TERM 1 TEST

SECTION A
QUESTION 1
1.1 There are 3 possible options provided for the following questions. Choose the
correct answer and write only the letter (A C) next to the question number.
1.1.1 Economic models can be used to simplify as well as to
A. Make economic forecasts
B. To differentiate between economic concepts
C. Support economists with different studies
(1)
1.1.2 The following economic activity occurs in the secondary sector.
A. Exploitation
B. Manufacturing
C. Services
(1)
1.1.3 The question: How does a firm decide how much of an item to produce?,
refers to
A. Microeconomics
B. Macroeconomics
C. Normative economics
(1)
1.1.4 This sector comprises of all these enterprises that are not legally registered
and whose production is not recorded.
A. Tertiary sector
B. Informal sector
C. Formal sector
(1)
1.1.5 There are participants in an open economy.
A. Four
B. Three
C. Five
(1)
1.1.6 The real flow will always be in the direction.
A. Same
B. Opposite

C. Downward
(1)
1.1.7 An example of a leakage is
A. Exports
B. Imports
C. Government spending
(1)
1.1.8 An indicator that will change at the same time as quantity of output
change, is called a
A. Leading indicator
B. Coincident indicator
C. Lagging indicator
(1)
1.1.9 The difference between the amount of economic activity at the peak of the
cycle and the trough is called the
A. Gradient
B. Length of the business cycle
C. Amplitude
(1)

1.1.10 The capacity of the economy to produce more goods and services is
called
A. Economic growth
B. Economic development
C. Production
(1)
(10 X 1) (10 marks)
TOTAL SECTION A: 10 MARKS

SECTION B
QUESTION 2
2.1 Indicate if the following statements are TRUE or FALSE:

2.1.1 Normative statements focus on what should be.

(2)
2.1.2 Production can be defined as the absorption of utilities.
(2)
2.1.3 The link between producers and retailers is the wholesaler.
(2)
2.1.4 During a downswing, prices tend to increase.
(2)
(4X 2) (8 marks)

2.2 Name any THREE branches of economics.

(3 X 2)
(6 marks)

2.3 Study the table below and answer the questions that follow:
2.3.1 Calculate the contribution of the primary sector in 2003 (in R billion).
(3)
2.3.2 Calculate GDP @ basic price for 2009.
(3)
2.3.3 Which sector made the second largest contribution to the GDP @ basic
prices in 2009? (2)
2.3.4 Define GDP
(2)
(10 marks)

Table 1 The composition of the GDP for 2003 and 2009

1
1.1
1.2
2
2.1
2.2
2.3
3

Primary sector
Agricultural, Forestry
Mining
Secondary sector
Manufacturing
Electricity, gas and water
Construction
Tertiary sector

Value added (in R

billion)
2003
2009
?
126
20
42
32
84
122
275
92
222
16
27
?
26
?
733

3.1

3.2
3.3

3.4
4

Wholesalers and retailers,

restaurants and
accommodation
Transport, storage and
communication
Financial intermediates,
insurance, fixed property and
business services
Community, social and
personal services
GDP @ basic prices

62

158

62

158

71

228

95

237

440

??

2.4 Differentiate between endogenous and exogenous reasons for a business

cycle. (8)
2.5 Discuss the difference as well as the importance of GDP and GNI respectively.
(8)

TOTAL
MARKS: 50