NATIONAL

SENIOR CERTIFICATE

GRADE 12

FOCUSED DISTRICT TEST 2023

CIRCULAR FLOW

MARKS: 120

TIME: 1.5 hours

This question paper consists of 8 pages.

INSTRUCTIONS AND INFORMATION

1. Answer ALL questions as follows:

SECTION A: COMPULSORY
SECTION B: COMPUSORY
SECTION C: COMPUSORY

2. NB: Questions asked in this paper are middle and high order
questions, data response and essay. your responses must comply with
the cognitive requirements of the questions.

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 ALL the questions carefully.

6. Start EACH question on a NEW page.

7. Leave 2–3 lines between subsections of questions.

8. Use only black or blue ink.

9. You may use a non-programmable pocket calculator.

10. Write neatly and legibly.

SECTION A: DATA RESPONSE QUESTIONS THAT CARRY 10 MARKS EACH.

1.1 Study the table below and answer the questions that follow.

NATIONAL ACCOUNT AGGREGATES – SOUTH AFRICA

SUMMARY OF GROSS DOMESTIC PRODUCT R million
(AT CURRENT PRICES) 2016
Compensation of employees 2 051 326
Net operating surplus 1 130 210
Consumption of fixed capital 613 605
Gross value added at factor cost 3 795 141
Other taxes on production 86 008
Other subsidies on production 9 935
Gross value added at basic prices 3 871 214
Taxes on products 484 059
Subsidies on products 16 415
Gross domestic product at market prices (A)?
[Source: Quarterly Bulletin SARB, June 2017]

1.1.1 Identify the factor of production in the table above that receives the
biggest portion of the national income.

1.1.2 Which method was used to calculate the figures above?

1.1.3 Briefly describe the term basic prices.

1.1.4 Briefly explain how subsidies can influence production.

1.1.5 Calculate the gross domestic product at market prices (A).

Show ALL calculations.
2.2 Study the graph below and answer the questions that follow.

MULTIPLIER
Y=E

AGGREGATE DEMAND (BILLIONS)

C+I=500+0.5Y

C=200+0.5Y

500

200

0 400 1000

AGGREGATE OUTPUT, Y
(BILLIONS)

2.2.1 Identify the original consumption function on the graph above. (1)

2.2.2 What is the marginal propensity to consume (mpc) on the above (1)
graph?

2.2.3 Describe the term induced consumption. (2)

2.2.4 How will an increase in government spending affect the size of the (2)
multiplier?

2.2.5 Use the formula K=ΔY/ ΔJ to calculate the multiplier for the above
scenario. (Show all calculations) (2 x 2) (4)
1.3 Study the diagram below and answer the questions that follow.

1.3.1 What is depicted in the diagram above?

1.3.2 Identify ONE example of a real flow.

1.3.3 Briefly describe the term product market.

1.3.4 What could the Minister of Finance do to promote economic

activities in South Africa?
(2)

1.3.5 How can foreign direct investment (FDI) influence the national
income? (2 x 2) (4)
1.4 Study the table below and answer the questions that follow.

FINAL CONSUMPTION EXPENDITURE BY HOUSEHOLDS

AT CURRENT PRICES 2010 2015 2017
(R millions)
Durable goods 136 049 199 971 209 997
Semi-durable goods 133 323 203 082 231 668
Non-durable goods 625 989 962 467 1 124 170
Services 726 476 1 051 760 1 199 221
TOTAL 1 621 836 2 417 271 2 764 397
[Adapted from Quarterly Bulletin South African Reserve Bank, March 2018]

1.4.1 Give ONE example of a non-durable good.

1.4.2 Name ONE other item that is used to calculate GDE.

1.4.3 Briefly describe the term durable goods.

1.4.4 Why are the figures above NOT a true reflection of GDE growth?
(2)

1.4.5 Calculate the percentage contribution of services in the final

consumption expenditure by households in 2017.
(2 x 2) (4)
SECTION B :NB: MIDDLE ORDER QUESTIONS EACH CARRIES 8 MARKS

QUESTION 2 40 MARKS – 30 MINUTES

2.1 Differentiate between money flows and real flows in the circular-flow model.

2.2 Discuss the multiplier and its effects on the national income if the marginal
propensity to consume (MPC) is 0, 6 and investment increases by R10 bn. Show
calculations.

2.3 Differentiate between goods market and factor markets.

2.4 Differentiate between leakages and injections.

2.5 Discuss the interactions between economic participants in a closed economy.

( 5 X 8 ) = 40

TOTAL SECTION B: 40

SECTION C NB : THIS ESSAY IS ONE OF THE SIX ESSAYS IN MACRO ECONOMICS

SECTION C

Answer any ONE of the two questions from this section in the ANSWER BOOK.

Your answer will be assessed as follows:

STRUCTURE OF THE ESSAY MARK

ALLOCATION
Introduction
 A good starting point would be to define a concept or key word that
appears in the question.
 Include other sentences to support the topic.
 Do not include in your introduction any part of the question.
 Do not repeat any part of the introduction in the body.
 Avoid including in the introduction what you will discuss in the body. Max. 2
Body
Main part: Discuss in detail/In-depth discussion/ Examine /Critically
discuss /Analyze/Compare/ Evaluate/Distinguish/
Explain/Assess/Debate
Max. 26
Additional part: Give own opinion/Critically discuss/Evaluate/Critically
evaluate/Draw a graph and explain/Use the graph given and
explain/Complete the given graph/Calculate /Deduce/Compare/Explain/
Distinguish/Interpret/Briefly debate Max. 10
Conclusion Max. 2
Any relevant higher order conclusion that should include:
 A brief summary of what has been discussed / analysed without
repeating facts already mentioned in the body
 An opinion or valued judgement on the facts discussed
 Additional support information to strengthen the discussion /
analysis
 A contradictory viewpoint with motivation, if so required
 Recommendations
TOTAL 40

QUESTION 4 : MACRO ECONOMICS 40 MARKS – 30 MINUTES

 Discuss the role of markets in the circular flow. (26 marks)

 How does the financial sector contribute to the South African economy?
(10 marks)

TOTAL SECTION C: [40]

GRAND TOTAL: 120