Choose one of the following options. Indicate the number and the letter only.
QUESTION
An open economy is best described as a … sector economy.
A One
B Two
C three
D four
The correct answer is D. An open economy interacts with other economies in terms of trade, investment, and finance. It encompasses all four sectors: households, businesses, government, and foreign sector
QUESTION
Investment is an example of a or an … in the circular flow model.
A, leakage
B, injection
C, withdrawal
D, loss
The correct answer is B.In the circular flow model, investment is an injection because it introduces money into the economy, typically through business expenditures on capital goods.
QUESTION
Fiscal policy is an action taken by government in respect of taxation and … to influence economic activity
A, exchange control
B, expenditure
C, credit control
D, exchange control
The correct answer is B. expenditure. Fiscal policy involves government adjustments in spending levels and tax rates to influence a country’s economy. Expenditure here refers to government spending on goods and services
QUESTION
Economies of scale are associated with …
A, mass production.
B, limited output.
C, long-term average cost increases.
D, increased wastage.
The correct answer is A. mass production. Economies of scale occur when increasing production leads to lower average costs. This is typically achieved through mass production, where higher output spreads fixed costs over more units.
QUESTION
Production by the citizens of a country, locally and abroad, is called the … product.
A, gross national
B, gross domestic product
C, net national
D, net domestic
The correct answer is A. gross national product. Gross National Product (GNP) measures the total economic output of a country’s residents, both domestically and abroad.
QUESTION
A physically enclosed area next to a harbour or airport where exports are encouraged through incentives, is known as the … production for
A, spatial development initiatives.
B, industrial development zone.
C, special economic zone.
D, foreign investment grant.
The correct answer is C. special economic zone. A special economic zone (SEZ) is an area where business and trade laws differ from the rest of the country, aimed at increasing trade, investment, and job creation.
QUESTION
The comparison of a country’s export prices with import prices by means of indexes is referred to as the …
A, exchange rate
B, condition trade.
C, terms of trade.
D, inflation rate.
The correct answer is C. Terms of trade.Terms of trade is a measure that compares the export prices of a country relative to its import prices.
QUESTION
Economic development is measured in terms of the …
A, per capita gross domestic product.
B, increase in the productive capacity.
C, nominal gross domestic product.
D, money supply.
The correct answer is A. per capita gross domestic product. Economic development is often measured by per capita gross domestic product (GDP), which reflects the average economic output per person. This measure helps to evaluate the standard of living and economic well-being of the population.
QUESTION
Labour can be bought and sold in the … market.
A, goods
B, factor
C, financial
D, consumer
The correct answer is B The factor market is where services of the factors of production (land, labor, capital) are bought and sold.
QUESTION
Comparative cost advantage shows that world output can increase if countries … in what they do best.
A, impose tariffs
B, limit the use of technology
C, specialise
D, protect workers.
The correct answer is C. specialise. Comparative advantage suggests that countries should specialize in producing goods where they have a lower opportunity cost, leading to increased overall efficiency and output.
QUESTION
The medium-term expenditure framework (MTEF) is a …-year government expenditure and revenue projection.
A, three
B, one
C, two
D, four
The correct answer is A. The MTEF provides a three-year framework for planning and managing public expenditure.
QUESTION
The peak of a business cycle is characterised by a …
A, high demand for credit.
B, stable inflation rate.
C, high unemployment rate.
D, low output.
The correct answer is A. high demand for credit. At the peak of a business cycle, economic activity is at its highest, leading to high demand for credit as businesses and consumers seek to maximize their opportunities.
QUESTION
An increase in the productive capacity of the economy over a specific period of time is called …
A, contraction.
B, economic development.
C, economic growth.
D, globalisation.
The correct answer is C. Economic growth is the increase in the amount of goods and services produced by an economy over time.
QUESTION
Cost-sharing grants by government to improve roads is called the … Programme.
A, Expanded Public Works
B, Critical Infrastructure
C, Small Business Support
D, Skills Development
The correct answer is B. The Critical Infrastructure Programme provides cost-sharing grants to improve infrastructure, such as roads, to support economic activity
QUESTION
An example of an economic indicator is …
A, sanitation.
