Inflation is one of 9 topics in the Grade 12 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. Inflation is best defined as:
A sustained and continuous increase in the general price level of goods and services over time
A one-time increase in the price of a single product
A decrease in the general price level over time
The total value of all goods produced in a year
Answer: A sustained and continuous increase in the general price level of goods and services over time — Inflation refers specifically to a sustained, economy-wide, continuous rise in the general price level, distinct from a single product's price changing for its own reasons.
Easy
2. In South Africa, inflation is officially measured using which index, compiled monthly by Statistics South Africa?
The Consumer Price Index (CPI)
The Gross Domestic Product (GDP) index
The Johannesburg Stock Exchange (JSE) index
The exchange rate index
Answer: The Consumer Price Index (CPI) — The Consumer Price Index (CPI), compiled monthly by Statistics South Africa, tracks the cost of a representative basket of goods and services to measure inflation.
Medium
3. The CPI is 118 this year and was 112 in the same month last year. Calculate the annual inflation rate as a percentage, to 2 decimal places, using [(CPI this year - CPI last year)/CPI last year] x 100.
Answer: 5.36 — Inflation rate = [(118-112)/112] x 100 = (6/112) x 100 ≈ 5,36%.
