Grade 11 Economics Revision - Terms 3 & 4

Vocabulary flashcards created from the Grade 11 Economics Revision Booklet covering key economic concepts from Terms 3 and 4.

Wealth

All the accumulated physical and financial assets that enable households, firms, and the government to earn an income.

Income

The remuneration that is earned by the factors of production for participating in economic activities.

Savings

Income that is not spent, represented by the function $S = Y - C$.

Quintile relation

A measure of inequality calculated by dividing the percentage of income earned by the highest $20\%$ of the population by the percentage of income earned by the lowest $20\%$.

Lorenz-curve

A graphical representation of the quintile relation created by plotting cumulative income percentages against cumulative population percentages to show income inequality.

Gini-coefficient

A value between $0$ and $1$ derived from the Lorenz curve by dividing the area of inequality by the total area under the line of equal distribution.

North/South divide

An imaginary line indicating the divide between the richer, more developed countries of the North and the poorer, developing countries of the South.

Progressive personal income tax

A tax system where earners with a high income are taxed at higher tariffs or percentages.

Capital gains tax (CGT)

A wealth tax levied on the profit earned when capital goods like property and shares are sold.

Estate duties tax

A tax of $20\%$ payable on the estate of a deceased person whose net estate is more than $\text{R3.5 million}$.

Broad Based Black Economic Empowerment (BBBEE)

A South African legal framework established by an Act in 2003 to transform the economy by increasing black ownership, management, and control of business activities.

Land restitution

A policy aimed at restoring land to those who lost it because of race discriminative laws and practices after 19 June 1913.

Economic growth

The increase of the production of goods and services in a country over a year, measured and expressed in terms of real GDP.

Real GDP

The Gross Domestic Product calculated after general price increases (inflation) have been taken into account.

Productivity

The efficiency of one factor input in generating production output.

Economic development

An increase in real per capita GNI (GDP) that expands the capacity of the population to produce goods and services, focusing on improving standard of living.

Under-unemployment

A condition referring to people who work fewer hours than they are able to work.

Unemployment

A situation involving people who can work, want to work, and actively search for a job, but cannot find one.

Capital formation

The process occurring when a country increases its available capital stock.

Spatial Development Initiatives (SDIs)

Regional development programs targeting spatial areas with existing or potential infrastructure to promote specific business sectors.

Industrial Development Zones (IDZs)

Physically enclosed industrial areas directly linked to an international airport or port, established for specific export objectives.

Indigenous Knowledge Systems (IKS)

Local skills and knowledge essential for the survival, development, and problem-solving of rural communities.

South African Reserve Bank (SARB)

The central bank of South Africa, established in 1920 with the primary function to protect the rand.

Cash reserve requirement

The mandatory percentage of customer deposits that commercial banks must keep with the central bank instead of giving out as loans.

Monetary policy

Decisions taken by the SARB to influence interest rates and the supply of money or credit in the economy.

Repo rate

The interest rate charged by the central bank when lending to commercial banks, used as a monetary policy instrument.

Open market transactions

The buying or selling of government bonds by the SARB in the open market to regulate money supply in circulation.

Moral suasion

Persuasive appeals by the SARB to commercial banks asking them to voluntarily adjust their lending amounts.

Globalisation

The breakdown of trade barriers causing free movement of goods, services, labour, and capital between countries to form a world economy.

Foreign Direct Investment (FDI)

An investment where an entity in one country establishes a business operation in another country.

Brain drain

The migration of newly qualified graduates from developing nations to more developed countries in search of higher-paid jobs.