ECONOMICS PAPER 1

GRADE 12

MULTIPLE CHOICE, MATCHING AND GIVE WORD

MACROECONOMICS AND ECONOMIC PURSUIT

QUESTIONS

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SECTION A (COMPULSORY) 30 MARKS – 20 MINUTES

QUESTION 1

1.1 Various options are provided as possible answers to the following

questions. Choose the answer and write only the letter (A–D) next to the
question number (1.1.1–1.1.8) in the ANSWER BOOK, for example
1.1.9 D.

1.1.1 Short term savings and loans are part of the … market.

A factor

B foreign exchange
C money
D capital

1.1.2 The … curve illustrates a trade-off between employment and

inflation.

A Laffer
B Lorenz
C Production possibility
D Phillips

1.1.3 The balance on the Financial Accounts in the Balance of Payment

(BOP) excludes …

A reserve assets.
B net financial derivatives.
C net portfolio investments.
D net other investments.

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1.1.4 The consumption expenditure of households and income of
producers is regarded as … flow.

A money
B real
C circular
D capital

1.1.5 The consultation of the South African Reserve Bank (SARB) to

convince banks to act in a manner that is desirable, is known
as …

A interest rates.
B moral suasion.
C cash reserve requirement.
D open market transaction.

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1.1.6 A development policy that works with the Sectoral Education
Training Authority (SETA) is …

A Export Processing Zones.

B Joint Initiative on Priority Skills Acquisition.
C Reconstruction and Development Programme.
D Expanded Public Works Programme.

1.1.7 The Department of Trade and Industry implemented … to assist

industries to grow by identifying certain cross cutting issues and
competitive input sectors.

A Spatial Development Initiative

B Special Economic Zones
C Strategic integrated Projects
D Integrated Manufacturing Strategy

1.1.8 Depreciation of capital as a method used to encourage investment is

known as capital ...

A widening.
B deepening.
C formation.
D growth. (8 x 2) (16)

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1.2 Choose a description from COLUMN B that matches an item in
COLUMN A. Write only the correct letter (A−I) next to the question number
(1.2.1−1.2.8) in the ANSWER BOOK, for example 1.2.9 K.

COLUMN A COLUMN B

1.2.1 Expenditure method A complete ban or embargo on certain goods

from a certain country

1.2.2 Real business cycle B a passage way allowing access from one
area to another

1.2.3 Physical control C developed a new support programme for

clothing and textiles

1.2.4 Absolute advantage D minister of finance informs parliament of

any changes that have occurred since
february

1.2.5 Corridor E important social indicator

1.2.6 Industrial Policy Action F obtained when the effects of irregular

Plan events and seasons are removed from time
series data

1.2.7 Medium Term Budget G S+T+M

Policy Statement

1.2.8 Child malnutrition H C+G+I+(X-M)

I one country can produce goods and

services cheaper than another

(8 x 1) (8)

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1.3 Give ONE term/word for each of the following descriptions. Write only the
term/word next to the question number (1.3.1–1.3.6).
Abbreviation, acronyms and examples will NOT be accepted.

1.3.1 A view that explains that disequilibrium in markets are caused by incorrect
use of policies

1.3.2 The main source of government revenue

1.3.3 Money received without any productive service rendered

1.3.4 Increase in population numbers of cities and towns

1.3.5 The rate at which SARB lends money to banks for short periods

1.3.6 The return of land to those that have lost it due to discriminatory (6)
laws in the past. (6 x 1)

TOTAL SECTION A: 30

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SECTION A (COMPULSORY)

QUESTION 1 30 MARKS – 20 MINUTES

1.1 Various options are provided as possible answers to the following questions.
Write down the question number (1.1.1–1.1.8), choose the answer and write the
letter (A–D) of your choice next to the question number in the ANSWER BOOK.

1.1.1 It refers to the transfer of functions, activities and ownership of the

private sector to the public sector.
A Regulation
B Nationalisation
C Deregulation
D Privatisation
1.1.2 A comprehensive and systematic record of all transactions between
a specific country with other countries of the world, over a year.

A International trade
Business cycle
B
Balance of Payments
C Economic growth

1.1.3 Which one of the following can cause a surplus on the balance of
payments?

A Inward foreign investment

B Increase in mineral imports
C Decrease in foreign exchange reserves
D Decrease in mineral exports

1.1.4 This is a deliberate action by the central bank to reduce a fixed exchange rate.

A Appreciation
Devaluation
B
Depreciation
Revaluation

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 C
D

1.1.5 SARB can enter into discussions with banks to limit credit and to increase
cooperation to fight inflation.

A Exchange rate control

Open market transactions
B
Interest rate control
C Moral persuasion

1.1.6 Social grants to the citizens of South Africa form part of the ... policy.

A monetary
growth
B
trade
C fiscal
D
1.1.7 Social indicators are also known as ... indicators.

