# Economics Grade 12 Paper 1 Mpumalanga Mock 2025 Memo > Grade 12 Economics Paper 1 memorandum from the Mpumalanga Mock Exam 2025, 16 pages. Read online or download the free PDF. - Page: https://www.hlayiso.com/library/economics-grade-12-nsc-p1-memo-september-2025-mpumalanga/36464337-feec-4be2-b86b-a5c46442c782 - Updated: 2026-09-27 - Subject: Economics - Grade: Grade 12 - Document type: Memorandum - Year: 2025 - Exam period: Mpumalanga Mock Exam - Paper: 1 - Curriculum: CAPS - Pages: 16 Breadcrumbs: [Home](https://www.hlayiso.com/) › [Library](https://www.hlayiso.com/library) › [Grade 12](https://www.hlayiso.com/library/grade-12) › [Economics](https://www.hlayiso.com/library/grade-12/economics) › [Economics Grade 12 Paper 1 Mpumalanga Mock 2025 Memo](https://www.hlayiso.com/library/economics-grade-12-nsc-p1-memo-september-2025-mpumalanga/36464337-feec-4be2-b86b-a5c46442c782) ## About this document Economics · Grade 12 · Mpumalanga Mock Exam · 2025. Memorandum, 16 pages. 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Layout, diagrams and tables may not survive extraction. ### Page 1 MARKS: 150 education MPUMALANGA PROVINCE REPUBLIC OF SOUTH AFRICA NATIONAL SENIOR CERTIFICATE GRADE 12 ECONOMICS P1 SEPTEMBER 2025 MARKING GUIDELINES This marking guideline consists of 16 pages. ### Page 2 SECTION A (COMPULSORY) QUESTION 1 30 MARKS 1.1 MULTIPLE CHOICE 1.1.1 Cc added Vv 1.1.2 A Phillips curveY ¥ 1.1.3 Cc February Vv 1.1.4 A Investments by foreign countries. “: 1.1.5 B direct Vv 14.8 D progressivevY ¥ 3 a B Trade, Industry and Competition. vv 141.8 D CPI vv (8x2) (16) 1.2 MATCH TYPE 12" | the main participants and owners of factors of production in the economy ¥ 12:2 H they believe that business cycles are caused by factors from within the economy ~ 1.2.3 G characterised by non-excludability and non-rivalry in consumption” 1.2.4 F importing and exporting goods and services across countriesY¥ 1.2.5 A includes measures such as a complete ban on the import of certain products ¥ 1.2.6 D provision of services such as basic health care and school meals for free to the poor ¥ 127 Cc the government's three-year rolling action strategy aimed at improving the manufacturing sectorY 1.2.8 B movement of people from rural areas to cities and towns ¥ (8x1) (8) ### Page 3 1.3 Broad Based Black Economic Empowerment /Black Economic ONE TERM 1.3.1 Basic prices ¥ 1.3.2 Demerit goods ¥ 1.3.3 Free-—floating v 1.3.4 Empowerment ¥ 1.3.5 Corridors v 1.3.6 Infant mortality ~ (6 x 1) TOTAL SECTION A: (6) 30 ### Page 4 SECTION B QUESTION 2: MACRO-ECONOMICS 40 MARKS 2.2 2.4.4 2.1.2 Name any TWO examples of money flow in the circular flow. Factor income ¥ Import payment ” Export earnings v Taxation “ Payment for goods and services Vv (2x1) How does deregulation help to improve the efficiency of markets? Removing laws and regulations that hamper the operation of the market can make markets effective and productive vv (Accept any other correct relevant responses) (1x 2) DATA RESPONSE 2:2:1 222 2.2.3 2.2.4 Identify the market in which land can be bought and sold Factor marketY Name the leakage in the economy above. SavingsY Briefly describe the term circular flow. A model that shows the relationships between income, production, and expenditure vv (Accept any other correct relevant responses) Explain the relationship between multiplier and the circular flow. Multiplier of income, production and expenditure takes place in the circular flow Vv ¥ (Accept any other correct relevant responses) (2) (2) (2) (2) ### Page 5 2.3 2.2.5 If the households consume 80% of their income, what would be the size of the multiplier in this economy? Show all the calculations. 80/100 = 0.8v K = 1/ (1 - mpc) ¥ Max.3 K = 1/(1 - 0.8) ¥ K=1/0.2¥ K=5v (4) DATA RESPONSE 2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 Identify the turning point during which there is very high employment of factors of production. Peak ¥ (1) Name the business cycle feature labeled A in the diagram above. Length of a cycle Vv (1) Briefly describe the term leading indicator. They are business cycle indicators that change before the economy changesv ¥ (Accept any other correct relevant response) (2) What does a low amplitude explain about a business cycle? The underlying forces in the economy are weak leading to a low to moderate contraction or expansion Vv ¥ (2) (Accept any other correct relevant response) How can the restrictive fiscal policy be applied to influence economic activities? = Aan increase in taxation can lead to a decrease in consumers’ disposable income and