Inflation Economics Grade 12 Questions and Answers. Inflation is an increase in the prices of goods and services. The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households (see Explainer: Inflation and its Measurement).
INFLATION QUESTIONS AND ANSWERS GRADE 12
Activity 1
Study Figure 12.2 below and answer the questions that follow:
- Define the concept inflation. (2)
- When did the inflation rate peak? (2)
- Do we adhere to the inflation target set by government from July 2010–Jan 2011? Supply figures. (4)
- Explain what you would do to lower the inflation rate in our country? (4)
- Which institutions in South Africa make inflation figures available? (2)
- What, according to you, caused the double figures in April–July 2008? (4)
- Why are these figures in the graph not a reflection of hyperinflation? (4)
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Answers to activity 1
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Activity 2
Study the cartoon below and answer the questions that follow:
- What is the message behind the cartoon? (2)
- What is happening to the purchasing power of the money? (2)
- In which country is this woman a consumer? Motivate your answer. (4)
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Answers to activity 2
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Activity 3
Name any THREE fiscal measures to control inflation. (3 × 2) [6]
| Answers to activity 3 Increase direct taxation (personal income tax) if inflation is due to excess demand
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