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Grade 12 Economics entrance exam, 2016 E.C. (2024)

Real questions from the Grade 12 university entrance exam in Economics, as students sat it in 2016 E.C. Every question comes with the correct answer and a worked explanation.

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  • Social science stream

    Who sits it

  • 2016 E.C. (2024)

    Exam year

  • 78 questions with answers

    In this set

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Answer each question yourself before opening the answer. The explanations point to the exact place in the textbook, so you know which page to reread when you miss one.

Question 1

Which one of the following represents the increase in the quantity supplied of real GDP due to the increase in the price level?

  1. A.The right wards shifts of the aggregate supply curve
  2. B.The left wards shifts of the aggregate supply curve
  3. C.The downwards movements along the aggregate supply curve
  4. D.The upwards movements along the aggregate supply curve
Show the answer and explanation

Answer: D The upwards movements along the aggregate supply curve

Why

A change in the price level causes a movement along the aggregate supply curve. An increase in the price level leads to an upward movement along the curve, representing an increase in the quantity of real GDP supplied.

Question 2

When the economy is in the long run, which of the following is correct?

  1. A.Sticky wages and workers misperception still holds true.
  2. B.What the economy produces is the full employment real GDP.
  3. C.The short run and the long run real GDP will be the same.
  4. D.The level of real GDP the economy produces is less than the natural real GDP.
Show the answer and explanation

Answer: B What the economy produces is the full employment real GDP.

Why

In the long run, prices and wages are fully flexible, and the economy operates at its potential level of output, which is the full-employment real GDP (or natural real GDP).

Question 3

What is the pressure on price when the quantity demanded of real GDP is greater than the quantity supplied of real GDP during the short run?

  1. A.The price level rises
  2. B.The price level drops
  3. C.No pressure at all
  4. D.Initially downwards
Show the answer and explanation

Answer: A The price level rises

Why

When the quantity demanded of real GDP exceeds the quantity supplied, there is a shortage in the economy, which puts upward pressure on prices, causing the price level to rise.

Question 4

Which one of the following is correct about the economy when it is in long run equilibrium?

  1. A.The economy produces the real GDP which is called the natural real GDP.
  2. B.The short run aggregate demand curve intersects the short run aggregate supply curve.
  3. C.The long run aggregate demand curve intersects the short run aggregate supply curve.
  4. D.Price temporarily deviates from equilibrium even if aggregate demand and aggregate supply remain unchanged.
Show the answer and explanation

Answer: A The economy produces the real GDP which is called the natural real GDP.

Why

In long-run macroeconomic equilibrium, the economy produces at its potential level of output, which is also known as the natural real GDP, where the AD, SRAS, and LRAS curves intersect.

Question 5

Which of the following represents an economic situation where there is an inefficient distribution of goods and services in the free market?

  1. A.Externalities
  2. B.Asymmetric information
  3. C.Market failure
  4. D.Free riding
Show the answer and explanation

Answer: C Market failure

Why

Market failure is defined as an economic situation where the allocation of goods and services by a free market is not Pareto efficient, often due to externalities, public goods, or asymmetric information.

Question 6

What impacts on our aggregate demand do you expect if the level of economic activities in other countries increase?

  1. A.Aggregate demand will increase.
  2. B.Aggregate demand will decrease.
  3. C.Aggregate demand remains unaffected.
  4. D.Aggregate demand first declines and then rises.
Show the answer and explanation

Answer: A Aggregate demand will increase.

Why

An increase in the economic activities of foreign nations increases their income, leading to an increase in their demand for our exports, which shifts our aggregate demand curve to the right.

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Economics papers from other years

2018 E.C. (2026)2017 E.C. (2025)2012 E.C. (2020)2011 E.C. (2019)

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Are these the real 2016 E.C. Economics entrance exam questions?

Yes. They come from the national university entrance exam in Economics that students sat in 2016 E.C. (2024). Our set holds 78 of its questions, each with its answer and an explanation that points back to the textbook.

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Can I download the Economics 2016 E.C. paper as a PDF?

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