spending Vv ¥ = Adecrease in government expenditure can result in a decrease in aggregate expenditure Vv = Decreased aggregate expenditure can reduce production resulting in fewer factors of production employed v ¥ (2 x 2) (4) (Accept any other correct relevant response) ### Page 6 24 25 Explain the components of the monetary policy. * Interest rates: the repurchase rate (repo rate) is used when the commercial banks borrow money from the SARB v ¥ * Cash reserve requirements: the banks are required to maintain a certain amount of reserves in their accounts with the SARBY ¥ = Open market transaction: SARB can influence the money in circulation by selling or buying of government bonds vv » Moral suasion: SARB persuades the banks to act in the manner that is desirable for the current economic climate Vv“ « Exchange rate policy: the monetary authorities can use a free floating or managed floating exchange rate system to influence the economy’ ¥ = SARB uses the free-floating system where the value of the currency is determined by demand and supplyv “ (Accept any other correct relevant responses) (8) (Allocate a Maximum of 4 marks for the mere listing of facts) How can the government reduce a deficit on the Balance of Payment? The government can reduce the deficit by applying the following measures: = increasing interest rates can make credit expensive, therefore it can reduce spending on imports vv = increasing foreign investments as a result of increased interest rates, therefore increasing capital inflow vv = applying export promotion to encourage the production of goods that can be exported, leading to money inflow vw * implementing import substitution, by paying incentives to produce goods domestically rather than to import them, reducing money outflow v ¥ = encouraging surpluses on the financial account, therefore using such surpluses to lend to other countries can result in money inflow as interestv ¥ (8) (Accept any other correct relevant responses) [40] (Allocate a Maximum of 2 marks for the mere listing of facts) ### Page 7 QUESTION 3: ECONOMIC PURSUITS 40 MARKS 3.1 3.2 Short questions: 3.1.1 3.1.2 Name the TWO elements (indicators) of productivity. = Labour productivity ¥ = Remuneration per worker ¥ (2x 1) How can the depreciation of the currency affect the demand of imported goods and services? Imported goods become expensive leading to a decrease in demand for such goods v ¥ (1x 2) (Accept any other correct relevant responses) DATA RESPONSE 21 3.2.2 3.2.3 3.2.4 3.2.5 Identify the growth and development approach that focuses on increasing total consumption. Demand side policies v Name the indicator used to measure economic development. Per capita income/ income per personY Briefly describe the term economic growth. An increase in the production capacity of a country over a period of time Vv (Accept any other correct relevant response) Why can economic growth sometimes fail to result in economic development? Population growing at a higher rate than economic growth, resulting in shortages of employment Vv” (Accept any other correct relevant response) How can government improve business efficiency to achieve economic growth and development? = Charging reasonable taxes rates can encourage enterprises to increase production of goods and services VY = Providing businesses with some advisory services free of charge can encourage productivityvY ¥ = Improving the quality of labour by improving provision of health care, education and training Vv (2% 2) (Accept any other correct relevant response) (2) (4) ### Page 8 3.3 3.4 DATA RESPONSE 3.3.1. Identify the IDZ located in the Eastern Cape whose industry is automotive and general manufacturing. East London IDZ ¥ 3.3.2 Name the type of industry found in the Saldanha (DZ. Steel¥ 3.3.3 Briefly describe the term special economic zones. These are geographically demarcated areas where specific economic activities have been identified to be developed. vv (Accept any other correct relevant responses) 3.3.4 Explain the objective of spatial development initiatives. = Attract business investments to neglected areas in the countryY ¥ * Stimulate growth and employment in underdeveloped areas Vv (Accept any other correct relevant responses) 3.3.5 Why is industrial development important for a country? * It allows a country to use the world economy to trade and acquire knowledge, to increase industrialisation Vv“ * It helps to maintain macroeconomic stability by growing the economy, creating jobs, stabilising the currency and interest rates vv * It allows a country to