A production
B human development
C unemployment
D interest rate

1.1.8 A reduction in the repo rate can be seen as a ... approach to

economic growth.

A demand side
B bank
C fiscal
D value-added (8 × 2) (16)

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1.2 Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A–I) next to the question number (1.2.1–1.2.8) in the
ANSWER BOOK, for example 1.2.9 J.

COLUMN A COLUMN B

1.2.1 Monetary policy A The total value of all final goods and services
produced by the permanent residents of a
country in a specific period
1.2.2 Injections

Rate at which the SARB lends money to

1.2.3 GNP B commercial banks

1.2.4 Business cycle Geographically enclosed area identified for the

development of specific economic activities
C
1.2.5 Special Economic
Zone A Free Trade Area through agreements between
certain countries

Economic indicators
1.2.6 D Changes in interest rates and money supply to
achieve economic and social goals
Trade liberalisation

1.2.7 E The inflow of money into the economic cycle

Repurchase rate

1.2.8 Successive periods of economic activity and how

it increases and decreases
F

Statistics showing general trends in the economy

G

Removal of trade barriers

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I

(8 × 1) (8)

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1.3 Give ONE term for each of the following descriptions. Write only the term
next to the question number (1.3.1–1.3.6) in the ANSWER BOOK.
Abbreviations, acronyms and examples will NOT be accepted.

1.3.1 A small initial increase in spending leads to a proportionally larger

increase in aggregate income

1.3.2 A system where the value of a currency in terms of another is determined

by market forces

1.3.3 A market where labour can be bought or sold

1.3.4 The number of children who die before the age of one

1.3.5 Industrial estates that are physically enclosed and near to a harbour or
airport

1.3.6 Efforts by governments to move manufacturing and other

businesses from metropolitan areas to rural areas (6)

(6 × 1)

TOTAL SECTION A: 30

SECTION A: COMPULSORY
QUESTION 1 30 MARKS – 20 MINUTES

1.1 Various options are provided as possible answers to the following questions. Choose
the correct answer and write only the letter (A – D) next to the question number (1.1.1
– 1.1.8) in the ANSWER BOOK.

1.1.1 The ‘multiplier effect’ refers to how an initial increase in investment,

government spending or exports leads to a larger increase in the level of
aggregate …

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 A income.

B prices.

C interest rates.

D unemployment.

1.1.2 The concept used to analyse the changes in a series of data over a certain time
period is called …

A trends.

B moving average.

C composite indicators.

D amplitude.

1.1.3 The Medium Term Expenditure Framework (MTEF) indicates the government
expenditure and revenue projection for a period of … year/s.

A one

B two

C three

D four

1.1.4 If the exchange rate changed from $1 = R6 to $1 = R8, due to market forces then …

A the $ depreciated against the R.

B the R depreciated against the $.

C the R devalued against the $.

D the $ devalued against the R.

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1.1.5 An international benchmark using health, level of education and income level per
capita, to compare economic development in countries is called …

A the Human Development Index.

B the Gross National Income per capita.

C the North-South divide.

D millennium goals.

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 1.1.6 The Industrial Development Zone (IDZ), which is found in the Eastern Cape and
focuses on motor vehicle manufacturing for export is called the … IDZ.

A Richards Bay

B OR Tambo International Airport

C Saldanha

D Coega

1.1.7 Data collected, which relates to the composition of the population of a country is
called …

A statistics.

B affirmative action.

C demographics.

D education.

1.1.8 In South Africa, most of the physical infrastructure such as transport,

communication and energy is controlled by …

A the economy.

B private investors.

C the Johannesburg Securities Exchange (JSE).

D the government. (8 x 2) (16)

1.2 Choose a description from COLUMN B that matches an item in COLUMN A. Write only the
letter (A – I) next to the question number (1.2.1 – 1.2.8) in the ANSWER BOOK.

COLUMN A COLUMN B

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1.2.1 Gross Domestic Income A Commercial banks pay to borrow money from the
Reserve Bank.