B, population growth.
C, life expectancy.
D, production price index.
The correct answer is D. The production price index (PPI) measures the average changes in prices received by domestic producers for their output and is a key economic indicator.
QUESTION
Social grants to the citizens of South Africa forms part of the … policy.
A, monetary
B, trade
C, growth
D, fiscal
The correct answer is D. Social grants are part of fiscal policy as they involve government spending aimed at improving social welfare.
Choose a description from COLUMN B that BEST matches an item/term in COLUMN A.
| COLUMN A | ANSWER | COLUMN B |
| 1, Nationalisation | The correct description is I. transfer of functions and ownership of entities from the private to the public sector. | A. number of years a person will live after birth. |
| 2, Medium-term expenditure framework | ]The correct description is F. shows income and expenditure estimates for a three-year period. | B. persuasion of banks by the South African Reserve Bank (SARB). |
| 3, System of national accounts | The correct description is G. prescribed by the United Nations to compile gross domestic product figures. | C. indicator used to measure the change in the price of goods produced locally when it leaves the factory floor. |
| 4, Money flows | The correct description is E. movement of income and expenditure between participants in the economy. | D. measures income inequality and wealth. |
| 5, Protectionism | The correct description is H. trade policy that tries to keep the domestic economy safe by restricting the import of goods and services. | E. movement of income and expenditure between participants in the economy. |
| 6, Gini coefficient | The correct description is D. measures income inequality and wealth. | F. shows income and expenditure estimates for a three-year period. |
| 7, Life expectancy | The correct description is A. number of years a person will live after birth. | G. prescribed by the United Nations to compile gross domestic product figures. |
| 8, Production price index | The correct description is C. indicator used to measure the change in the price of goods produced locally when it leaves the factory floor. | H. trade policy that tries to keep the domestic economy safe by restricting the import of goods and services. |
| I. transfer of functions and ownership of entities from the private to the public sector. | ||
QUESTION
Give the economic term or concept for each of the following descriptions.
1, The total value of final goods and services produced within the borders of a country in a given period.
The correct term is Gross Domestic Product.
2, Predicting the future economic activities using facts or information that is known.
The correct term is Extrapolation.
3, Record of all trade and financial transactions between a country and the rest of the world.
The correct term is Balance of payments.
4, The increase in the standard of living of the people over a period of time.
The correct term is Economic development.
5, Efforts by governments to move manufacturing and other businesses from metropolitan areas to rural areas.
The correct term is Decentralisation.
6, It measures the distance between the peak and the trough of a business cycle.
The correct term is Amplitude.
QUESTION
Name the monetary policy instruments used by the South African Reserve Bank.
The South African Reserve Bank uses the following tools to manage the economy and stabilize the financial system.
1, Interest rates: The South African Reserve Bank (SARB) uses interest rates, specifically the repo rate, as a primary tool to control inflation and stabilize the economy.
2, Cash reserve requirements: SARB sets the minimum amount of reserves that commercial banks must hold, which influences their ability to create loans and thus impacts the money supply.
3, Open market transactions: SARB conducts open market operations by buying or selling government securities in the open market to regulate the amount of money in the banking system.
4, Moral suasion: SARB may use moral suasion to influence and persuade banks and other financial institutions to adhere to certain policies or practices without direct enforcement.
5, Foreign exchange control: SARB implements controls and regulations on the buying and selling of foreign currency to stabilize the exchange rate and manage the balance of payments.
QUESTION
What is the purpose of a trend line in a business cycle?
A trend line in a business cycle helps in several keyways to understand and analyze economic activity. It identifies the long-term direction of economic indicators, showing whether the economy is generally growing, stagnating, or declining. By smoothing out short-term variations, it highlights the underlying, longer-term trajectory of the economy, aiding in making informed decisions without being misled by temporary changes.
Additionally, a trend line provides a basis for forecasting future economic activity, helping economists predict the economy’s future direction. This assists businesses, governments, and investors in planning and decision-making. Furthermore, the trend line acts as a barometer of economic health. A rising trend line indicates sustained growth and prosperity, while a downward or flat trend line may signal economic issues that need addressing.
2024 Memo Economics Paper 1 Grade12
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