achieve high rates of savings and investment, which can lead to growth in industries Vv ¥ (2 x 2) (Accept any other correct relevant responses) Briefly discuss good governance and sustainability as the benchmarks for industrial development Good governance = Development strategies should be managed effectively and free of corruption vv * Principles of accountability and transparency should be applied Vv Vv * Projects to be correctly programmed monitored and evaluated Vv ¥ = Efficient financial control measures to be used Vv ¥ (Max. 4) Sustainability = Aregion should have the capacity to support its own development Vv ¥ = The natural resources and human resources should be used efficientlyv ¥ * Employment and sustainable development should be achieved vv * Development should be a long-term approach rather than for short-term profit-making purposes Vv (Max.4) (Accept any other correct relevant responses) (Allocate a Maximum of 4 marks for mere listing of facts) (2) (8) ### Page 9 3.5 Analyse the globalization challenges faced by developing countries. In many developing countries including in Africa, poverty and inequality have been increasing over the years Vv ¥ Most developing countries struggle to attract foreign direct investment which is important for increasing economic growth Vv ¥ Even countries that run honest governments with low inflation rates and balanced budgets still struggle to grow economically compared to developed countries VW Majority of developing countries ‘farmers struggle to compete in international markets due to high subsidies provided by developed countries to their farmersv ¥ High subsidies lead to developed countries' farmers charging very low prices for their products, therefore taking poor farmers out of the market’ ¥ Mass production by developed countries causes air pollution and climate change that negatively affect agricultural activities which are developing countries’ main economic activityY ¥ Poor farming methods reduce the fertility of soil therefore reducing the level of economies of developing countries¥ Vv (Accept any other correct relevant responses) (Allocate a maximum of 2 marks for mere listing of facts) QUESTION 4: MACRO-ECONOMICS AND ECONOMIC PURSUIT: 40 MARKS 4 4.3 Short questions: 4.1.1. Name any TWO incentives used for industrial development in South Africa. Small business program” Skill support programy’ Critical infrastructure facility” Custom free incentivesY Foreign investment grant~ Strategic investment grant “ Service to business processesY (2x 1) 4.1.2 Why do some countries prefer to fix their currencies to the US dollar? To avoid the effects of extreme fluctuations in the value of their currenciesv ¥ (Accept any other correct relevant responses) (1 x 2) DATA RESPONSE 4.3.1 Identify the product (commodity) that earns the largest foreign exchange when exported. Gold ¥ (8) [40] (2) (2) ### Page 10 4.3 4.3.2 43.3 4.3.4 4.3.5 Name any ONE other main account of the Balance of Payment. = Financial account ¥ = Capital transfer account “ Briefly describe the term Balance of Payment A systematic record of a country’s transactions with the rest of the world over a specific periodY “ (Accept any other correct relevant responses) Why is the trade account important to an economy? It reflects information on transactions involving exports and imports of goods (merchandise) v ¥ (Accept any other correct relevant responses) Calculate the balance on current account indicated by letter A. = 1914+113+281+195 v — ( 1843+343+356+45) v = 2 503 — 2 587¥ =-84V DATA RESPONSE 4.3.1 4.3.2 4.3.3 4.3.4 Identify the main monetary policy instrument that is used to control inflation. Interest rate ¥ Name the inflation indicator that informs about the cost of production in a country. Producer Price Index / PPI “ Briefly describe the term economic indicators. These are statistics used to assess the performance of an economyv ¥ (Accept any other correct relevant responses) Why are countries required to standardize their economic and social indicators? * To make the economic data of countries in the world comparablev ¥ * The level of development of a country can be determined for purposes of providing financial aid VW (Accept any other correct relevant responses) (1) (2) ### Page 11 4.4 4.5 4.3.5 How are employment indicators useful in the economy? To calculate trends in employment in different sectors or industries; to disclose structural changes in the economy Vv To calculate productivity to show the success of the economy in using its full potential v~ (2 x 2) (Accept any other correct