JOHANNESBURG SOUTH

GAUTENG DEPARTMENT OF EDUCATION

4-7 FEBRUARY 2022
GRADE 12

ECONOMICS

BUSINESS CYCLES TEST

TIME: 1.5 hours

MARKS: 100

8 pages

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INSTRUCTIONS AND INFORMATION

1. Answer THREE questions as follows in the ANSWER BOOK:

SECTION A: COMPULSORY
SECTION B: COMPULOSRY
SECTION C: COMPULOSRY

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 1–2 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 calculator.

11. Write neatly and legibly.

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SECTION A (COMPULSORY)

QUESTION 1 20 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 write the
letter (A – D) of your choice next to the question number in the ANSWER BOOK.
1.1.1 During a period of…there is a high degree of optimism about the
economy before the economy reaches a peak.
A recession
B recovery
C prosperity
D depression

1.1.2 The … measures the vertical difference between a trough and the
trend line of severe expansion

A high Amplitude
B trend line
C low amplitude
D economic activity

1.1.3 The government applies policies to affect business cycles to ensure

that:

A Periods of contraction last long as possible.

B Inflation and unemployment are as low as possible.
C The troughs and peaks are unstable.
D Periods of expansion last short as possible.

1.1.4 Which of the following is an example of coincident indicator?

A Investment in capital goods

B Employment
C Real exports
D Volume of manufacturing production

1.1.5. The SARB can use a… policy that implies that the forces of supply
and demand determine the currency

A free-floating
B supply-side
C fiscal
D exchange rate (10)

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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.

COLUMN A COLUMN B
1.2.1 Trough A It is used to influence both expansion and
contraction of GDP as a measure of
1.2.2 Economic economic growth.
expansion
B claims that with economic growth comes
1.2.3 Fiscal policy inflation, which in turn should lead to more
jobs and less unemployment.

1.2.4 Philips’s curve

C Used to measure trends in the economy
1.2.5 Paradigm shift

1.2.6 Economic indicator D The lowest point of a depression and a

turning point in a business cycle

E A decrease in unemployment and an

increase in income

F A change in the basic assumptions within the

ruling theory

G Economic activity is at its lowest. Deepening

of the recession
(6 × 1) (6)

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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. Abbreviations,
acronyms and examples will NOT be accepted.

1.3.1 Economic statistics that analyse the performance of the economy

and predict future performances

1.3.2 Shows how an increase in the stock of money can lead to an

increase in the inflation rate and a decrease in the buying power of
money

1.3.3 Encourages achieving stability through sound long-term policy

decisions relating to demand and supply in an economy

1.3.4 last from 7 to 11 years and are caused by changes in net

investments by government and businesses (4x1) 4

TOTAL SECTION A: 20

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SECTION B

Answer ALL questions from this section in the ANSWER BOOK.

QUESTION 2: MACROECONOMICS (COMPULSORY)

2.1 Answer the following questions

2.1.1 Name any TWO supply side policies to smoothing cycles (2 x 1) (2)

2.1.2 How does structural change affect the economy of south Africa?
(1x2) (2)

2.2 Study the following diagram and answer the questions that follow

INTEREST RATES GOES UP IN SOUTH AFRICA

Date Key rates

11/19/2021 3.75%
07/24/2020 3.50%
05/22/2020 3.75
04/15/2020 4.25%
03/20/2020 5.25%
01/17/2020 6.25%
Source: https://countryeconomy.com/key-rates/south-africa

2.2.1 Name the type of business cycles associated with the information (1)
above
2.2.1 Give any other instrument that SARB can use to stimulate the (1)
economy

2.2.3 Briefly describe the term monetary policy (2)

2.2.4 Explain the use of interest rate in the new economic paradigm (2)
2.2.5 How can the supply-side be stimulated by the government?
(2 x 2) (4)

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2.3 Study the following information and answer the questions that follow

EXOGENOUS VS ENDOGENOUS
Weather Money Technological
condtions supply innovations

Consumer Investment
spending spending Production

These factors change regularly

Source: examiner

2.3.1 Which economic sector is mainly affected by structural changes in (1)

the economy

2.3.2 Name any one feature of a business cycles why government must (1)
intervene in the market(economy)

2.3.3 Briefly describe the term economic fluctuations (2)

2.3.4 Explain reasons for the existence of the Kondratieff cycle (2)

2.3.5 Discuss government’s responsibility in exogenous and (4)

endogenous explanation (2 x 2)

2.4 Broadly outline the real business cycle (4 x 2) (8)

2.5 Why does unemployment rise during the recession phase of the business (8)
cycle?
[40]

TOTAL SECTION B: 80

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SECTION C

Answer ONE of the two question from this section 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/ Analyse/Compare/Evaluate/Distinguish/Differentiate/Explain/Draw
a graph and explain/Use the graph given and explain/Complete the given
graph/Assess/Debate
A maximum of 8 marks may be allocated for headings/examples Max. 10
Additional part: Critically discuss/Evaluate/Critically evaluate/Debate/
Deduce/Compare/Distinguish/Interpret/How? /Suggest
A maximum of 2 marks may be allocated for mere listing facts.
Conclusion
Any higher-order conclusion should include: Max. 2
• A brief summary of what has been discussed without repeating facts
already mentioned
• Any opinion or value judgement 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 with reference to non-economic indicators the features

underpinning forecasting business cycle (26 marks)
• Why is inflation targeting important to prevent extreme fluctuation in business
cycles? (10 marks) 40

TOTAL SECTION C: 40

TOTAL: 100

END