by John Temba. His inexperienced bookkeeper, Mabel, has prepared a Cash Budget.

REQUIRED:
3.1 Identify TWO items that Mabel has incorrectly entered in the Cash Budget. (4)
3.2 Apart from the items mentioned above, name TWO other items in the Payments Section of the Cash Budget that would NOT appear in a Projected Income Statement. (4)
3.3 After correcting all the errors John has identified the following:

 

JAN 2013

FEB 2013

Cash deficit for the month

(14 950)

(52 400)

Cash at the beginning of the month

 

35 350

Cash at the end of the month

A

B

Identify or calculate A and B. Indicate negative figures in brackets. (3)
3.4 Identify or calculate the missing figures C and D in the extract from the Cash Budget. (7)
3.5 Complete the Debtors’ Collection Schedule for February 2013. (10)
3.6 Calculate the percentage increase in salary and wages from 1 February 2013. (2)
3.7 Calculate the interest on the fixed deposit for January 2013. (2)
3.8 John pays Speedy Deliveries to deliver hardware to his customers free of charge. He budgets for this at a rate of 8% of total monthly sales.
3.8.1 Calculate the delivery expense figure budgeted for January 2013. (2)
3.8.2 John is of the opinion that the delivery service is costing him too much.
Which TWO points should John consider before deciding on whether or not to discontinue this service? (4)
3.9 On 31 January 2013 you identified the figures below. Explain what you would say to John about each of the following items at the end of January 2013. Give ONE point of advice in each case. (9)

JANUARY 2013

   

BUDGETED

ACTUAL

 

Advertising

1 600

0

Stationery

1 000

4 400

Staff training

2 000

700

 

3.10 John will have a problem with replacing his old computers and cash registers in March 2013. The cost of these items amounts to R150 000 and he expects them to last 5 years. However, he does not have cash available to pay for this. His options are:

  • Raise a new loan at an interest rate of 14% p.a. to be repaid over 36 months. 
  • Hire (Lease) the assets from IT Connect Ltd at R5 100 per month.
  • Invite his friend James to become an equal partner in the business and provide capital of R150 000.
    John realizes that all three options have the advantage of not requiring the R150 000 outlay in March 2013.

Consider each of these options and explain ONE other advantage and ONE disadvantage of each option. Provide figures to support your answer. (6)

INFORMATION:

  1. Sales, purchase of stock and cost of sales:
    • Total sales for November 2012 to February 2013 were as follows:
      • November: R150 000
      • December: R200 000
      • January: R160 000
      • February: R140 000
    • 60% of all sales are cash sales; the rest is credit sales.
    • The mark-up is 33.3% on cost of sales at all times.
    • Stock is replaced on a monthly basis.
    • 50% of all purchases are cash, the rest is on credit.
  2. Debtors’ collection:
    Debtors are expected to pay as follows:
    • 30% of debtors pay their accounts in the month of sale (current).
    • 50% pay in the month following the sales transaction month (30 days).
    • 8% pay in the second month (60 days).
    • 2% are written off.
  3. Creditors’ payment:
    Creditors are paid in the month after purchases, so as to receive a 5% discount.
  4. EXTRACT FROM THE CASH BUDGET FOR JANUARY AND FEBRUARY 2013
     

    JAN 2013

    FEB 2013

    RECEIPTS

       

    Cash sales

    96 000

    84 000

    Collection from debtors

    70 000

    ?

    Interest on fixed deposit (7% p.a.)

    ?

    0

    Fixed deposit: Magic Bank maturing on 1 Feb. 2013

    0

    42 000

    Commission income

    ?

    ?

    Rent income

    8 500

    8 800

         

    PAYMENTS

       

    Salary and wages

    15 000

    16 800

    Stationery

    1 000

    1 000

    Telephone

    ?

    ?

    Payment to creditors

    71 250

    D

    Cash purchase of stock

    C

    52 500

    Repayment of existing loan

     

    100 000

    Furniture bought on credit

    30 000

     

    Delivery expense for delivery of hardware to customers

    ?

    11 200

    Training of staff

    2 000

    2 000

    Advertising

    1 600

    1 400

    Depreciation

    12 500

    12 500

    Sundry expenses

    3 500

    3 600

    Drawings by owner

    ?

    ?