relevant responses) Briefly discuss the money market and capital market. Money market This is a market for short term loans and savings (three years and shorter) “¥¥ SARB is a key institution in this market. It includes inter- banking lending for a period as short as overnight. v v The securities traded include short term deposits, short term debentures and treasury bills vv (Max 4) Capital market This is a market for long term savings and loans. VW JSE is a key institution in this market as it trades in shares. Vv Examples of securities traded in this market are long term deposits, mortgage bonds, shares and unit trusts. vv (Max 4) (Allocate a maximum of 4 marks for mere listing of facts) Evaluate the provision of basic services (as indicators of social development) in South Africa. Successes : = The majority of the households (about 82.7% in 2022) in South Africa used piped water as the main source of drinking water Vv ¥ = Local governments are tasked with the sustainable delivery of solid waste disposal services, subject to national and provincial regulations and standards ¥¥ = Household waste is removed at least once per week this resulted in a decrease in households that used their refuse dumps thus reducing health hazards vv = There is an increase in the supply of electricity; nearly 94.3% of households in South Africa had access to electricity in 2022 vv (4) (8) ### Page 12 Failures: Households still experience some water interruptions and poor water quality in some municipalities due to aging and unmaintained infrastructure vv Although there is an increase in households receiving water from municipalities, there are households who still rely on unsafe sources such as rivers, dams, and streams mostly in rural areas VV Many households still lack access to safe, affordable, and reliable sanitation services, for example, others are still using pit toilets and bucket toilets vv There are still rural areas that still do not have access to the supply of electricity, therefore forced to rely on alternative sources of energyY ¥ Households especially in lower-income areas continue to experience electricity supply interruptions due to the effect of load shedding or load reduction Vv” (Accept any other correct relevant responses) (Allocate Max. 2 marks for the mere listing of facts) (8) TOTAL SECTION B: 80 ### Page 13 SECTION C ESSAYS QUESTION 5: MACROECONOMICS 40 MARKS - 40 MINUTES e Discuss in detail the main objectives of the public sector in the economy. (26 marks) e Why does the public sector often fail to achieve its macroeconomic objectives? (10 marks) INTRODUCTION The public sector is the part of the economy that is managed, owned, and controlled by the governmentyY ¥ (Max. 2) (Accept any other relevant introduction) BODY: MAIN PART To improve Economic growth Vv = Economic growth is an increase in production of goods and services by a country ina year Vv = Economic growth is measured by real GDP. Real GDP is the value of all finished products produced in the country after the effects of inflation have been removed VV = The economic growth rate must be higher than population growth rate for people's lives to improve Vv ¥ To achieve full employment or to reduce unemployment” = Full employment is when all people who are looking for jobs get employed v v = Itis therefore the aim of the government to create decent jobs vv Steps that the government can take to achieve full employment include: = In the short run- employment can be increased by using direct employment schemes, subsidies such as youth wage subsidies v v = In the medium term government can support labour-intensive activities, especially in = the agricultural sector v “ = The government can provide incentives to businesses to invest in those industries which employ a lot of people v v = In the long term government can support knowledge-intensive and capital-intensive sectors to remain competitive vv To maintain price stability V = Price stability occurs when prices of goods change by smaller percentages VV = In South Africa prices are stable when the inflation rate is within the 3 - 6% vv = If inflation exceeds the 6%, interest rates are increasedv Vv = Increased interest rate reduces the over-spending and inflation vv = If inflation decreases below 3%, interest rates are reduced VV = This serves to increase spending and production and, therefore price levels. vv ### Page 14 To maintain exchange rate stability V The government should manage the economy (through fiscal and monetary policies) in a way that the exchange rate becomes stable