ECONOMICS P1 GR12 QP JUNE 2023_English_hlayiso.com_.pdf

Downloaded from hlayiso.com NATIONAL SENIOR CERTIFICATE GRADE 12 JUNE 2023 ECONOMICS P1 MARKS: 150 TIME: 2 hours This question paper consists of 13 pages.

Downloaded from hlayiso.com 2 ECONOMICS P1 (EC/JUNE 2023) INSTRUCTIONS AND INFORMATION 1. Answer FOUR questions as follows in the ANSWER BOOK: SECTION A: COMPULSORY SECTION B: Answer any 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. Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ECONOMICS P1 3 SECTION A (COMPULSORY) 30 MARKS – 20 MINUTES QUESTION 1 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 to 1.1.8) in the ANSWER BOOK, for example 1.1.9 D. 1.1.1 National income will increase when … A I + G + X = S + T + M. B I + G + X > S + T + M. C I + G + X < S + T + M. D I + G + X – S + T + M. 1.1.2 One of the biggest challenges when calculating the national income figures is ... A double counting. B the residual item. C compensation of employees. D net income. 1.1.3 The exchange rate system whereby market forces have absolute control is called the … exchange rate system. A fixed B free floating C managed floating D absolute 1.1.4 Aggregate supply in the economy can be stimulated by … A increasing the costs. B improving inefficiency of inputs. C maintaining the same costs. D improving the efficiency of markets. 1.1.5 The institution that provides parliament with annual written reports on the standard of financial management of each government department: A Treasury control B Ministerial responsibilities C Auditor-general D Parliamentary questioning Copyright reserved Please turn over

Downloaded from hlayiso.com 4 ECONOMICS P1 (EC/JUNE 2023) 1.1.6 Public goods where free-riders are excluded through fees, charges or tolls are … goods. A collective B private C community D consumables 1.1.7 When a currency is …, interest rates can be decreased which will result in an outflow of foreign currency. A overvalued B depreciated C undervalued D appreciated 1.1.8 The typical fluctuations of a business cycle will be a/an … A upswing – downswing – trough – peak. B peak – downswing – upswing – trough. C peak – upswing – trough – downswing. D downswing – trough – upswing – peak. (8 x 2) (16) Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ECONOMICS P1 5 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 numbers (1.2.1 to 1.2.8) in the ANSWER BOOK. COLUMN A COLUMN B 1.2.1 Progressive tax A purchase of assets such as shares or system bonds, where the investor is interested only in the expected financial return on the investment 1.2.2 National account B measured from peak to peak or trough aggregates to trough 1.2.3 Amplitude C shows the government’s projected income and expenditure for three years 1.2.4 Portfolio D levied according to the amount earned investments 1.2.5 Medium-term E international guidelines for developing expenditure and reporting statistics comparable framework across countries 1.2.6 Special drawing F studies the behaviour and performance rights of an economy as a whole 1.2.7 System of National G difference in the value of total output accounts between a peak and a trough 1.2.8 Macroeconomics H an international reserve asset created by the IMF to supplement the official reserves of its member countries. I a summary of a country’s the economic activity of production, income and expenditure (8 x 1) (8) Copyright reserved Please turn over

