1. Mohr & Fourie: Chapter / Hoofstuk 3
Economics is the art of making the most out of life
– GB Shaw

2. Outcomes of 3.1-3.4 Uitkomstes van 3.1-3.4
 Explain and illustrate the 3 flows in the  Verduidelik en illustreer 3 vloeie in die
economy ekonomie
 Differentiate between stock and flow  Onderskei tussen voorraad- en
vloeiveranderlikes
variables
 Onderskei tussen firmas en
 Differentiate between firms and
huishoudings
households  Hoe is hulle aktiwiteite verbind (illustreer
 How are their activities linked (illustrate en verduidelik)?
and explain)?  Definieer 2 tipes markte
 Define 2 types of markets  Beskryf owerheidsektor, en
 Describe government sector and wisselwerking tussen owerheid,
interaction between government, huishoudings en firmas (illustreer en
households and firms (illustrate and verduidelik)
explain)  Begroting
 Budget  Verduidelik en illustreer wisselwerking
tussen buitelandse sektor en
 Explain and illustrate the interaction
binnelandse ekonomie
between foreign sector and domestic
economy

3. Introduction Inleiding
 Main participants:  Hoofdeelnemers:
Firms Firmas
Households Huishoudings
Government Owerheid
Foreign sector Buitelandse sektor
Financial sector Finansiële sektor

4. Introduction Inleiding
Markets: Markte:
Goods and services Goedere en dienste
Factors of production Produksiefaktore
Interdependence Onderlinge
afhanklikheid

5. 3.1 3.1
 Production  Produksie
 Firms produce goods creates  Firmas produseer goedere en
income to PF skep inkome vir PF
 Income  Inkome
 Income is spent it on goods &  Inkome word bestee op
services goedere & dienste
 Expenditure  Besteding
 Expenditure on goods and  Besteding op goedere en
services → income for firms, dienste → inkomste vir firmas,
which can produce goods again wat dan goedere kan produseer

6. 3 main flows 3 hoofvloeie
These 3 combine Die 3 vloeie verbind
economic activity. ekonomiese aktiwiteit.
TP = TE = TI TP = TB = TI

7. 3.1 3.1
 There are 3 main flows that  Daar is 3 hoofvloeie wat
link economic activity, what ekonomiese aktiwiteit
are flows? verbind, maar wat is vloeie?
 Flow – measured over time  Vloei – oor tydperk gemeet
 Voorbeeld?
period
 Example?
 Voorraad – op tydstip gemeet
 Stock – measured on moment  Voorbeeld?
 Example?

8. 3.1 3.1
 Apart from production, income  Buiten produksie, Wat en
2.4… inkome
and expenditure, the other besteding, is‘n mark?
is ruil die ander
Mark vir
economic activity that links the ekonomiese aktiwiteit wat
G+D
various sectors is exchange sektore aan mekaar verbind
 Exchange vir
Mark occurs in 2 markets:
 Ruil vind plaas in 2 markte:
 Goods market
Produksiefaktor  Goederemark
e
 Definition?  Definisie?
 Factor market  Faktormark
 Definition?  Definisie?
 3.2 → interdependence of  3.2 → onderlinge afhanklikheid
participants van deelnemers

9. 3.2 3.2
Households
 Definition?
 Consumers
 What is the role of a household in
the economy?
 Income
 Expenditure
 Summary p. 44
 Abbreviation: C
TB = C + I + G + X - Z

10. 3.1 3.2
Firms
 Definition?
 Producers
 What is the role of firms in the
economy?
 Income
 Expenditure
 Summary p. 46
 Abbreviation: I
TB = C + I + G + X - Z

11. 3.2 3.2
 2 markets?  2 markte?
 Combine firms, households  Kombineer firmas,
and 2 markets = interaction huishoudings en 2 markte =
 Goods and services circular wisselwerking
flow  Goedere-en-
 Start with households... dienstekringloop
 Income and expenditure  Begin by huishoudings...
circular flow  Inkome- en-
 Start with firms, opposite bestedingskringloop
direction!  Begin by firmas,
teenoorgestelde rigting!

14. 3.3 3.3
 Government  Owerheid
 Definition  Definisie
 Primary function?  Primêre funksie?
 What is the role of government  Wat is die rol van die owerheid
in the economy? in die ekonomie?
 Income (T)  Inkomste (T)
 Expenditure (G)  Besteding (G)
 Transfer payments  Oordragbetalings

15. 3.3 3.3
 Government  Owerheid
 Leakage  Lekkasie
 Withdrawal from the income flow  Ontrekking uit inkome kringloop
T T
 Injection  Inspuiting
 Adds in the income flow  Toevoeging in inkome kringloop
G G
 Abbreviation: G  Afkorting: G
TB = C + I + G + X - Z TB = C + I + G + X - Z

17. 3.4 3.4
 Foreign sector  Buitelandse sektor
 Definition?  Definisie?
 SA is an open economy  SA is ʼn oop ekonomie
 Transactions recorded in the  Transaksies aangeteken in
balance of payments betalingsbalans
 Box 3-4  Raam 3-4
 Classifications  Klassifikasies
 Developed (industrialised) and  Ontwikkelde (nywerheidslande) en
developing countries ontwikkelende lande
 World Bank income groups  Wêreldbank inkomstegroepe

18. High income (blue); Upper-middle income (green);
Lower-middle income (purple); Low income (red)

19. 3.4 3.4
 Foreign sector  Buitelandse sektor
 How does the foreign sector  Hoe neem die buitelandse
take part in the circular flow? sektor aan die kringloop deel?
 Export (X) and Import (Z)  Uitvoer (X) en Invoer (Z)
 Leakage?  Lekkasie?
 Withdrawal from the income flow  Ontrekking uit inkome kringloop
Z Z
 Injection?  Inspuiting?
 Adds to the income flow  Toevoeging in inkome kringloop
X X
 Abbreviation: X – Z  Afkorting: X – Z
Y=C+I+G+X-Z Y=C+I+G+X-Z

22. Homework Huiswerk
 Draw the income and spending  Teken die inkomste-en-
circular flow AND the goods and bestedingskringloop EN die
services circular flow in ONE goedere-en-dienstekringloop in
illustration EEN illustrasie
 Clearly show the direction of the  Dui duidelik die rigting van die vloeie
flows. aan.
 Question 1, 2 & 4 in textbook  Vraag 1, 2 & 4 in handboek

23. Next session Volgende sessie
 Sections 3.5 and 3.6  Afdelings 3.5 en 3.6
REMEMBER TO SUMMARISE ONTHOU OM JOU WERK
YOUR WORK USING THE VANUIT DIE HANDBOEK OP
TEXT BOOK! TE SOM!

24. Budget 2012 Begroting 2012
 Who is our Minister of Finance?  Wie is ons Minister van
 Highlights from the budget: Finansies?
 Economic growth  Hoogtepunte vanuit die
 Focus on employment creation begroting:
 Individuals  Ekonomiese groei
 Alcohol, cigarettes...  Fokus op werkskepping
 Petrol levy  Individue
 Infrastructure  Drank, sigarette...
 Roads, public transport  Brandstofheffing
 Protection of the environment  Infrastruktuur
 Paaie, openbare vervoer
 Omgewingsbeskerming