Vv Too much depreciation and appreciation of the rand create uncertainty and should be limited vv To achieve economic equityY The distribution of income in the economy is often not fair, as some people earn large amounts of money while others earn very little VW Through taxation, the government can redistribute income to try to reduce inequality” ~ Some of the measures that the government uses to help the poor are the provision of free education, free basic health, grants, and subsidies Vv ¥ (Max. 26) Accept any other correct relevant response) Allocate a maximum of 8 marks for the mere listing of facts including headings) ADDITIONAL PART The public sector often fails to achieve its macroeconomic objectives because: leaders often have poor management skills, lack proper experience and training, and have hidden agendas leading them to have policies incorrectly implemented Vv” many workers lack motivation to carry out their duties efficiently due to the government's failure to acknowledge those who do outstanding workvY ¥ many government employees are apathetic (uninterested/ indifferent) about their work, which results in poor service delivery VV lack of accountability often leads to mismanagement of funds, resulting in the non-delivery of some public goods and services to citizens Vv excessive and complex administrative procedures followed in the government sector, often result in government projects taking too long to be implemented Vv ¥ politicians who are only interested in keeping their offices often use the budget to get votes while postponing the provision of public goods and services Vv ¥ (Max.10) (Accept any other correct relevant response) (Allocate a maximum of 2 marks for the mere listing of facts) CONCLUSION Public sector failure can lead to macro-economic problems such as low economic growth, high inflation and unemployment vv (Max.2) (Accept any other relevant higher order conclusions) (40) ### Page 15 QUESTION 6: ECONOMIC PURSUITS 40 MARKS e Discuss in detail arguments in favour of protectionism. (26 marks) e How can export promotion be beneficial to a country’s economy? (10 marks) INTRODUCTION Protectionism refers to an international trade policy that may be used to discourage the import of certain goods and services to protect local industriesv “ (Max. 2) (Accept any other relevant introduction) BODY: MAIN PART Infant industry argument ¥ = Newly established industries especially in developing countries find it difficult to cope with well-established industries from developed countries v ¥ = Protectionism is suitable for protecting infant industries against established foreign industries which often use unfair competing methods such as price-cuttingY ¥ = In their early years, businesses are faced with higher costs of production and, therefore exposed to failure if not protectedv ¥ Stable wage levels and a high standard of living V = Countries with high wages often believe that the standard of living will be undermined if cheaper goods are imported from countries with low wage levels Vv = Imports from countries with relatively low wage levels can constitute unfair competition VY = These imports threaten the standard of living of the domestically well-paid workers. vv = Protection is required to prevent local standards of living from falling and local firms from closing downy ¥ Increased employmentY = Countries with high levels of unemployment are always under political pressure to impose trade restrictions to protect local jobsv ¥ = They often implement protection policies to stimulate industrialisation Vv ¥ = Import restriction may increase consumption of locally produced goods and this may increase employment v ¥ Self-sufficiency and strategic industries V = In times of war, cut-offs or friction between countries can occur, and make a country unable to trade with othersv Vv = Accountry can protect local industries that produce goods that are of national importance such as agriculture, electricity, and military equipmentv ¥ Prevention of dumping ¥ = Dumping happens when foreign firms sell their goods in foreign countries at lower prices than the products’ cost of productionv ¥ ### Page 16 = It is also when a foreign firm sells its products in foreign markets at a lower price than the price charged at its domestic marketv ¥ = This causes local producers to lose profit as many consumers may enjoy buying from foreign firms at lower prices VW” « In the long run the local industries can be forced out of the marketY ¥ Stable exchange rates and Balance of Payments ¥ = When imports are