Downloaded from hlayiso.com 6 ECONOMICS P1 (EC/JUNE 2023) 1.3 Give ONE term for each of the following descriptions. Write only the term next to the question numbers (1.3.1 to 1.3.6) in the ANSWER BOOK. Abbreviations, acronyms and examples will NOT be accepted. 1.3.1 A small initial increase in spending produces a proportionately larger increase in aggregate national income 1.3.2 An indication of the general direction of the economy 1.3.3 The action by the South African Reserve Bank to occasionally change the balance that banks are required to maintain. 1.3.4 A deliberate downward adjustment to the value of a country’s currency, relative to another currency 1.3.5 A model which shows the relationship between tax rates and tax revenue 1.3.6 A government policy that uses government expenditure and taxes to influence economic activity (6 x 1) (6) TOTAL SECTION A: 30 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ECONOMICS P1 7 SECTION B QUESTION 2: MACROECONOMICS 40 MARKS – 30 MINUTES 2.1 Answer the following questions. 2.1.1 Name TWO turning points of a business cycle. (2) 2.1.2 How can a larger marginal propensity to save (mps) affect the size of the multiplier? (2) 2.2 Study the table below and answer the questions that follow. NATIONAL INCOME ACCOUNTS OF SOUTH AFRICA R millions 2020 2021 Compensation of employees 2 678 050 2 861 309 Net operating surplus 1 493 978 1 795 000 Consumption of fixed capital 752 613 797 230 Gross value added at factor cost 4 924 641 5 453 539 Other taxes on production 118 022 131 563 Other subsidies on production 13 088 12 494 A 5 029 575 5 572 608 Taxes on products 541 457 633 854 Subsidies on products 14 116 13 965 Gross domestic product at market prices 5 556 916 B [Adapted from SARB QB, December 2021] 2.2.1 What method of calculation is used in the table above to determine the gross domestic product? (1) 2.2.2 Name the missing item labelled (A). (1) 2.2.3 Briefly describe the term subsidies on production. (2) 2.2.4 How would you convert GDP to GNP? (2) 2.2.5 Calculate the value of GDP at market prices for 2021 (B). Show all calculations. (4) Copyright reserved Please turn over

Downloaded from hlayiso.com 8 ECONOMICS P1 (EC/JUNE 2023) 2.3 Study the information below and answer the questions that follow. The President of South Africa has announced that the Department of Energy would take over Eskom. There was an attempt to privatise Eskom and the entire industry in the late 90s but this was abandoned as no private company wanted to compete with unsustainable and unprofitable electricity prices backed by taxes and debt. [Adapted from news24.net] 2.3.1 Name the parastatal referred to in the above information. (1) 2.3.2 Who is indirectly responsible for bailing out state-owned enterprises in South Africa? (1) 2.3.3 Briefly describe the concept privatisation. (2) 2.3.4 Explain inefficiencies as a feature of public sector failure. (2) 2.3.5 How could state-owned enterprises contribute towards expanding the economy? (4) 2.4 Briefly discuss leading and co-incident indicators as features under-pinning forecasting. (8) 2.5 How can South Africa reduce imports in order to correct the Balance of Payment (BOP) deficit? (8) [40] Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ECONOMICS P1 9 QUESTION 3: MACROECONOMICS 40 MARKS – 30 MINUTES 3.1 Answer the following questions. 3.1.1 Name any TWO problems of public sector provisioning. (2) 3.1.2 What is the significance of a surplus on the current account of the balance of payment? (2) 3.2 Study the information below and answer questions that follow. Years 2018 2019 Quarters Q1–4 Q1 Q2 Q3 Q4 Current account R bn R bn R bn R bn R bn items Exported goods 1176 1193 1233 1258 1260 Net gold exports 72 56 50 70 93 Service receipts 210 208 213 215 215 Income receipts 97 123 106 117 121 Current transfers -35 -36 -35 -36 -36 Imported goods 1223 1207 1314 1284 1250 Service payments 218 221 229 226 230 Income payments 251 266 230 303 241 [Adapted from SARB QB, December 2019] 3.2.1 Give the economic concept illustrated in the table above. (1) 3.2.2 Which current account item is used for recording donations? (1) 3.2.3 Briefly describe the term trade balance. (2) 3.2.4 Why are net gold export figures positive in South Africa? (2) 3.2.5 Calculate the balance on the current account for the second quarter of 2019. Show ALL calculations. (4) Copyright reserved Please turn over

