GRAAD 12

NATIONAL
SENIOR CERTIFICATE

GRADE 12

ECONOMICS P1

FEBRUARY/MARCH 2015

MARKS: 150

TIME: 1½ hours

This question paper consists of 12 pages.

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INSTRUCTIONS AND INFORMATION

1. Answer FOUR questions as follows in the ANSWER BOOK:

SECTION A: COMPULSORY
SECTION B: Answer TWO of the three questions.
SECTION C: Answer ONE of the two questions.

2. Answer only the required number of questions. Answers in excess of the

required number will NOT be marked.

3. Number the answers correctly according to the numbering system used in this
question paper.

4. Write the question number above each answer.

5. Read the questions carefully.

6. Start EACH question on a NEW page.

7. Leave 2–3 lines between subsections of questions.

8. Answer the questions in full sentences and ensure that the format, content
and context of your responses comply with the cognitive requirements of the
questions.

9. Use only black or blue ink.

10. You may use a non-programmable pocket calculator.

11. Write neatly and legibly.

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SECTION A (COMPULSORY)

QUESTION 1 30 MARKS – 15 MINUTES

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

1.1.1 The method used to derive total remuneration on factors of

production is called the … method.

A production
B income
C expenditure

1.1.2 In business cycles, estimating something unknown from

information that is known is called …

A amplitude.
B extrapolation.
C trend.

1.1.3 South African Defence Force services is provided by ...

government.

A central
B local
C provincial

1.1.4 The purchasing or selling of equities forms part of … investments

in the balance of payments.

A portfolio
B direct
C other

1.1.5 Negative economic growth for at least two consecutive quarters of

the year is known as a …

A boom.
B depression.
C recession.

1.1.6 The state aims towards a more equal distribution of income by

using a … personal income tax system.

A proportional
B regressive
C progressive

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1.1.7 When a country's total imports exceeds its total exports it is

referred to as a … on the trade balance.

A surplus
B deficit
C equilibrium

1.1.8 With globalisation countries become economically more …

A interdependent.
B independent.
C isolated. (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
1.2.1 Direct subsidies A probable number of years a person will
live after birth
1.2.2 Life expectancy
B offers opportunities for borrowing and
1.2.3 Balance of payments saving

1.2.4 Urbanisation C government estimates of income and

expenditure for a three-year period
1.2.5 Financial market
D the peak of a business cycle
1.2.6 Prosperity
E movement of people from rural areas to
1.2.7 Free trade cities and towns

1.2.8 Medium-term F a statement of a country's transactions

expenditure with the rest of the world
framework (MTEF)
G producers and consumers can buy and
sell goods and services anywhere in the
world

H financial grants to support the production

of export goods

I a market for goods and services

(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 number (1.3.1–1.3.6) in the ANSWER BOOK.

1.3.1 The deliberate decrease in the value of a country's currency

1.3.2 Education and health services supplied by government

1.3.3 A model which illustrates the flows between participants in the

economy

1.3.4 The largest contributor to government revenue

1.3.5 The policy implemented in 1994 in South Africa to redress

inequalities of the past

1.3.6 The institution in South Africa responsible for monetary policy

(6 x 1) (6)

TOTAL SECTION A: 30

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SECTION B

Answer TWO of the three questions in this section in the ANSWER BOOK.

QUESTION 2: MACROECONOMICS 40 MARKS – 20 MINUTES

2.1 Answer the following questions.

2.1.1 Give TWO examples of non-durable goods. (2 x 1) (2)

2.1.2 Why is the exchange market important to tourists? (1 x 2) (2)

2.2 Study the diagram below and answer the questions that follow.

Flows of factor S = R100 million

A Leakages
incomes, for
example wages,
rent, interest and Consumption
profits that arise of goods and
R2 000 m R2 000 m
from the services
production of
goods and B
services. Injections I = R120 million

NOTE:
mpc = 0,75

2.2.1 Provide the diagram above with an appropriate heading. (1)

2.2.2 Give any other injection besides investment. (1)

2.2.3 Identify A and B in the diagram above. (2)

2.2.4 How will national income be influenced by the above leakages and
injections? (2)

2.2.5 Calculate the change in national income caused by the investment

above. Show ALL calculations. (4)

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2.3 Study the table below and answer the questions that follow.

SOUTH AFRICA'S CURRENT ACCOUNT IN THE BALANCE OF PAYMENTS

2010–2012
CURRENT ACCOUNT R BILLIONS
2010 2011 2012
Merchandise exports 597 714 743
Net gold exports 59 75 71
Less: Merchandise imports 607 742 854
Trade balance 49 47 -40
Net service, income and current transfer payments -102 -115 -125
Balance on the current account -53 -68 -165
[Adapted from the Quarterly Bulletin SARB, December 2013]

2.3.1 Describe the trend in the balance on the current account from
2010 to 2012. (2)

2.3.2 Describe the term trade balance. (2)

2.3.3 Why is gold exports listed as a separate item on the current

account? (2)

