Download 91403 Sample Assessment Schedule

NCEA Level 3 Economics 91403 (3.5) — page 1 of 6
SAMPLE ASSESSMENT SCHEDULE
Economics 91403 (3.5): Demonstrate understanding of macro-economic influences on
the New Zealand economy
Assessment Criteria
Achievement
Achievement with Merit
Demonstrate understanding typically
involves:
Demonstrate in-depth understanding
typically involves:




providing an explanation of the
current state of the New Zealand
economy in relation to macroeconomic goals
identifying, defining, calculating,
describing or providing an
explanation of macro-economic
influences on the New Zealand
economy
using an economic model(s) to
illustrate concepts relating to
macro-economic influences on
the New Zealand economy

providing a detailed explanation
of macro-economic influences
on the New Zealand economy
using an economic model(s) to
illustrate complex concepts
and/or support detailed
explanations of macro-economic
influences on the New Zealand
economy
Achievement with Excellence
Demonstrate comprehensive
understanding typically involves
comparing and contrasting:

the effectiveness of a
government policy(s) in
achieving macro-economic
goal(s)

the impacts of another macroeconomic influence(s) on the
New Zealand economy in
relation to a macro-economic
goal(s)

integrating an economic
model(s) into detailed
explanations of macroeconomic influences on the
New Zealand economy
NCEA Level 3 Economics 91403 (3.5) — page 2 of 6
Evidence Statement
Achievement
Not Achieved
One
Expected Coverage
NØ
No response; no
relevant evidence.
N1
1/6 requirements for
Achievement met.
N2
2/6 requirements for
Achievement met.
A3
3/6 requirements for
Achievement met.
A4
4/6 requirements for
Achievement met.
Evidence of understanding includes:
(a)
(b)
(c)
(d)
(e)
(f)
Economic growth is calculated using the percentage change in
Real GDP. The figures provided show a growth rate of 2.5%, so
the objective has not been met.
Investment is spending on capital goods.
AD is increased and PLnew and Ynew identified.
(See Appendix One)
The effects on inflation, employment, and output correspond to the
changes made by the candidate to the diagram in (c).
Identifies that savings is income not spent.
Explains fiscal policy OR monetary policy. Fiscal policy involves
changes in government spending and /or revenue to achieve
economic goals. Monetary policy involves influencing levels of
interest rates and money supply to achieve economic goals.
Evidence of in-depth understanding includes:
Investment (I) is a component of aggregate demand. Assuming
ceteris paribus, when I increases AD increases. This causes
price levels to increase to the new equilibrium where AD and AS
intersect. At the new equilibrium, output has increased, which is
economic growth, unemployment has decreased and there is
inflation as price levels have increased.
(e)
Increased savings will lead to financial institutions having more
funds available to lend to firms and consumers. This will lead to
an increase in investment in capital goods and also increased
consumer spending by consumers. Both are components of AD.
An increase in AD leads to an increase in output in the economy
which is economic growth.
(f)
Fiscal policy involves changes in government spending and/or
revenue to achieve economic goals. Fiscal policy could be used
by increasing household disposable incomes through less tax or
more government spending on such things as transfer payments
and Kiwisaver contributions (specific examples not required). This
could encourage saving by leaving households with money left
over to save OR
Monetary policy involves influencing levels of interest rates and
money supply to achieve economic goals. Monetary policy could
be used by increasing interest rates as an incentive to save.
Households may look to save their income rather than spend.
1/3 requirements for
Merit met.
Merit
M5
(d)
M6
2/3 requirements for
Merit met.
Excellence
Evidence of comprehensive understanding in (f) includes comparing and
contrasting the effectiveness of government policies in achieving macroeconomic goals through:
E7
E8
i. AND ii of Excellence.
All requirements for
Excellence met.
i.
Fiscal policy and monetary policy BOTH correctly explained.
ii.
Fiscal policy could be used by increasing household disposable
incomes through less tax or more government spending. This
could encourage saving by leaving households with money left
over to save. Monetary policy could be used by increasing
interest rates as an incentive to save. Households may look to
save their income rather than spend.
NCEA Level 3 Economics 91403 (3.5) — page 3 of 6
iii.
Achievement
Not Achieved
Two
Expected Coverage
NØ
No response; no
relevant evidence.
N1
1/6 requirements for
Achievement met.
N2
A3
A4
Fiscal policy is likely to be more effective as it involves increasing
households’ and firms’ disposable income. Because saving is
income not spent an increase in income is likely to lead to
increased savings. Monetary policy may not be effective, as
increased interest rates causes interest rates on loans and
mortgages to increase; firms and households with debt will be
forced to pay more interest on their debt, leaving less income left
for saving.
Evidence of understanding includes:
(a)
The current account measures: The balance on goods + the balance
on services + the balance on investments + the balance on current
transfers.
2/6 requirements for
Achievement met.
(b)
A balanced current account is where the inflows are equal to the
outflows meaning the balance is zero. The graph shows the current
account is in deficit so the goal has not been met.
3/6 requirements for
Achievement met.
(c)
Links trade agreements with increased exports.
(d)
Shows a decrease in demand for NZD which leads to depreciation of
exchange rate. (See Appendix Two)
(e)
Recognises that depreciation in the $NZ can lead to exports