    Vehicle expenses

    0

    500

ACTIVITY 4: (40 marks; 25 minutes)
4.1 Explain why:
4.1.1 Depreciation and bad debts will not appear in a Cash Budget. (2)
4.1.2 A cash budget is different from a Projected Income Statement. (2)

4.2 KIT KAT DISTRIBUTORS LTD
You are provided with information for the budget period November and December 2018.

REQUIRED:
4.2.1 Complete the Debtors’ Collection Schedule. (12)
4.2.2 Calculate the missing amounts in the Cash Budget denoted by (i) to (iv). (20)
4.2.3 Comment on the internal controls on collection from debtors and payment to creditors. Provide TWO points. (4)

INFORMATION:
A. Cash sales amount to 40% of total sales.
Goods are marked-up by 25% on cost.
B. Debtors are granted credit terms of 30 days. The actual collection trend revealed that:

  • 50% of debtors pay in the month of the sale to receive a 5% discount.
  • 30% is received in the month following the month of sales.
  • 18% is collected in the second month after the sale.
  • 2% of debtors is written off.

C. Stock is replaced in the month it was sold, i.e. a base stock is maintained.
D. 80% of stock is bought on credit. Creditors are paid in full in the month following the month the purchase was made.
E. Salaries and wages are expected to remain the same for the budget period. Staff members on leave in December will receive their pay in November - the total amount is R35 600.
F. A loan will be received from a director, Thabo, on 1 November 2018, at 13% interest p.a. Interest is not capitalised. A fixed monthly instalment and interest will be paid at the end of each month.
G. The company will pay an interim dividend in December. H Rent increased by 8% on 1 November 2018.
I. Incomplete Debtors’ Collection Schedule:

MONTH

CREDIT SALES

NOVEMBER

DECEMBER

September

180 000

32 400*

 

October

186 000

55 800

*

November

*

92 625

*

December

210 000

 

*

TOTAL

 

*

*

J. Information from the Projected Income Statement:

 

NOVEMBER 2018

Sales

325 000

Cost of sales

260 000

Commission income

24 800

Depreciation

12 600

Interest expense

1 625

K Incomplete Cash Budget for 2018:

RECEIPTS

NOVEMBER

DECEMBER

Cash sales

130 000

(i)

Cash from debtors

   

Commission income

24 800

26 000

Rent income

(ii)

19 710

Loan from director Thabo

150 000

0

TOTAL RECEIPTS

   

PAYMENTS

   

Cash purchases of stock

52 000

56 000

Payments to creditors

(iii)

208 000

Directors fees

20 000

20 000

Salaries and wages

180 600

(iv)

Loan instalment (including interest)

13 625

(v)

Interim dividends

0

86 500

Sundry expenses

15 875

16 510

TOTAL PAYMENTS

   

5. CHECK YOUR ANSWERS

Start-up Activity
Place the correct amount in the respective column/s.
Note that amounts can go in more than one column.

NO  INFORMATION   CASH BUDGET  PROJECTED INSOMCE STATEMENT
    RECEIPT  PAYMENT   INCOME   EXPENSE 
 a Cash sales are expected to be R7 400 per month at a 25% mark-up on cost.  7 400     7 400   5 920
 b  An old computer with a carrying value of R4 400 will be sold for R2 500 cash in the next month.  2 500       1 900
 c Depreciation on equipment is estimated to be R950 per month.         950
 d An annual insurance premium of R5 200 is paid by cheque. R1 200 is for the next financial year.    5 200     4 000

EXAMPLE: Cash sales amounts to 30% of total sales.
Calculate the missing amounts.

 

TOTAL SALES 100%

CASH SALES 30%

CREDIT SALES 70%

March

320 000

96 000

224 000

April

350 000

105 000

245 000

May

365 000

109 500

255 500

June

400 000

120 000

280 000

Debtors’ Collection Schedule:

    Credit Sales R  2017
    May R June R
Actual   March 224 000 89 600  
April 245 000 85 750 98 000
Expected  May 255 000 48 545 89 425
June 280 000   53 200
    223 895 240 625

DO THE CALCULATIONS: PURCHASES AND PAYMENTS TO CREDITORS

 

TOTAL SALES

COST OF SALES 100%

CASH PURCHASES 20%

CREDIT PURCHASES 80%

MARCH

320 000

320 000 x 100/160
200 000

40 000

160 000

APRIL

350 000

350 000 x 100/160
218 750

43 750

175 000

MAY

365 000

365 000 x 100/160
228 125

45 625

182 500

Amount to be paid in May 2017  160 000

1.1 LET’S PRACTICE: (Sales and Purchases)

MONTH

CREDIT SALES

MAY

JUNE

JULY

March

49 000

8 820

   

April

58 800

29 400

10 584

 