2.3.4 How can the government use our currency to improve the trade
balance of 2012? (2 x 2) (4)

2.4 Discuss specialisation and economies of scale as arguments in favour of

free trade. (2 x 4) (8)

2.5 Why is it necessary to protect developing countries against unfair overseas

competition? (2 x 4) (8)
[40]

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QUESTION 3: ECONOMIC PURSUITS 40 MARKS – 20 MINUTES

3.1 Answer the following questions.

3.1.1 Name TWO social indicators. (2 x 1) (2)

3.1.2 Why does the Monetary Policy Committee of the South African
Reserve Bank meet every two months? (1 x 2) (2)

3.2 Study the extract below and answer the questions that follow.

THE NATIONAL DEVELOPMENT PLAN (NDP)

The NDP needs South Africans to stop pointing fingers at 'wrongdoers' and
instead help the vision take shape. The NDP would be implemented but the
private sector and citizens must take part in the process.

The government had done a good job of providing citizens with access to
health care and education. According to the minister of finance the state's
role in the implementation of the NDP was not an intrusive one; rather it was
one that would set up the framework for the private sector to function.

[Source: The Star, Business Report, 20 November 2013]

3.2.1 What is the state's role in the implementation of the NDP? (2)

3.2.2 Discuss TWO positive elements of the NDP. (2 x 2) (4)

3.2.3 Does the government provide quality education? Motivate your

response. (2 x 2) (4)

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3.3 Study the cartoon below and answer the questions that follow.

[Adapted from The Star, Business Report, October 2013]

3.3.1 Name any benefit of Black Economic Empowerment for the

economy of South Africa. (2)

3.3.2 Define the concept broad-based black economic empowerment. (2)

3.3.3 What is the message depicted in the cartoon? (2)

3.3.4 In your opinion, has the BEE policy benefited the black people of
South Africa? (4)

3.4 Distinguish between industrial development zones and special economic

zones. (2 x 4) (8)

3.5 Discuss how the Small and Medium Enterprise Development Programme
(SMEDP) and the Foreign Investment Grant (FIG) help to improve industrial
development in South Africa. (2 x 4) (8)
[40]

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QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS

40 MARKS – 20 MINUTES

4.1 Answer the following questions.

4.1.1 State any TWO methods to calculate national account aggregates.

(2 x 1) (2)

4.1.2 Why is the gross national product of South Africa generally lower
than the gross domestic product? (1 x 2) (2)

4.2 Study the cartoon below and answer the questions that follow.

[Source: Business Times, 2 March 2014]

4.2.1 What message is depicted in the cartoon above? (2)

4.2.2 Give ONE example of a tax incentive. (2)

4.2.3 Explain the meaning of personal income tax relief. (2)

4.2.4 Which part of the population will benefit the most from personal
income tax relief? Motivate your answer. (4)

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4.3 Study the graph below and answer the questions that follow.

REGIONAL INDUSTRIAL DEVELOPMENT

GDP CONTRIBUTION PER PROVINCE: 2012

SA -
Performance
Level

[Adapted from StatsSA, September 2013]

4.3.1 Which province made the highest contribution to the South African
economy in 2012? (2)

4.3.2 Define the concept regional industrial development. (2)

4.3.3 What is the average GDP growth rate for South Africa? (2)

4.3.4 What do you think should the government do to promote industrial

development in underperforming provinces? (4)

4.4 Discuss the monetary policy instruments used in stabilising the economy.
(4 x 2) (8)

4.5 Assess how an increase in import prices and an increase in export prices
(terms of trade) will affect the South African economy. (2 x 4) (8)
[40]

TOTAL SECTION B: 80

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SECTION C

Answer any ONE of the two questions in this section in the ANSWER BOOK.

Your answer will be assessed as follows:

STRUCTURE OF THE ESSAY MARK ALLOCATION

Introduction Max. 2
Body:
Main part: Discuss in detail/In-depth discussion/Examine/ Max. 26
Critically discuss/Analyse/Compare/Evaluate/Distinguish/
Explain/Assess/Debate

Additional part: Give own opinion/Critically discuss/Evaluate/ Max. 10

Critically evaluate/Draw a graph and explain/Use the graph given
and explain/Complete the given graph/Calculate/Deduce/
Compare/Explain/Distinguish/Interpret/Briefly debate
Conclusion Max. 2
TOTAL 40

QUESTION 5: MACROECONOMICS 40 MARKS – 35 MINUTES

The government's primary aim with business cycle policies is to achieve the best
possible growth rates.

• Discuss the demand-and-supply-side policies used by the government to smooth

out business cycles. (26)
• Use a well labelled graph to explain the effects of demand-and-supply-side
policies on prices. (10)
[40]

QUESTION 6: ECONOMIC PURSUITS 40 MARKS – 35 MINUTES

Economic indicators are used to determine the performance of the economy.

• Analyse in detail the following economic indicators:

- Inflation rate
- Employment (26)
• In your opinion, why is it important for the government to consider assessing the
performance of the economy from time to time? (10)
[40]

TOTAL SECTION C: 40
GRAND TOTAL: 150

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