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NATIONAL
SENIOR CERTIFICATE

GRADE 12

ECONOMICS P1

NOVEMBER 2023

MARKS: 150

TIME: 2 hours

This question paper consists of 13 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 – 20 MINUTES

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
numbers (1.1.1 to 1.1.8) in the ANSWER BOOK, e.g. 1.1.9 D.

1.1.1 A deliberate action by the government to increase the value of a

currency is known as …

A revaluation.
B appreciation.
C devaluation.
D depreciation.

1.1.2 Business cycles that last from 7 to 11 years, caused by changes in

net investments, are known as … cycles.

A Kuznets
B Kondratieff
C Jugler
D Kitchin

1.1.3 The relationship between the tax rate and the tax revenue for the
government is illustrated by the … curve.

A Phillips
B Laffer
C Lorenz
D Indifference

1.1.4 If the value of the marginal propensity to consume (MPC) is 0,6,

the value of the marginal propensity to save (MPS) will be …

A 0,4.
B 0,75.
C 1,67.
D 2,5.

1.1.5 A limit on the quantity of goods and services that can be purchased
from other countries is known as import …

A tariff.
B incentive.
C levy.
D quota.

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1.1.6 A growth and development strategy that was intended to halve

unemployment and poverty by 2014 was known as …

A Reconstruction and Development Policy.

B Accelerated and Shared Growth Initiative for South Africa.
C Growth, Employment and Redistribution Programme.
D National Skills Development Strategy.

1.1.7 The government's broad approach to industrialisation is set out in

the …

A Industrial Policy Action Plan.

B Strategic Integrated Projects.
C Skills Support Programme.
D National Industrial Policy Framework.

1.1.8 The increase in the population of cities and towns through the
movement of people from rural areas is known as …

A immigration.
B migration.
C urbanisation.
D emigration. (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, e.g. 1.2.9 J.

COLUMN A COLUMN B
1.2.1 Autonomous A an economic indicator that relates to
consumption the cost of living

1.2.2 Monetarist approach B when an organisation or a country is

released from its obligation to repay a
1.2.3 Accountability loan

1.2.4 Debt forgiveness C cooperation between countries to

adopt common monetary and fiscal
1.2.5 Economic union policies

1.2.6 Capital formation D focuses on using science and

technology to promote industrialisation
1.2.7 National Research and
Development Strategy E maintains the view that markets are
inherently unstable
1.2.8 Consumer price index
F the requirement to give an explanation
of one's own decisions and actions

G maintains the view that markets are

inherently stable

H part of household spending that is

independent of the level of income

I the process of adding new assets,

such as machinery and equipment, to
the existing stock
(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 withdrawal of money from the circular flow

1.3.2 A summary of the various indicators of the same type into a single
value

1.3.3 The exchange rate is determined by market forces with intervention

by the central bank

1.3.4 The increase in the capacity of the economy to produce more

goods and services

1.3.5 The processing of natural resources into finished products

1.3.6 The lowest interest rate charged by commercial banks to their best
clients (6 x 1) (6)

TOTAL SECTION A: 30

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SECTION B

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

QUESTION 2: MACROECONOMICS 40 MARKS – 30 MINUTES

2.1 Answer the following questions.

2.1.1 Name any TWO factors of production. (2 x 1) (2)

2.1.2 Why is the inflation rate high during the prosperity phase of a
business cycle? (1 x 2) (2)

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

SOUTH AFRICA'S TRADE BALANCE

2 000 000
1 800 000
R million

1 600 000
1 400 000
1 200 000
1 000 000
800 000
600 000
400 000
200 000
0
2018 2019 2020 2021
Exports Imports Trade balance
trade balance Year

[Adapted from SARB Quarterly Bulletin, December 2022]

2.2.1 Identify the year in which South Africa recorded the highest value
of exports. (1)

2.2.2 Name the account in the balance of payments (BOP) that records
portfolio investments. (1)

2.2.3 Briefly describe the term trade balance. (2)

2.2.4 Explain the impact of electricity shortages on export volumes in

South Africa. (2)

2.2.5 How can the South African Reserve Bank (SARB) reduce balance
of payments deficit? (2 x 2) (4)

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

NATIONAL ACCOUNTS FOR SOUTH AFRICA

At current prices

Item 2021 (R billion)

Compensation of employees 2 861
Net operating surplus 1 795
Consumption of fixed capital 797
Gross value added at factor cost 5 453
Taxes on production 132
Subsidies on production 12
Gross value added at basic prices (A)
Taxes on products 634
Subsidies on products 14
Gross domestic product at market prices 6 193

[Adapted from SARB Quarterly Bulletin, December 2022]

2.3.1 Identify in the table above the method used to calculate the gross
domestic product (GDP). (1)

2.3.2 Give ONE example of taxes on products. (1)

2.3.3 Briefly describe the term subsidy on production. (2)

2.3.4 Why is it important for a country to prepare national account

aggregates? (2)

2.3.5 Calculate the gross value added (GVA) at basic prices (A) in the
table above. Show ALL calculations. (2 x 2) (4)

2.4 Briefly discuss specialisation and mass production as effects of international

trade. (8)

2.5 How can business cycles influence the use of fiscal policy in the economy?
(4 x 2) (8)
[40]

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QUESTION 3: ECONOMIC PURSUITS 40 MARKS – 30 MINUTES

3.1 Answer the following questions.

3.1.1 Give any TWO examples of basic services provided by the

government. (2 x 1) (2)

3.1.2 How can the Integrated Manufacturing Strategy (IMS) promote

industrialisation in South Africa? (1 x 2) (2)

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

SOUTH AFRICA'S GROWTH AND DEVELOPMENT POLICIES

We need to address the

challenges that Black
Economic Empowerment face.