May

51 800

14 763

25 900

9 324

June

63 000

 

17 955

31 500

July

56 000

   

15 960

CASH FROM DEBTORS  52 983  54 439  56 784

1.2 CASH BUDGET (EXTRACT)

CASH RECEIPTS

MAY

JUNE

JULY

Cash sales

12 950

15 750

14 000

Cash from debtors

52 983

54 439

56 784

       

CASH PAYMENTS

     

Cash purchases of stock

14 800

18 000

16 000

Payments to creditors

21 000

25 200

22 200

Workings: Calculation of the cost of sales and credit purchases:

 

MARCH

APRIL

MAY

JUNE

JULY

Sales

R61 250

R73 500

R64 750

R78 750

R70 000

Cost of Salesx 100/175

35 000

42 000

37 000

45 000

40 000

Credit Purchases COS x 60%

21 000

25 200

22 200

27 000

24 000

LET’S PRACTICE (Calculations)
2.1 DEBTORS COLLECTION SCHEDULE

MONTHS

CREDIT SALES

 

MAY

JUNE

March

111 375

                              

52 725

 

April

126 000

 

75 600

46 620

May

106 875

   

64 125

June

       
     

128 325

111 745

2.2 CASH BUDGET FOR THE PERIOD 1 MAY - 30 JUNE

 

MAY

JUNE

Cash sales

35 625

38 625

Cash from debtors

128 325

111 745

Rent income

12 208

12 208

Payments to creditors

107 520

91 200

Manager’s salary

15 400

16 940

Wages (shop assistants)

20 670

24 115

Interest on loan

3 600

3 100

Commission expense

4 275

4 635

Sundry expenses

8 820

9 261

Advertising

2 300

2 438

Drawings

4 300

4 300

2.3 Calculate the amount of the Fixed Deposit invested on 1 June.

  • 540 x 12 = 72 000
         9%

ACTIVITY 1: BRAKPAN STATIONERS
1.1 Explain the importance of comparing budgeted figures with actual figures achieved for the same period.
One valid explanation

  • Deviations can be determined and remedial measures can be put in place.
  • Establish whether the budgeting was realistic.
  • To identify trends of mismanagement of cash. (2)

1.2 Calculate the missing amounts (indicated by a, b and c) in the Debtors’ Collection Schedule for the budgeted period March to May 2015 (4)

6 048 
5 320
15 750

1.3.1 Calculate budgeted total sales for March 2015. (2)

  • 10 500 x 100/20 = 52 500

1.3.2 Calculate the amount budgeted for payments to creditors during May 2015. (4)

  •        40 000
    70 000 x 100/175 x 70% = 28 000 any one part correct
    or
    12 000/30 x 70 = 28 000

1.3.3 Calculate the budgeted salaries of the shop assistants for April 2015. (3)

  • 102 000/12 = 8 500 8 500 x 3 = 25 500
    15 300 x 9 = 137 700
    25 500 + 137 700 = 163 200 any one part correct
    OR: 102 000 one mark + 61 200 one mark = 163 200
    (102 000 X 80% X 9/12)

1.3.4 Calculate the % increase in the salary of the manager expected in May 2015. (3)

  • 3 200 (1 mark)
    (19 200 - 16 000) /16 000 = 20% any one part correct

1.3.5 Calculate the amount of the additional loan expected to be acquired on 1 April 2015. (3)

  • 875 x (100 x12) /14 = 75 000 any one part correct

1.4 An official of the local municipality has offered to recommend that Brakpan Stationers supply the municipality with stationery to the value of R500 000. However, he will only do this if he is paid R20 000 in cash.
Give advice in this regard. State TWO points.
Any two suggestions (4)

  • This is actually a bribe, which is unethical.
  • If this information is made public, it will have a negative effect on the business.
  • The owner must submit a formal tender to secure a contract through the normal processes.

1.5 Identify THREE over-payments made in April. Provide figures to support your answer. Provide a valid reason for each over-payment to support the decision taken. (6)

  Over-payment with figures
 Item and figure
Valid reason 
The bonus paid to the manager in February 2015 (R24 000) was not taken into account. He has retained the services of a valuable employee.
Purchase of vehicle (R180 000). The difference between  motor vehicle expenses and delivery expenses is R5 200 per month.
3 Cash purchase of merchandise (R28 000) was significantly higher than the budgeted figure (R12 000). Possibly to take advantage of discounts on bulk purchases.

