International

Foreign exchange market

The rand's price against the dollar is set by demand and supply of rands. Appreciation means the rand buys more foreign currency, and depreciation means it buys less.

CAPS

Grade 12 · Economics · International

Economics wants the concept, then the diagram or the data, then the consequence.

The papers
Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.
How to write it
Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.
How a marker reads it
A common mix-up is thinking appreciation helps exporters, when exporters receive fewer rands for the same dollar price after the rand strengthens.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

Worked theory

Worked theory. Say the rate is R18 to the dollar, and then the rand moves to R16 to the dollar. That move is an appreciation, because one dollar costs fewer rands. An importer in Johannesburg bringing in laptops priced at 500 dollars pays R8 000 instead of R9 000. An apple exporter in the Western Cape who receives the same 500 dollars now converts them to R8 000 instead of R9 000, so the exporter earns fewer rands. The figures are a teaching rate, not a live quote. Appreciation helped the laptop buyer and reduced the apple farmer's rand revenue.

More worked examples

Pretoria dollar booking
Say the rate is R18 to the dollar when a family in Pretoria prices a trip, and R20 to the dollar when they pay. The rand has depreciated, so a 1 000 dollar booking rises from R18 000 to R20 000. They must offer more rands to buy the same dollars. Depreciation made the foreign trip more expensive in rands. A local weekend priced only in rands did not change for that reason.
Stellenbosch euro invoice
A wine estate in Stellenbosch is paid in euros and converts them to rands. Say the rand appreciates against the euro, so each euro becomes fewer rands than last season. The foreign buyer may find the wine slightly cheaper in euros, which can raise demand for South African wine and for rands. The estate still banks fewer rands per bottle until volumes rise enough to offset the rate. One appreciation has a buyer side and a seller side.

In ordinary words

Foreigners demand rands when they want South African goods, assets or travel, and they offer foreign currency to get those rands, while South Africans supply rands when they want imports or foreign assets. If demand for rands rises, the rand appreciates, and if demand for rands falls, it depreciates. An importer then pays fewer rands for a foreign-priced good when the rand is stronger, and an exporter who is paid in dollars receives fewer rands for each dollar after that same strengthening. One move helps the importer and hurts the exporter's rand revenue.

In South Africa

A Johannesburg laptop shipment and a Western Cape apple packhouse are looking at the same dollar on the same day.

Part 1 / 4

What it is

The rand's price against the dollar is set by demand and supply of rands. Appreciation means the rand buys more foreign currency, and depreciation means it buys less.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

The rand weakens from R17/$ to R19/$. A US tourist has $1 000. How many more rand does she get?

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: The rand weakens from R17/$ to R19/$. A US tourist has $1 000. How many more rand does she get?

Before any working — hunt first

Given

Numbers and units already in the sentence: R17/ · R19/ · 1 · 000. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: How many more rand does she get. Circle that word — that is the missing variable.

Find

We are required to find: How many more rand does she get. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Multiply. Then substitute the given, one line at a time, to get How many more rand does she get.

In other words — as if you have never seen this before

If you have never seen this before: Multiply. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

R17 → R19 per $.

3. Which method — and why this one?

Multiply.

4. Step-by-step working

01 / 05
Multiply
Before 17 000; after 19 000.
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
02 / 05
Subtract
R2 000 more.
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
03 / 05
Step G — Sense-check the size
Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.
Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.
04 / 05
Step F — Box the answer with its unit
R2 000 more.
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
05 / 05
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

R2 000 more.

Copy onto your answer sheet — in this order

Answer: R2 000 more.

6. Check it like a marker

Weak rand helps tourism and exports.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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