much higher than exports, there can be an unsustainable deficit in the current account of the Balance of Payments Vv” = Countries can impose protection measures to reduce imports v “ = Reduced imports can lead to an improvement in the Balance of payment and the value of currenciesv ¥ Protection of natural resourcesY = Free trade can easily exhaust the natural resources of a country because the entire world can now share these resources and consume themv ¥ = With protectionism, local firms will be producing only for the local market as such natural resources can be conserved V¥ (Max.26) (Accept any other correct relevant response.) (Allocate a maximum of 8 marks for the mere listing of facts including headings) ADDITIONAL PART: Export promotion can benefit a country’s economy by: = encouraging increases in firms’ size and scale of production since the world market is large, therefore there are no limitations for producers VW = stimulating domestic total production which can lead to export-led economic growth in a country vv = increasing job creation and more secure employment within the country as goods are produced as a result of increased exportsv ¥ = increasing opportunities for training in industrial skills, thus resulting in workers earning increased incomes and standards of living VW = enabling the country’s firms to concentrate on the production of goods on which they have a comparative advantage, therefore more efficient in producingY ¥ = earnings foreign exchange from exports help the country to be able to pay for the importsY ¥ = improving Balance of Payments as export earnings represent money inflows which helps in reducing the chances of deficitsY¥ ¥ (Max.10) (Accept any other correct relevant response) (Allocate a maximum of 2 marks for the mere listing of facts) CONCLUSION A fair balance between protectionism and free trade can help achieve the best results as too much protectionism can make other countries retaliate with higher tariffs V “ (Max. 2) (Accept any other relevant higher-order conclusion) TOTAL SECTION C: 40 GRAND TOTAL: 150 ## Related documents - [Economics Grade 12 NSC P1 QP September 2025 Mpumalanga](https://www.hlayiso.com/library/economics-grade-12-nsc-p1-qp-september-2025-mpumalanga/5449d7a4-548e-416d-91b4-1da462710798) — Economics · QP · 2025 - [Economics Grade 12 NSC P2 QP September 2025 Mpumalanga](https://www.hlayiso.com/library/economics-grade-12-nsc-p2-qp-september-2025-mpumalanga/efbb0e99-1236-496b-bc64-5b31b3784493) — Economics · QP · 2025 - [Economics Grade 12 NSC P1 QP September 2025 Free State](https://www.hlayiso.com/library/economics-grade-12-nsc-p1-qp-september-2025-free-state/4def59dd-ebf4-4191-89e7-2b6d4609d6cc) — Economics · QP · 2025 - [Economics P1 May-June 2025 Afr](https://www.hlayiso.com/library/economics-p1-may-june-2025-afr/e9c77643-7f83-42e3-b28d-cf84e96050ca) — Economics · QP · 2025 · Afr - [ECONOMICS P1 GR12 MEMO SEPT 2023 English](https://www.hlayiso.com/library/economics-p1-gr12-memo-sept-2023-english/2f2dfcd4-99d6-4ca1-b941-aa653985e502) — Economics · Memo · 2023 · Eng - [Economics 2023 MP Prelim P1 Memo](https://www.hlayiso.com/library/economics-2023-mp-prelim-p1-memo/53074720-b0f1-469b-9c4e-f02da85f4b55) — Economics · Memo · 2023 ## More from Grade 12 Economics - [ECONOMICS P2 GR12 QP JCT 2025 AFR D watermark](https://www.hlayiso.com/library/economics-p2-gr12-qp-jct-2025-afr-d-watermark/3dba3588-624d-493b-bc60-00d7e2783cae) — QP · 2025 · Afr - [Economics P2 May-June 2025 Afr](https://www.hlayiso.com/library/economics-p2-may-june-2025-afr/4c93e067-5237-46b7-ab21-5c2cea219788) — QP · 2025 · Afr - [NW 12 ECONOMICS P2 QP ENG JUNE 2025](https://www.hlayiso.com/library/grade-12-economics-2025-nw-june-exam-question-paper-paper-2-english/c80fc8cc-fc9d-44e9-a820-8736783a4556) — QP · 2025 · Eng - [ECONOMICS QP.P1 GR 12 JUNE 2024 (Backup papers)](https://www.hlayiso.com/library/economics-qp-p1-gr-12-june-2024-backup-papers/cb8af277-aab9-4fba-8e76-5924dcaf1941) — QP · 2024 - [ECONOMICS P1 GR12 QP JUNE 2024 Afrikaans](https://www.hlayiso.com/library/economics-p1-gr12-qp-june-2024-afrikaans/c346a16c-1f30-4d4f-bcd0-fc46002d1c9d) — QP · 2024 · Afr - [ECONOMICS P1 GR12 QP SEPT2024 Afrikaans](https://www.hlayiso.com/library/economics-p1-gr12-qp-sept2024-afrikaans/8c1cb29b-6587-4828-ae16-d72e2952b976) — QP · 2024 · Afr ## Collection - [Grade 12 past papers](https://www.hlayiso.com/grade-12/past-papers) --- Hlayiso: free CAPS and IEB past papers, memos, notes and study guides for South African learners. 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