Grade 12 · CAPS

Grade 12 Foreign Exchange Markets

Economics practice questions and a worked example

Why countries trade, how the balance of payments records that trade, and how the foreign exchange market sets the rand's value are all part of this Grade 12 topic -- built here from a real SARB trade-balance chart showing South Africa's actual exports and imports over four years.

Worked example

2.2.3 Briefly describe the term trade balance.

Answer

The difference between visible (tangible) exports and visible (tangible) imports.

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Foreign Exchange Markets

Question 1 of 3

1.1.1 A deliberate action by the government to increase the value of a currency is known as ...
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More practice questions

Explore additional Grade 12 Foreign Exchange Markets questions.

  • 2
    2.2.2 Name the account in the balance of payments (BOP) that records portfolio investments.
  • 3
    2.2.4 Explain the impact of electricity shortages on export volumes in South Africa.
  • 4
    2.2.5 How can the South African Reserve Bank (SARB) reduce balance of payments deficit?
  • 5
    2.4 Briefly discuss specialisation and mass production as effects of international trade.

Common mistakes

  • Confusing a trade deficit (imports exceed exports) with a weakening currency -- the two are related but not automatic; a deficit is one of several pressures that can affect the exchange rate, not a guaranteed cause of depreciation on its own.

More Grade 12 Economics topics

Aligned to CAPS Grade 12 Economics — Foreign Exchange Markets. Curriculum source: CAPS for the FET Phase, Department of Basic Education.

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