PROVINCIAL ASSESSMENT

GRADE 12

ECONOMICS
MARCH 2025

MARKS: 150

TIME: 2 hours

This question paper consists of 14 pages.

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Economics 2 Province/March 2025
Grade 12

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. Read the questions carefully.

5. Write the question number above each answer.

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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Economics 3 Province/March 2025
Grade 12

SECTION A

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 to 1.1.8) in the ANSWER BOOK, for example 1.1.9 B.

1.1.1 The GDP at the current year’s monetary value is also called …
GDP

A nominal
B expenditure
C real
D income

1.1.2 The indicator that changes direction before the economy

changes is known as …

A lagging
B leading
C composite
D coincident

1.1.3 Parks, beaches and toll gates are examples of … goods

A accessible
B community
C collective
D general

1.1.4 An increase in the number of South African tourists visiting a

foreign country may lead to a/an … of the rand.

A appreciation
B revaluation
C devaluation
D depreciation

1.1.5 An open economy is best described as a … sector economy.

A two
B one
C three
D four

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Economics 4 Province/March 2025
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1.1.6 … rule states that public debt and guarantees should not exceed
60% of nominal GDP.

A Borrowing
B Public
C Debt
D Deficit

1.1.7 An amount that accounts for statistical errors and ensures that
the current and capital accounts sum to zero is known as the …

A balancing item
B balance of exports
C balance of trade
D terms of trade

1.1.8 The decrease in the value of capital goods over time is known
as …

A dumping
B depreciation
C deregulation
D devaluation (8 x 2) (16)

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Economics 5 Province/March 2025
Grade 12

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 Downswing A set of international
guidelines to provide
information about economic
analysis and formulation of
macroeconomic policy
1.2.2 Parastatals B the ratio of the index of
export prices to the import
prices
1.2.3 Reserve assets C inflation and unemployment
have a stable and inverse
relationship
1.2.4 Systems of national accounts D the contraction period of the
business cycle
1.2.5 Marginal propensity to consume E state owned enterprises
established with the aim of
making profit
1.2.6 Nationalisation F the state takes ownership of
natural resources and
strategic industries in the
economy
1.2.7 Phillips curve G deliberate action by the
central bank to increase the
value of the currency
1.2.8 Revaluation H as disposable income
increases, an increase in
personal consumer
spending occurs
I financial capital held by the
monetary authorities to
finance the trading
disequilibrium
(8 X 1) (8)

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Economics 6 Province/March 2025
Grade 12

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 lowest turning point of the business cycle. (1)

1.3.2 The writing off a portion of one or more loans. (1)

1.3.3 The interest rate at which the Reserve Bank lends money to
other banks. (1)

1.3.4 A form of credit from the International Monetary Fund. (1)

1.3.5 Various indicators of the same type are compiled into a single
index. (1)

1.3.6 The price of one country’s currency in terms of another. (6 x 1) (6)

TOTAL SECTION A: 30

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Economics 7 Province/March 2025
Grade 12

SECTION B

Answer any TWO of the THREE questions in this section in the ANSWER BOOK.

QUESTION 2

2.1 Answer the following questions

2.1.1 Name any TWO sources of state revenue. (2 x 1) (2)

2.1.2 Why are subsidies on products subtracted when converting

gross domestic product at basic prices to gross domestic
product at market prices? (1 x 2) (2)

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

[Source: economics.stackexchange.com]

2.2.1 Which phenomenon is depicted by the graph above? (1)

2.2.2 Identify a leakage that relates to the rest of world from the
diagram above. (1)

2.2.3 Briefly describe the term open economy. (2)

2.2.4 What is the difference between the multiplier and the multiplier
effect? (2)

2.2.5 Briefly explain the economy in equilibrium. (4)

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Economics 8 Province/March 2025
Grade 12

2.3 Study the picture below and answer the question that follow.

Source: BusinessDay20260311

2.3.1 What was the reason for the 2025/26 budget speech to be
postponed? (1)

2.3.2 Who approves the budget in South Africa? (1)

2.3.3 Briefly describe the term macroeconomic objectives. (2)

2.3.4 How does infrastructural spending contribute to South Africa’s

economic growth? (2)

2.3.5 Explain how vulnerable households are protected by the 2025/26

national budget. (4)

2.4 Compare Monetarist explanations to the Keynesian explanations. (8)

2.5 Discuss the impact of exchange rate on the South African exports. (8)

[40]

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Economics 9 Province/March 2025
Grade 12

QUESTION 3

3.1 Answer the following questions.

3.1.1 List any TWO effects of international trade. (2 x 1) (2)

3.1.2 Why is extrapolation important in the forecasting of the business

cycle? (1 x 2) (2)

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

Source:googlepictures

3.2.1 Name ONE policy in which the new economic paradigm is

embedded. (1)

3.2.2 Identify the new equilibrium where supply responds to the

increase in demand. (1)