increasing.
(f)
Explains how exchange rates OR the world economy can affect
economic growth.
4/6 requirements for
Achievement met.
Evidence of in-depth understanding includes:
(c)
Trade agreements remove or reduce barriers to trade between
countries. For New Zealand, trade agreements should open up
markets for exports, which should increase the inflows into the
current account making the current account deficit smaller. However
there may also be increased imports, making the deficit larger.
(e)
A decrease in the demand for the $NZD causes the exchange rate
to depreciate. This either makes New Zealand exports more price
competitive, or New Zealand exporters receive higher returns when
converting export receipts into $NZ. The depreciation causes
imports to become more expensive. As a result inflows of export
receipts should increase, and outflows of import payments will
decrease, and the current account deficit will get smaller as shown in
the graph.
(f)
Detailed explanation of how the world economy OR exchange rates
affect the level of net exports in the economy, which leads to
increase or decrease in AD, which either increases OR decreases
output in the economy. This is either economic growth OR decline.
Merit
M5
1/3 requirements for
Merit met.
Excellence
M6
E7
2/3 requirements for
Merit met.
i. AND ii of
Excellence.
Evidence of comprehensive understanding in (f) includes comparing and
contrasting the impacts of influences on the New Zealand economy
through:
i.
Exchange rates influence the revenue received by NZ exporters and
the price paid by New Zealand importers. When the $NZ
depreciates, the revenue received by New Zealand exporters
NCEA Level 3 Economics 91403 (3.5) — page 4 of 6
increases as the price received for our exports is worth more in $NZ.
The depreciation causes imports to become more expensive. The
net result is an increase in net exports as exports revenue increases
and import payments decrease. This leads to an increase in AD
which is an increase in output. Note – candidates could also explain
this vice versa when the $NZ appreciates.
E8
ii.
The world economy also affects the revenue received for exporters,
as the world economy expands the demand for internationally traded
goods increase causing the world price to rise. This will mean
revenue for NZ exporters will increase which will increase net
exports which is an increase in AD. Note – candidates could also
explain this vice versa for a contraction of the world economy.
iii.
Key difference is that the world economy affects the demand for NZ
goods. Exchange rates influence revenue received for exports and
price paid for imports. The exchange rate affects the revenue
received for exports; demand may not change or the world price may
not change but through exchange rate movements the revenue
received for exports and the price paid for imports will change.
ALL requirements for
Excellence met.
Achievement
Not Achieved
Three
Expected Coverage
NØ
No response; no
relevant evidence.
N1
1/6 requirements for
Achievement met.
N2
2/6 requirements for
Achievement met.
A3
3/6 requirements for
Achievement met.
Evidence of understanding includes:
(a)
(b)
(c)
(d)
(e)
A4
4/6 requirements for
Achievement met.
(f)
Tax cuts increase disposable income, so consumer spending
(C) will increase.
C causes an increase in AD, or increase in C leads to economic
growth
$2 Billion.
Moves AS to left with increase in PL and decrease in Y. (See
Appendix Three)
Identifies that cost of production will increase, which leads to PL
increasing and prices not stable.
Supply side policies are designed to increase the productivity of
producers, and reduce costs of production. Examples:
deregulation, indirect tax cuts, and incentives to invest in new
technology.
Evidence of in-depth understanding includes:
Consumer spending (C) is a component of AD, and when
consumer spending increases because of tax cuts, AD increases.
This leads to an increase in output in the economy which is
economic growth.
(e)
Increases in petrol and electricity prices cause costs of production
for producers to rise, which shifts the AS to the left, causing price
levels to increase. Increases in petrol and electricity are
inflationary so they may cause prices to rise above the target of
1–3% on average over the medium term. This means prices may
not remain stable in the economy.
(f)
Supply side policies are designed to increase the productivity of
producers, and reduce costs of production. Examples:
deregulation, indirect tax cuts, and incentives to invest in new
technology. These increase production (increasing AS) therefore
leading to more output (economic growth).
Merit
M5
(b)
1/3 of requirements for
Merit met.
M6
(b) and (e)
OR
(e) and (f).
NCEA Level 3 Economics 91403 (3.5) — page 5 of 6
Evidence of comprehensive understanding includes comparing and
contrasting the effectiveness of government policies in achieving macroeconomic goals through:
(b) and (f)(i).
Excellence
E7
E8
ALL requirements for
Excellence met.
Appendix One: Question One (c)
(b)
Consumer spending (C) is a component of AD, and when
consumer spending increases because of tax cuts, AD increases.
This leads to an increase in output in the economy which is
economic growth.
(f)(i)
Supply side policies explained with two examples. Supply side
polices enable producers to increase production (increasing AS)
by reducing costs of production or improving productivity,
therefore leading to more output (economic growth).
(f)(ii)
Supply side policies increase AS leading to PL decreasing, so
there is no inflationary effect. Tax cuts lead to economic growth
by increasing AD, which causes PL to increase, which is an
increase in inflationary pressure.
NCEA Level 3 Economics 91403 (3.5) — page 6 of 6
Appendix Two: Question Two (d)
Appendix Three: Question Three (d)