1.6 Explain how this difference of opinion with his wife can be avoided in future.

  • They should have a specific meeting to determine the budget jointly and the owner should consult his wife before spending on unbudgeted items.

State TWO other strategies that the owner and his wife could consider in future to improve the results of the business.
Any two valid points:

  • Advertise monthly. / Reduce the number of shop assistants.
  • Reinstate deliveries to customers. / Negotiate longer credit terms with suppliers.

ACTIVITY 2 : DAWN DISTRIBUTORS
2.1 Identify TWO items that Mabel has incorrectly entered in the Cash Budget.
Any TWO

  • Cost of sales / Discount received / Depreciation / Trading stock deficit

2.2

A Gross profit   120 000 - 75 000 = 45 000
B Cost of sales 132 000 x 100/160 = 82 500
Or
132 000 x 62,5% or 132 000 - (132 000 x 37,5%)
C Advertising 2 400/120 000 = 2%
132 000 x 2% = 2 640
D Salaries 17 100 x 108% = 18 468
Or
17 100 + 1 368 = 18 468
Net Profit after tax 17 040
(17 625 - 585) x 30% = 5 112
17 040 - 5 112 = 11 928

2.3.1 The percentage increase in wages that the cleaners will receive in December 2015.

  •          176
    (3 376 - 3 200) x 100 = 5,5% (one part correct)
           3 200

2.3.2 The monthly salary due to the Sales Manager in December 2015.

  • (17 100 - 300) = 8 400 (8 400 + 300) x 108% = 9 396 (one part correct)
               2

2.3.3 Total credit sales expected in December 2015.

  • (99 000 x 160% ) x 75% = 118 800 (one part correct)
    OR
    132 000 X 120% = 158 400 X 75% = 118 800

2.3.4 The balance of the loan on 1 November 2015.

  • 585 x 1200/9 = 78 000 (one part correct)

ACTIVITY 3: DIY HARDWARE
3.1 Identify TWO items that Mabel has incorrectly entered in the Cash Budget.
Two items

  • Depreciation
  • Furniture bought on credit

3.2 Apart from the items above, name TWO other items in the Payments Section of the Cash Budget that would NOT appear in a Projected Income Statement.
Any two items
Expected responses:

  • Payment to creditors / Repayment of loan / Purchase of vehicle / Drawings Cash purchases of stock

3.3 Identify or calculate A and B. Indicate negative figures in brackets.

R35 350
B (R17 050)

3.4 Identify or calculate the missing figures C and D in the extract from the Cash Budget

 

C

160 000    x 100/133⅓      = 120 000;  120 000 x 50%      = R60 000

 

D

60 000    x 95%      = 57 000    any one part correct

3.5 Complete the Debtors’ Collection Schedule for February 2013.

 

Credit sales

February collections

December

R80 000

14 400

January

R64 000

32 000

February

R56 000

16 800

TOTAL operation  63 200

3.6 Calculate the % increase in salary and wages with effect from 1 February 2013.

  • 1 800 /15 000 x 100 = 12 %

3.7 Calculate interest on the fixed deposit for January 2013.

  • 42 000 x 7% / 12 = R245

3.8.1 Calculate delivery expenses for January 2013.

  • R160 000 x 8% = R12 800

3.8.2 John is of the opinion that the delivery service is costing him too much. Which TWO points should John consider before deciding whether or not to discontinue this service?
Two factors

  • Whether his competitors are offering the service or not.
  • What the reaction from his customers will be should he withdraw the service.
  • The possibility of charging customers for the delivery service.
  • The possibility of finding a cheaper delivery service.
  • The possibility of using his own vehicle instead of sub-contracting this service.

3.9 Explain what you would say to John about each item at the end of January 2013. Give ONE point of advice in each case.

  Comment   Advice 
Advertising   As he did not spend any money on Advertising, this will probably mean that he will not  achieve budgeted sales. Make sure that he utilises the advertising budget fully each month. (It is there for a purpose.)
Stationery He spent significantly more than the budgeted figure.  Ensure that there is no wastage of stationery. / Keep unused stationery secured. / Find a cheaper supplier.
Staff training He under-spent on the budget, which means that staff might not be interacting well with customers. He must consider that staff training affects the manner in which staff interact with customers. This leads to efficiency and goodwill.