Downloaded from hlayiso.com 10 ECONOMICS P1 (EC/JUNE 2023) 3.3 Study the graph below and answer the questions that follow. [Source: Enjoy Economics, p56] 3.3.1 Provide a name for the graph given above. (1) 3.3.2 What is the original natural rate of unemployment in the graph above? (1) 3.3.3 Briefly describe the term new economic paradigm. (2) 3.3.4 Explain how the government can use its fiscal policy to speed up the recovery of an economy. (2) 3.3.5 With the aid of a graph, illustrate the effect of demand-side and supply side policies in smoothing out business cycles. (4) 3.4 Explain the effect of an increase in mass production on international trade. (8) 3.5 How can a recession negatively affect the different economic participants? (8) [40] Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ECONOMICS P1 11 QUESTION 4: MACRO ECONOMICS 40 MARKS – 30 MINUTES 4.1 Answer the following questions. 4.1.1 Name any TWO instruments of the monetary policy. (2) 4.1.2 How can ineffectiveness result in public sector failure? (2) 4.2 Read the extract below and answer the questions that follow. BUSINESS CYCLES Economies can be disturbed by many factors which can result in downswings and it can also go through periods of growth and prosperity. Countries have to find ways to deal with business cycles in order to achieve stable economies. [Source: www. https://www.econlib.org/library/Enc/BusinessCycles.html] 4.2.1 Name the period of business cycle during which the level of economic activities increases. (1) 4.2.2 Mention ONE type of a business cycle. (1) 4.2.3 Briefly describe the concept business cycle. (2) 4.2.4 How can natural disasters influence fluctuations in business cycles? (2) 4.2.5 How has the Keynesian (endogenous) school of thought influenced business cycles? (4) Copyright reserved Please turn over

Downloaded from hlayiso.com 12 ECONOMICS P1 (EC/JUNE 2023) 4.3 Study the information below and answer questions that follow. SOUTH AFRICA: TERMS OF TRADE 2022 Month Index of import Index of Terms of Trade prices export prices January 108,2 102,9 95,1 February 107,9 105,4 97,6 March 107,7 109,7 A [Adapted from https://www.statssa.gov.za/publications/P01427/P01427March2022.pdf] 4.3.1 Identify the institution responsible for publishing the data above. (1) 4.3.2 What is the trend in the index of import prices? (1) 4.3.3 Briefly describe the concept terms of trade. (2) 4.3.4 What can bring an improvement in the country’s terms of trade? (2) 4.3.5 Calculate the terms of trade for March 2022 (A). Show ALL calculations. (4) 4.4 Briefly discuss absolute and comparative advantage as supply reasons for international trade. (8) 4.5 Why is price stability important to prevent extreme fluctuations in business cycles? (8) [40] TOTAL SECTION B: 80 Copyright reserved Please turn over

Downloaded from hlayiso.com (EC/JUNE 2023) ECONOMICS P1 13 SECTION C Answer any ONE question of the TWO questions in the ANSWER BOOK. Your answer will be assessed as follows: MARK STRUCTURE OF ESSAY ALLOCATION Introduction The introduction is a lower-order response. Max. 2 • A good starting point would be to define the main concept related to the question topic. • Do NOT include any part of the question in your introduction. • Do NOT repeat any part of the introduction in the body. • Avoid mentioning in the introduction what you are going to discuss in the body. Body Main part: Discuss in detail/In-depth discussion/Examine/Critically Max. 26 discuss/Compare/Evaluate/Distinguish/Differentiate/Explain/Assess/ Debate/Draw a graph and explain/Use the graph given and explain/ Complete the given graph Max. 10 Additional part: Give own opinion/Critically discuss/Evaluate/ Critically evaluate/Deduce/Compare/ Distinguish/Interpret/Briefly debate/How/Suggest/Analyse Conclusion Any higher-order conclusion should include: • A brief summary of what has been discussed without repeating Max. 2 facts already mentioned • Any opinion or value judgment on the facts discussed • Additional support information to strengthen the discussion/ analysis • A contradictory viewpoint with motivation, if required • Recommendations TOTAL 40 QUESTION 5: MACROECONOMICS 40 MARKS – 40 MINUTES • Discuss in detail the markets within the four-sector model. (26 marks) • How can the business sector contribute more positively to the economy? (10 marks) [40] QUESTION 6: MACROECONOMICS 40 MARKS – 40 MINUTES • Discuss in detail the main objectives of the public sector in the economy. (26 marks) • How effective is the South African government in achieving full employment? (10 marks) [40] TOTAL SECTION C: 40 GRAND TOTAL: 150 Copyright reserved Please turn over