3.2.3 Briefly describe the term new economic paradigm. (2)

3.2.4 How can human resources stimulate aggregate supply? (2)

3.2.5 With reference to the graph above, explain the effect of the
policies on the general price level and real output. (4)

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Economics 10 Province/March 2025
Grade 12

3.3 Study the extract below and answer the question that follow.
WHY DO COUNTRIES TRADE?
Today, international trade is at the heart of the global economy and is
responsible for much development and prosperity of the modern
industrialised world. Countries trade with each other when they do not
have the resources, or capacity to satisfy their own needs and wants. By
exploiting their domestic scarce natural resources, countries can produce
a surplus and trade this for the resources they need. Faced by large
global markets, firms may be encouraged to adopt mass production and
apply technology.

3.3.1 Identify the supply reason for international trade addressed

by the extract above. (1)

3.3.2 Give any ONE demand reason for international trade. (1)

3.3.3 Briefly describe the term international trade. (2)

3.3.4 What is comparative advantage in economics? (2)

3.3.5 Explain the impact of the deterioration of terms of trade on

the economy. (4)

3.4 Briefly discuss Economic growth and Full employment as

macro-economic objectives of the state. (8)

3.5 With the aid of a well labelled graph, explain the multiplier. (8)

[40]

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Economics 11 Province/March 2025
Grade 12

QUESTION 4

4.1 Answer the following questions.

4.1.1 Give any TWO examples of the coincident indicator. (2 x 1) (2)

4.1.2 How do economies of scale promote international trade. (1 x 2) (2)

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

Source:www.economicsonline.co.uk

4.2.1 List ONE fiscal policy instrument depicted in the graph above. (1)

4.2.2 What is the aim of the fiscal policy in the graph above? (1)

4.2.3 Briefly describe the term business cycle. (2)

4.2.4 How can the government use taxes and government spending during the
expansion period? (2)

4.2.5 Why do economists use moving averages in their analysis of economic

trends? (4)

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Economics 12 Province/March 2025
Grade 12

4.3 Study the extract below and answer the question that follow.

South Africa posted a trade gap of ZAR 16.4 billion in January 2025, compared to a
downwardly revised ZAR 14.7 billion in the prior month, marking the first monthly trade
shortfall in a year and the steepest since January 2023. Imports jumped by 14.4% over a
month to an over one-year high of ZAR 165.4 billion, boosted by a 68% rise in purchases
of original equipment components. Imports also increased for vehicles & transport
equipment (+24%), chemical products (+19%) and machinery & electronics (+14%), but
fell for mineral products (-12%).

4.3.1 Mention ONE reason for the trade gap in January 2025. (1)

4.3.2 Name the item that is listed separately and not included in the merchandise
exports. (1)

4.3.3 Briefly describe the term balance of payments. (2)

4.3.4 How does export-led economic growth improve the Balance of Payments
disequilibria? (2)

4.3.5 What is the impact of the positive balance of the Current Account on the
South African economy? (4)

4.4 Outline the types of business cycle. (8)

4.5 Analyse the impact of devaluation of the rand in the economy. (8)

[40]
TOTAL SECTION B: 80

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Economics 13 Province/March 2025
Grade 12

SECTION C

Answer any ONE of the TWO questions in the section in the ANSWER BOOK.
Your answer will be assessed as follows:

STRUCTURE OF ESSAY MARK

ALLOCATION
Introduction Max. 2
The introduction is a lower-order response.
• A good starting point would be to define the main concept
related to the question topic.
• Do not include any part of the question in your
introduction.
• Do not repeat any part of the introduction in the body.
• Avoid saying in the introduction what you are going to
discuss in the body.
Main part: Max. 26
Discuss in detail/In-depth discussion/Examine/Critically
discuss/Analyse/Compare/Evaluate/Distinguish/Differentiate/
Explain

Additional part: Max. 10

Give own opinion/Critically discuss/ Evaluate/ 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/How/Suggest
Conclusion Max. 2
Any higher-order conclusion should include:
• A brief summary of what has been discussed without
repeating facts already mentioned
• Any opinion or value judgement on the facts discussed
• Additional support information to strengthen the
discussion/ analysis
• A contradictory viewpoint with motivation, if required
• Recommendations
TOTAL 40

QUESTION 5: MACRO ECONOMICS 40 MARKS

• Discuss in detail the markets in the FOUR-SECTOR model. (26)

• What are the benefits of using the systems of national accounts? (10)

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Economics 14 Province/March 2025
Grade 12

QUESTION 6: MACRO ECONOMICS 40 MARKS

• Discuss in detail the reasons for public sector failure and link the
reasons to the typical problems experienced through public sector
provisioning. (26)
• How does inefficiency result in public sector failure in South Africa? (10)

TOTAL SECTION C: 40
GRAND TOTAL: 150

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