2024 Memo Economics Paper 1 Grade12

Economics Grade 12 Final Past exam paper Revision grade 12 Economics 2024 Memo Economics Paper 1 Grade12

2024 Memo Economics Paper 1 Grade12

QUESTION
When calculating gross domestic expenditure (GDE), errors and omissions are accounted for by the …
A, market price.
B, residual item.
C, basic price.
D, input cost.

The correct answer is B residual item.When calculating gross domestic expenditure (GDE), errors and omissions are accounted for by the residual item. This refers to a category in national income accounting that captures discrepancies or missing data in the calculation of GDP. Errors and omissions can arise due to various reasons such as statistical discrepancies, unrecorded economic activities, or inaccuracies in data reporting.

QUESTION
The vertical difference between a trough and the next peak of a cycle is known as …
A,amplitude.
B, extrapolation.
C, moving average.
D, length of cycle.

The correct answer is A, amplitude.The amplitude of a cycle refers to the vertical difference between a trough (the lowest point) and the next peak (the highest point) of the cycle. It measures the magnitude of the oscillation or variation within the cycle.

QUESTION

The Minister of Finance presents the Medium-term Budget Policy Statement (MTBPS) in … every year.
A, February
B, June
C, April
D, October

The correct answer is B, Febuary.In South Africa, the Minister of Finance presents the Medium-term Budget Policy Statement (MTBPS) in February every year. The MTBPS is a key document that outlines the government’s fiscal policy and expenditure framework for the next three years. It provides an update on the economic outlook, revenue projections, and spending priorities, and sets the stage for the annual budget presented the following year.

QUESTION
The difference between tangible exports and tangible imports is called …
A, trade balance.
B, current transfer.
C, reserve assets.
D, trade deficit

The correct answer is A, trade balance.The difference between tangible exports and tangible imports is called the trade balance. It represents the net exports of a country, calculated as the value of goods and services a country exports minus the value of goods and services it imports. A positive trade balance indicates a surplus (more exports than imports), while a negative trade balance indicates a deficit (more imports than exports).

QUESTION
The worldwide interfacing and interaction of economies, wilh trade as an important element, is called …
A, nationalisation.
B, centralisation.
C, globalisation.
D, devaluation.

The correct answer is C, globalisation. Globalisation refers to the worldwide interfacing and interaction of economies, with trade being a crucial element. It involves the increasing interconnectedness and interdependence of countries through the exchange of goods, services, information, and capital. This process is driven by advances in technology, transportation, and communication, which enable greater economic integration and cultural exchange on a global scale.

QUESTION
The form of tax that is levied annually on the market value of residential. office and factory buildings is called …
A, capital gain tax.
B, property tax.
C, transfer duty.
D, estate duty.

The correct answer is B, property tax.Property tax is a form of tax that is levied annually on the market value of residential, office, and factory buildings. It is a local tax imposed by municipalities or local governments on property owners based on the assessed value of their real estate.

QUESTION
A geographically designated area that has been set aside to develop specific economic activities is known as a or an.
A, industrial base.
B, export processing zone.
C, industrial hub
D, special economic zone.

The correct answer is D, special economic zone.A special economic zone (SEZ) is a geographically designated area that has been set aside to develop specific economic activities. SEZs offer favorable economic policies and incentives, such as tax breaks and simplified customs procedures, to attract businesses and investment. The goal is to stimulate economic growth and development within the designated area.

QUESTION
The human development Index (HDI) of a country with the highest level of development is …
A, 10
B, 0
C, 1
D, 100

The correct answer is C The Human Development Index (HDI) is a composite index used to measure a country’s level of human development. It ranges from 0 to 1, with 1 indicating the highest possible level of human development. The HDI takes into account factors such as life expectancy, education, and per capita income to provide a comprehensive measure of a country’s development.

Choose a description from COLUMN B that matches the Rom in COLUMN A. Write only the letter

COLUMN A	COLUMN B
Real flow the correct answer is E	A when a person is required to give an explanation of his or her decisions or actions
Deregulation the correct answer is G	B used by the United Nations to compare the standards of living among different countries.
Accountability the correct answer is A	C Legal ownership of copyright design. patent or trademark by an individual or business.
Specialisation the correct answer is I	D Number of years that a new-born infant is likely to live
Trade neutrality the correct answer is F	E. The movement of factors of production. goods and services among economic participants.
Human development index the correct answer is B	F Payment of subsidies that are equal to import duties paid by export producers.
Intellectual property the correct answer is C	G the removal of laws and other forms of government control that interfere in the functioning of markets
Life expectancy. the correct answer is D	H production of goods and services in large quantities
	I. Focuses on the production or provision of a particular type of product.

QUESTION
Give one term for each of the following descriptions.

1, Occurs when the value of intermediate products is added to the final product when calculating GDP. .

The correct term is double counting

2, When all the people who are actively looking for work are able to find jobs or create jobs for themselves. .

The correct term is Full employment

3, The price of one currency in terms of another.

The correct term is Exchange rate

4, Measures that artificially restrict the movement of goods and services among countries.