3.10 Consider each of the options below and explain ONE other advantage and ONE disadvantage related to each option.

  Other Advantage   Diadvantage 
Option 1: Raise a new loan to be repaid over 36 months. The interest rate is 14% p.a..  He will own the assets and they could last longer  than five years if he takes good care of them. He has to pay interest of R1 750 per month + R4 167 per month to repay the loan.
Option 2: Hire (lease) the assets from IT Connect Ltd at R5 100 per month. He does not have to raise a loan. / He does not have to pay interest on the loan./ He will not have to pay repair costs. The lease charges are expensive, at R5 100 per month (R306 000 over the expected life span of five years.) / He never owns the assets and so continues to pay.
Option 3: Invite his friend James to become an equal partner in the business and to provide capital of R150 000. He will have the necessary funds to purchase the assets which will then belong to, the business / They will share the workload and their skills. He will have to share half his profits with his new partner.

ACTIVITY 4 :
4.1 Explain why:
4.1.1 Depreciation and bad debts will not appear in a Cash Budget.
Any valid explanation.

  • Non-cash items are not included in a cash budget.
  • A cash budget only includes cash receipts and cash payments. 

4.1.2 A cash budget is different from a Projected Income Statement.
Any valid explanation.

  • A cash budget includes receipts and payments and shows plans for cash management. It shows the surplus/ deficit and the bank balance.
  • The PIS shows income and expenses (including non-cash items) and projects the profit or loss per month (for the budget period).

4.2 KIT KAT DISTRIBUTORS LTD
4.2.1

MONTHS

CREDIT SALES

NOVEMBER

DECEMBER

September

180 000

32 400

 

October

186 000

55 800

33 480

November

195 000

92 625

58 500

December

210 000

 

99 750

Total collection from debtors  180 825 191 730

4.2.2 Calculate:

  1. Cash sales for December:
    210 000 X 40/60 = 140 000
  2. Rent income amount for November: 
    19 710 x 100/108 = 18 250
  3. Payments to creditors for November:
    186 000 x 100/60 = 310 000 
    310 000 x 100/125 = 248 000
    248 000 x 80% 
    = 198 400
  4. Salaries and wages for December: 
    180 600 - 35 600 - 35 600 
    = 109 400
  5. Loan instalment (including interest) for December:
                                           138 000 
    (13 625 - 1 625) + (150 000 - 12 000) x 13% x 1/12
           12 000                                1 495 (three marks) 
    = 13 495 

4.2.3 Comment on the internal controls for collection from debtors and payments to creditors. Provide TWO points.
Any TWO valid points.

  • Only 50% of the debtors comply with the credit terms.
  • The cash from debtors does not cover the payments to creditors every month.
  • 80% of stock is bought on credit. / Only 20% is cash purchase of stock.
  • As cash sales is a greater percentage of total sales, it may be wise to increase the percentage of cash purchases.
  • Taking advantage of short-term credit is only beneficial if it eases cash-flow problems.

6. Message to grade 12 learners from the writers

“Begin with the end in mind.”
Stephen Covey

At the end of your journey in the GET phase, you were required to choose a subject set that will shape your career path. Hopefully, your choice was based on your aptitude, ambition and desire
to become a successful individual, with a comfortable standard of living.
Let’s be frank! Accounting is not for the faint-hearted. There are NO short-cuts. Success in
Accounting demands hard work and dedication, but the rewards are satisfying.

The questions and topics covered in the examination papers are very predictable. You need
to just extract the NSC papers for the last three years from the internet and compare the questions. If you do this, you will become familiar with the commonly sked questions and the style and format of the paper. You will also gain insight into the different ways in which questions
can be asked.

Practice every day, do not be afraid to ask questions, engage in group studies and attend the
many intervention programmes organized by your school and your Department of Education.

Effective planning will ensure that you:

Know the rules of the game and play it better than others.
nelson mandela ukyga


 

7. Thank you

This Accounting module on the Analysis and Interpretation of financial information was developed by Mr P Govender, Mr A Leeuw, Mr M.P Shabalala, Mr Dorian Olifant and Ms ZJM Mampana (Subject Specialists, PED)
A special mention must be made of Mr Mzikaise Masango, the DBE curriculum specialist who, in addition to his contribution to the development of the guide, also coordinated and finalised the process.
These officials contributed their knowledge, experience and in some instances unpublished which they have gathered over the years to the development of this resource. The Department of Basic Education (DBE) gratefully acknowledges these officials for giving up their valuable time, families and expertise to develop this resource for the children of our country.
Administrative and logistical support was provided by Mr Noko Malope and Ms Vhuhwavho Magelegeda. These officials were instrumental in the smooth and efficient management of the logistical processes involved in this project. 

Look out for more modules that deal with other topics of the Grade 12 syllabus.