Trade liberalisation
The total remuneration received by the factors of
1.2.2 B
production for producing final goods and services within
Expansionary policy the borders of a country

1.2.3

Free-floating It is measured by Real GDP divided by the number of

workers.
1.2.4 exchange rate C

The purpose is to expand production in value-added

Industrial Policy Action sectors with the focus on metals fabrication and green
Plan (IPAP) and energy-saving industries.
1.2.5 D

Expanded Public Works The abolishment of government intervention in

Programme international trade
1.2.6

1.2.7 Repo rate F A nation-wide government intervention to create

employment using labour-intensive methods

1.2.8 Life expectancy

Government decreases taxes and increases
government spending.
G

The probable number of years a person will live after

birth

H
The value of a currency is controlled by market forces.
(8 x 1)

I (8)

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1.3 Give ONE term for each of the following descriptions. Write ONLY the term next to the
question number (1.3.1 – 1.3.6) in the ANSWER BOOK. Abbreviations and acronyms
will NOT be accepted.

1.3.1 Spending by firms on capital goods

1.3.2 When government expenditure is greater than government income

1.3.3 The protocol or organisation which aims to accelerate the process of integration of
African countries on the continent.

1.3.4 Spatial areas that offer particular advantages to mining, manufacturing, tourism and
other businesses

1.3.5 The government department which publishes a scorecard that is used to measure
the empowerment and transformation progress of business and industries

1.3.6 This index (indicator) removes the effect of inflation so that the real GDP is (6)
indicated. (6 x 1)

TOTAL SECTION A: 30

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SECTION A: COMPULSORY

QUESTION 1 30 MARKS – 20 MINUTES

1.1 Various options are provided as possible answers to the following questions.
Choose the correct answer and write only the letter (A-D) next to the question
number (1.1.1 – 1.1.8) in the ANSWER BOOK, for example 1.1.9. D.

1.1.1 A sum of taxes, imports and savings in the circular flow is called …

A investments.
B injections.
C leakages
D capital

1.1.2 Taxation and government spending are instruments of the … policy.

A national
B fiscal
C monetary
D bank

1.1.3 Public goods which are impossible to exclude people from using them
are
referred to as ... goods.

A private
B collective
C demerit
D community

1.1.4 The deficit can be settled by using … in the balance of payments.

A Current accounts
B Bank accounts
C Special Drawing Rights
D Savings accounts

1.1.5 Demand side policy may be implemented through … to improve the

economic growth.

A human resource
B capital formation

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C entrepreneurship
D increasing exports

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1.1.6 The industrial policy that is aimed at focusing economic
development in specific areas is called ...

A centralisation
B integrated
C international
D decentralisation

1.1.7 A measure of prices of goods that influence the cost of living is

called …

A Producer Price Index.

B Economic growth
C relative prices
D Consumer Price Index

1.1.8 The transfer of functions and ownership of entities from private

sector to the public sector is referred to as ...

A nationalisation
B private-public partnership.
C privatisation.
D parastatals (8 x 2) (16)

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 1.2 Choose a description from COLUMN B that matches the item in COLUMN A.
Write only the letter (A – I) next to the question numbers (1.2.1. to 1.2.8) in the
ANSWER BOOK.

COLUMN A COLUMN B
1.2.1 Gross fixed A Data that is used to show the behaviour of one or
capital other variable
formation
B A course of action decided by the government to
1.2.2 Exogenous achieve goals of the country
explanation
C The process that involves large amounts of human
1.2.3 Parastatals resources and few other inputs.

1.2.4 Embargo D Changes in the spending patterns of consumers.

E Expenditure on assets used repeatedly in the

1.2.5 Economic process of production.
policies
F An official state ban on trade or other activities with
1.2.6 Industrial Policy a country.
Action Plan
G Developed to fast-track industrialisation to address
1.2.7 Economic shortcomings in the manufacturing sector.
indicators
H Created by government to undertake commercial
1.2.8 Labour activities on its behalf to provide public goods and
intensive services.
industry
I The independent factors that can influence
business cycles and originate outside the economy. (8 x 1) (8)

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1.3 Give ONE term for EACH of the following descriptions. Write only the term next
to the question numbers (1.3.1 to 1.3.6) in the ANSWER BOOK. Abbreviations,
acronyms and examples WILL NOT be accepted.

1.3.1 The initial value in production of final goods before taxes and subsidies
are considered.

1.3.2 The highest point in a business cycle when economic activities are on
a maximum level.

1.3.3 Goods which are deemed to be socially harmful.

1.3.4 The strategy that focuses on improvement in the manufacturing sector.

1.3.5 Infrastructure and investment that improves the overall welfare

of the society like education and healthcare.

1.3.6 The economic indicator that provides information on price stability

and the value of currency. (6 x 1) (6)

TOTAL SECTION A: [30]

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