ECONOMICS
PAPER 1
GRADE 12
NSC PAST PAPERS AND MEMOS
FEBRUARY/MARCH 2017

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.

QUESTIONS

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 make  a cross (X) over the letter (A–C) of your choice in the ANSWER BOOK. 
EXAMPLE: 
1.1.9  

1.1.1 The point where economic contraction is at its lowest is  called a … 

1. trough.
2. peak.
3. trend. 

1.1.2 The reduction or removal of tariffs that prevent the free flow of  goods and services between countries is called … 

1. protectionism.
2. trade embargo.
3. trade liberalisation. 

1.1.3 The new economic paradigm that relates to the smoothing of  business cycles is rooted in …-side policies. 

1. demand-and-supply 
2. only demand
3. only supply 

1.1.4 A form of economic integration that removes all tariffs between  member countries is called a …  

1. free-trade area.
2. customs union.
3. common market. 

1.1.5 The Reserve Bank uses the … policy to influence aggregate  money supply.  

1. fiscal
2. monetary
3. budgetary

1.1.6 The gap between rich and poor has widened because the demand  for … workers has decreased globally. 

1. unskilled
2. skilled
3. highly skilled 

1.1.7 An industrial policy that encourages industrial development in a few  urban areas is called … 

1. decentralisation.
2. privatisation.
3. centralisation. 

1.1.8 A regional development initiative that focuses on the socio economic development of Southern Africa is known as the … 

1. African Union. 
2. Southern African Growth Initiative.
3. Southern African Development Community. (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, for example 1.2.9 J. 

(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. 

1.3.1 A set of accounts that shows a systematic record of the trade and  financial transactions between a country and the rest of the world 
1.3.2 The curve that shows the relationship between tax rates and tax  revenue 
1.3.3 The market engaged in the buying and selling of foreign currencies  
1.3.4 A spatial area that forms a passageway, allowing access from one  area to another as part of regional development 
1.3.5 It is used to measure the performance and trends of economic  variables over time 
1.3.6 The withdrawal of money from the circular flow (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 Name any TWO monetary policy instruments. (2 x 1) (2) 
2.1.2 Identify ONE benefit of import substitution for domestic households.   (1 x 2) (2) 

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

THE CIRCULAR FLOW OF INCOME AND SPENDING  

[Adapted from Google Images 2015] 

2.2.1 Identify ONE injection in the diagram above. (1)
2.2.2 Name the type of economy portrayed by the above diagram. (1)
2.2.3 Briefly describe the term circular flow. (2)
2.2.4 What is the main objective of social transfers? (2) 
2.2.5 Briefly explain the importance of the factor market in the circular flow.  (2 x 2) (4) 

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

2.3.1 Identify the challenge faced by South Africa to succeed in  international markets from the extract above. (1) 
2.3.2 Name ONE brand from the extract which is imported from Korea. (1) 2.3.3 Briefly describe the term protectionism. (2) 
2.3.4 What measures can government take to ensure that local  industries are protected? (2) 
2.3.5 In your opinion, how can local support boost the South African  economy? (4) 

2.4 Distinguish between the amplitude and trend line as features underpinning  forecasting. (2 x 4) (8) 
2.5 How can the establishment of more labour-intensive industries benefit South Africa? (8)

[40]

QUESTION 3: ECONOMIC PURSUITS 40 MARKS – 30 MINUTES 
3.1 Answer the following questions. 

3.1.1 Name any TWO aspects that can be used to differentiate countries  in the North-South divide. (2 x 1) (2) 
3.1.2 What is the relationship between economic growth and economic  development? (1 x 2) (2) 

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

3.2.1 Identify ONE growth and development plan for South Africa in the  extract above. (1) 
3.2.2 What is the main aim of the RDP? (1) 
3.2.3 What message is depicted in the cartoon above, in an economic  context? (2) 
3.2.4 What role has the RDP played in improving the lives of people  since 1994? (2) 
3.2.5 In your opinion, how can the NDP bring about 'a better life for all'? (4) 

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

3.3.1 According to the Minister of Trade and Industry, why is it important  for African economies to diversify? (1) 
3.3.2 What new approach should countries follow in doing business? (1)
3.3.3 Briefly describe the term common market. (2) 
3.3.4 Give ONE reason why developing countries diversify as part of  their import substitution policies. (2)   
3.3.5 How can South Africa benefit by focusing on value-added production? (4) 

3.4 Discuss competitiveness and investment in human capital as benchmark  strategies for industrial development. (2 x 4) (8) 
3.5 How can the development of small businesses benefit the South African  economy? (8)

[40]

QUESTION 4: MACROECONOMICS AND ECONOMIC PURSUITS  
 40 MARKS – 30 MINUTES
4.1 Answer the following questions. 

4.1.1 Name any TWO forms of import substitution. (2 x 1) (2) 
4.1.2 What impact will an increase in the VAT rate have on the standard  of living of the poor? (1 x 2) (2) 

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

4.2.1 Which institution provides the statistics above? (1) 
4.2.2 Which item records transactions relating to donations and gifts to  other countries? (1) 
4.2.3 Briefly describe the capital transfer account as part of the BoP. (2)   
4.2.4 Give ONE reason for the decline in gold exports. (2)
4.2.5 Calculate the trade balance for 2015. Show ALL calculations. (4)

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

[Source: Paresh cartoons.com]

4.3.1 Identify ONE major challenge in the cartoon above. (1)
4.3.2 State ONE negative consequence of poverty in the cartoon above. (1)
4.3.3 What does the 'Mandela Legacy' refer to? (2) 
4.3.4 Suggest ONE way in which South Africa can be freed from  inequality. (2)   
4.3.5 How can human resources be targeted to be more effective in  solving the problems in the cartoon above? (4) 

4.4 Briefly discuss special economic zones as part of the industrial development  plan of South Africa. (4 x 2) (8) 
4.5 How can South Africa benefit from trading in global markets? (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  
The state plays a significant role in a mixed economic system and is therefore one of  the largest sectors in the economy. 

• Discuss the macroeconomic objectives of the state. (26)
• How successful is the implementation of South Africa's fiscal policy? (10) [40]   

QUESTION 6: ECONOMIC PURSUITS 40 MARKS – 40 MINUTES  
Economic and social indicators are used globally to compare and describe economic performances of countries. 

• Examine the following social indicators:
  • Demographics 
  • Education 
  • Nutrition and health (26)
• What can the South African government do to improve the delivery of social  services to its citizens? (10)

[40] 
TOTAL SECTION C: 40
GRAND TOTAL: 150