The correct term is Trade barriers or protectionism

5, When the central bank convinces commercial banks to act in a manner that is desirable to the prevailing economic conditions

The correct term is Moral suasion

6, The total industrial capacity of an economy that is available for use.

The correct term is Capacity utilisation

QUESTION
Name the two factors that determine the size of the multiplier in a two-sector model

1, Marginal propensity to consume (MPC):
This is the proportion of additional income that households spend on consumption rather than save. The higher the MPC, the larger the multiplier effect, as more of each round of spending contributes to further rounds of income and consumption.

2, Marginal propensity to import (MPI):
This represents the proportion of additional income that is spent on imported goods and services rather than domestically produced goods and services. The higher the MPI, the smaller the multiplier effect, as more of the initial spending leaks out of the domestic economy.

QUESTION
How can the South African Reserve Bank use open, market transactions to increase money supply?

The South African Reserve Bank utilizes open market operations (OMOs) to boost the money supply by purchasing government securities from commercial banks and financial institutions. These purchases are funded by crediting the reserve accounts of banks, thereby increasing their available reserves. With higher reserves, banks can extend more loans to businesses and individuals, which in turn expands the overall credit in the economy and increases the money supply as these loans generate new deposits. This influx of liquidity also lowers short-term interest rates, stimulating borrowing and spending, and fostering economic growth.

Study the graph below and answer the questions that follow

QUESTION
Identify the category of consumer goods that recorded growth in the third quarter of 2022

The graph does show that durable goods were the highest expenditure category throughout the whole period depicted (Q4 2021 to Q3 2022)

QUESTION
Give one example of non-durable goods

An example of durable goods is Food

QUESTION
Briefly describe the term consumption.
Consumption refers to the buying of goods and services by households.

QUESTION
Why are savings regarded as leakages in the circular flow model?

In the circular flow model, savings are regarded as leakages because when money flows from consumers to banks, it is taken out of the financial cycle. This reduces the immediate spending on goods and services, decreasing the flow of money from households to firms.

QUESTION
How can an increase in interest rates influence households in the circular flow?

An increase in interest rates can lead to the following
1, Reduced Borrowing:
Higher interest rates increase the cost of borrowing. As loans and credit become more expensive, households are less likely to take out mortgages, car loans, or personal loans from banks.

2, Lower Consumer Spending:
With increased borrowing costs and a greater incentive to save, consumer spending on goods and services tends to decline.

Study the extract below and answer the questions that follow.

THE PRIVATISATION AND RESTRUCTURING PROGRAMME IN SOUTH AFRICA

The South African approach to privatization has been one of restructuring of state-owned enterprises (SOEs). The goals of restructuring have been to reduce government borrowing requirements and to extend private ownership to historically disadvantaged groups. However. little has been achieved as restructuring efforts have been slow and reluctant.

QUESTION
Identify a term that refers to parastatals.
The term that refers to parastatals is state owned enterprises (SOE’s)

QUESTION
Give one feature of public sector failure.
One feature of public sector failure in the context of South Africa’s privatization and restructuring programme is slow and reluctant implementation of reforms, which may be attributed to lack of motivation.

QUESTION
Briefly describe the term nationalization
Nationalization is the process whereby a government takes over the ownership and operation of privately owned enterprises, converting them into state-owned entities. When a business is nationalized, the government assumes all responsibilities related to its management, operations, and financial obligations, often with the intention of aligning the enterprise’s activities with national economic and social goals.

QUESTION
Why is it important for the government to remain in control of key input sectors such as energy and transport.
It is important for the government to remain in control of key input sectors such as energy and transport for several reasons as outlined below

1, Provision of Public Goods: Key input sectors often provide public goods that are non-excludable and non-rivalrous, such as clean energy and transportation infrastructure. The government is better positioned to manage these resources for the benefit of all citizens, ensuring broad accessibility and equity.

2, Economic Management: Control over essential sectors allows the government to manage the economy more effectively. It can use these sectors as tools for economic policy, such as stabilizing prices, controlling inflation, and steering economic growth in desired directions.

3, Protection of Natural Resources: Government control ensures that natural resources are managed sustainably and responsibly. This is particularly important in the energy sector, where the extraction and use of resources have significant environmental impacts. Government oversight can enforce regulations to protect the environment and promote renewable energy sources.

QUESTION
How can the South African government benefit from the privatisation of state owned enterprises SOEs.
Privatisation of state-owned enterprises (SOEs) in South Africa can offer the following benefits to the government:

1, Increased Tax Base: Privatisation can expand the tax base as private companies generate profits and pay taxes. This additional revenue can enable the government to fund more public services such as healthcare, education, and infrastructure development.

2, Reduced Fiscal Burden: State-owned enterprises often require financial bailouts when they struggle financially. Privatisation shifts the financial responsibility to the private sector, relieving the government of these burdensome expenditures. This allows the government to allocate funds more efficiently towards essential public services rather than propping up struggling enterprises.

3, Improved Resource Allocation: Privatised enterprises are driven by profit motives and competition, which generally leads to more efficient resource allocation. Private companies are incentivised to streamline operations, invest in innovation, and improve productivity. This efficiency can contribute positively to economic growth and development.

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