EMPLOYMENT
EQUITY ACT

[Adapted from Dailyfriend.co.za]

3.2.1 Identify a redress policy that aims to eliminate unfair discrimination

in South African workplaces. (1)

3.2.2 Name ONE measure used to improve the efficiency of markets. (1)

3.2.3 Briefly describe the term economic development. (2)

3.2.4 How can the government use taxation to promote business

efficiency? (2)

3.2.5 Explain the challenges in the implementation of Broad-Based Black

Economic Empowerment (BBBEE). (2 x 2) (4)

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

FOREIGN DIRECT INVESTMENT (FDI) IN SOUTH AFRICA

Compared to other African countries, the potential attractiveness of

South Africa is high. Foreign investments increased over the years and are
responsible for job creation as well as wealth-creating economic growth.

Most of the foreign direct investment inflows are directed to the financial,
mining, manufacturing, transportation and retail sectors. Beijing Automotive
Industry, BMW, Nissan and Mainstream Renewable Energy have been the
largest investors in recent years.

[Source: www.tradeclub.standardbank]

3.3.1 Identify ONE benefit of foreign direct investments to the economy. (1)

3.3.2 Name the financial incentive provided by the government to attract

new foreign investments in South Africa. (1)

3.3.3 Briefly describe the term industrial development. (2)

3.3.4 Why is the manufacturing sector important to the economy? (2)

3.3.5 Explain the factors that may influence the success of industrial
development zones (IDZs) in South Africa negatively. (2 x 2) (4)

3.4 Briefly discuss the terms of trade and the exchange rate as economic
indicators related to foreign trade. (2 x 4) (8)

3.5 Analyse the impact of low economic growth on the South African economy.
(4 x 2) (8)
[40]

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QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS

40 MARKS – 30 MINUTES

4.1 Answer the following questions.

4.1.1 Name any TWO characteristics of countries in the South. (2 x 1) (2)

4.1.2 How can an increase in the population's income levels influence

the demand for imports? (1 x 2) (2)

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

Effect of demand-side and supply-side policies

(new economic paradigm)
General price level

AS
AS1

e1
P1
e e2
P

AD1

AD

0
Q Q1 Q2 Real output

4.2.1 Identify the original equilibrium point in the graph above. (1)

4.2.2 Name ONE instrument of the monetary policy. (1)

4.2.3 Briefly describe the term business cycles. (2)

4.2.4 How can competition stimulate aggregate supply? (2)

4.2.5 Explain the effect of demand-side and supply-side policies on the

general price level and real output, with reference to the graph
above. (2 x 2) (4)

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

POPULATION DEMOGRAPHICS FOR SOUTH AFRICA IN 2022

2020 Population: 59 308 690
2022 Population: 59 893 885

Male Female
Age group

Population percentage

[Source: www.populationpyramid.net/south-africa/2022]

4.3.1 Identify the population percentage of females in the age group

30 to 34 years. (1)

4.3.2 Give an economic term that refers to the population age group
15 to 65 years. (1)

4.3.3 Briefly describe the term life expectancy. (2)

4.3.4 Explain the impact of malnutrition on the child mortality rate. (2)

4.3.5 Why is population size important to businesses and/or the

government? (4)

4.4 Discuss spatial development initiatives (SDIs) as South Africa's endeavours

(efforts) in regional development. (4 x 2) (8)

4.5 Analyse the relationship between the financial sector and other participants in
the circular-flow model. (4 x 2) (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:

MARK
STRUCTURE OF ESSAY
ALLOCATION
Introduction
The introduction is a lower-order response: Max. 2
 A good starting point will 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 mentioning in the introduction what you are going to discuss in
the body.
Body
Main part: Discuss in detail/In-depth discussion/Examine/Critically Max. 26
discuss/Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/
Assess/Debate
A maximum of 8 marks may be allocated for headings/examples.

Additional part: Critically discuss/Evaluate/Critically evaluate/Deduce/ Max. 10

Compare/Distinguish/Suggest/Interpret/Debate/How
A maximum of 2 marks may be allocated for mere listing of facts.
Conclusion
Any higher-order conclusion should include: Max. 2
 A brief summary of what has been discussed without repeating facts
already mentioned
 Any opinion or valued 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: MACROECONOMICS 40 MARKS – 40 MINUTES

 Discuss in detail the main objectives of the public sector in the economy. (26)

 Evaluate the impact of privatisation of state-owned enterprises (parastatals) on the

South African economy. (10)
[40]

QUESTION 6: ECONOMIC PURSUITS 40 MARKS – 40 MINUTES

 Discuss in detail export promotion as South Africa's international trade policy. (26)

 How can South Africa benefit from being part of the various trade protocols such as
the Southern African Development Community (SADC)? (10)
[40]

TOTAL SECTION C: 40
GRAND TOTAL: 150
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