ECONOMICS
PAPER 1
GRADE 12 
NSC PAST PAPERS AND MEMOS
FEBRUARY/MARCH 2018

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 blue or black ink. 
10. You may use a non-programmable pocket calculator.
11. Write neatly and legibly.

QUESTIONS 

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  number (1.1.1–1.1.8) in the ANSWER BOOK, for example 1.1.9 D.   
1.1.1 The government is responsible for … sector provisioning. 

1. private
2. foreign
3. public
4. financial 

1.1.2 The total remuneration that the owners of production factors  receive is called national … 

1. production.
2. expenditure.
3. exports. 
4. income. 

1.1.3 The exchange rate system used by South Africa is called the ... exchange rate system. 

1. fixed
2. managed floating
3. free-floating
4. gold standard 

1.1.4 An indication of long-term growth in the economy is referred to as the … 

1. trend line.
2. amplitude.
3. length.
4. trough. 

1.1.5 The number of years that a new-born baby is likely to live is known  as … 

1. life expectancy.
2. population.
3. nutrition.
4. population growth. 

1.1.6 Globalisation makes countries more economically … 

1. isolated.
2. interdependent.
3. structured.
4. independent.

1.1.7 Households in South Africa spend most of their income on … 

1. durable goods.
2. semi-durable goods.
3. non-durable goods.
4. services. 

1.1.8 An indicator generally used to measure the cost of production is  known as the … index. 

1. consumer price 
2. production price 
3. headcount  
4. price (8 x 2) (16) 

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. 

(8 x 1) (8)
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.  NO abbreviations or acronyms will be accepted. 
1.3.1 The owners of the production factors in the economy 
1.3.2 A summary of the value of different leading indicators into a single  value 
1.3.3 A statement of a country's trade and financial transactions with the  rest of the world 
1.3.4 Goods that are harmful to society, for example cigarettes 
1.3.5 The main source of revenue to the state 
1.3.6 Encourages investment in manufacturing, agriculture and mining   (6 x 1) (6) 

 TOTAL SECTION A: 30

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 Give any TWO examples of leakages. (2 x 1) (2) 
2.1.2 Why should the public sector participate in the management of the  economy? (1 x 2) (2) 
2.2 Study the table below and answer the questions that follow. 

[Source: SARB Quarterly Bulletin, March 2017] 
2.2.1 Which method was used in the calculation of the gross domestic  product (GDP) above? (1) 
2.2.2 Which year is currently used as the base year by the South African  Reserve Bank (SARB)? (1) 
2.2.3 Briefly describe the term gross national product. (2) 
2.2.4 Which sector has increased its contribution to the GDP steadily  since 2014? (2) 
2.2.5 What happened to the value added by the primary sector between  2015 and 2016? Motivate your answer. (2 x 2) (4)
2.3 Study the graph below and answer the questions that follow. 

2.3.1 Identify a trough in the business cycle above. (1)   
2.3.2 During which year was the first business cycle fully complete in  the graph above? (1) 
2.3.3 Briefly describe the term real (actual) business cycle. (2) 
2.3.4 How can the South African government use government spending as fiscal measure to stimulate the economy? (2) 
2.3.5 How could the South African Reserve Bank have prevented the  business cycle from plunging to T3? (2 x 2) (4) 
2.4 Briefly discuss economies of scale and choice as arguments in favour of free  trade. (2 x 4) (8) 
2.5 With the aid of a well-labelled Laffer curve, explain the impact of a tax rate  increase on state revenue. (8) [40] 

QUESTION 3: ECONOMIC PURSUITS 40 MARKS – 30 MINUTES 
3.1 Answer the following questions. 
3.1.1 Name any TWO basic services that influence a person's standard  of living. (2 x 1) (2) 
3.1.2 How can SMMEs support economic growth? (1 x 2) (2)
3.2 Study the information below and answer the questions that follow. 

3.2.1 Identify in the extract above the international institution that prepares statistics on human development. (1) 
3.2.2 Name ONE indicator in the extract that is used in measuring  standard of living. (1) 
3.2.3 Briefly describe why urbanisation is regarded as an economic  indicator. (2) 
3.2.4 Briefly describe why urbanisation is regarded as a social indicator. (2) 
3.2.5 How should high education inequalities be addressed to improve  the standard of living of South Africans? (2 x 2) (4)
3.3 Study the extract below and answer the questions that follow. 

3.3.1 What challenge must South Africa address by 2030 according to  the extract above? (1)   
3.3.2 In the extract above, identify ONE way in which South Africa could  minimise the challenges it faces. (1) 
3.3.3 Briefly describe the term economic growth. (2) 
3.3.4 What economic benefit will the implementation of the National  Development Plan have on the economy of South Africa? (2) 
3.3.5 How can poverty and inequality be addressed in South Africa?  (2 x 2) (4) 
3.4 Briefly discuss the repo rate and money supply as economic indicators. (2 x 4) (8) 
3.5 Why is it important for the government to assess the performance of the  economy from time to time? (8) [40]

QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS  
 40 MARKS – 30 MINUTES 4.1 Answer the following questions. 
4.1.1 Give any TWO reasons for public sector failure. (2 x 1) (2) 
4.1.2 What impact will the introduction of a green economy have on the industrial development plan of South Africa? (1 x 2) (2) 
4.2 Study the extract below and answer the questions that follow. 

4.2.1 Who presents the budget speech in Parliament? (1)
4.2.2 Identify the type of budget in the extract above. (1)
4.2.3 Briefly describe the term budget. (2)
4.2.4 What is the main purpose of levying sugar tax? (2) 
4.2.5 Explain why an increase in VAT will have a negative impact on the  economy. (2 x 2) (4)
4.3 Study the information below and answer the questions that follow. 

4.3.1 In the information above, identify a government department that  drives the implementation of regional development policies. (1) 
4.3.2 Which corridor is represented by ① in the map above? (1)   
4.3.3 Briefly describe the term corridor. (2) 
4.3.4 What is the aim of the government with the adoption of regional  development policies? (2) 
4.3.5 How can the introduction of special economic zones (SEZs) benefit  the economy of South Africa? (2 x 2) (4)
4.4 Explain changes in demand and interest rates as measures to correct the  balance of payments disequilibria. (2 x 4) (8) 
4.5 How does South Africa's regional development policies compare to  international benchmarks in terms of good governance and partnerships? (8) [40] 

TOTAL SECTION B: 80

SECTION C 
Answer any ONE of the two questions in this section in the ANSWER BOOK. Your answer will be assessed as follows: 

QUESTION 5: MACROECONOMICS 40 MARKS – 40 MINUTES  

• Discuss import substitution as part of South Africa's international trade policy under  the following:
  • Methods (13 marks)
  • Reasons/Advantages (13 marks) (26 marks)
• With the aid of a graph, assess the effect of an increase in mass production on  international trade. (10 marks) [40]   

QUESTION 6: ECONOMIC PURSUITS 40 MARKS – 40 MINUTES  

• Discuss the supply-side approach in promoting growth and development in  South Africa by including:
  • Efficiency (13 marks)
  • Cost of doing business (13 marks) (26 marks)
• How effective was the Reconstruction and Development Programme (RDP) in addressing the inequalities of the past in South Africa? (10 marks) [40] 

TOTAL SECTION C: 40
GRAND TOTAL: 150