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STAGE 2 ECONOMICS
ASSESSMENT TYPE 1: SKILLS AND APPLICATIONS TASK
Task 2: Macroeconomics test
Purpose
This task gives you the opportunity to use, interpret, evaluate, and reflect on a selection and
range of primary and secondary sources in relation to economic issues.
Description of assessment
The question paper provided presents an extract from a country’s economic report, and asks
you to answer questions related to it.
Assessment conditions
This assessment is a closed book test. Answers should be written on the question paper in
spaces provided.
The test should take 50 minutes.
Learning Requirements
1.
know, understand,
communicate, and apply
economic concepts, principles,
models, and skills
2.
explain the role of economic
systems in dealing with the
economic problem of scarcity
3.
evaluate the effects of
interdependence on individuals,
business, and governments
locally, nationally, and globally
4.
evaluate and explain the way in
which economic decisions
involve costs and benefits
5.
critically analyse and evaluate
economic issues and events
(past and current) using
economic models and the skills
of economic inquiry
6.
critically analyse and evaluate
the impact of economic change
locally, nationally, and globally.
Assessment Design Criteria
Knowledge and Understanding
The specific features are as follows:
KU1 Knowledge, understanding, and application of
economic concepts, principles, models, and skills.
KU2 Understanding of the role of economic systems in
dealing with the economic problem of scarcity.
Analysis and Evaluation
The specific features are as follows:
AE1 Analysis and evaluation of economic issues and
events (past and current) using economic models and
the skills of economic inquiry.
AE2 Evaluation of the effects of interdependence on
individuals, business, and government, locally,
nationally, and globally.
AE3 Analysis and evaluation of the impact of economic
change locally, nationally, and globally.
AE4 Evaluation of the way in which economic decisions
involve costs and benefits.
Communication
The specific features are as follows:
C1
Communication of economic principles, models, and
concepts.
C2
Use of economic terminology.
Knowledge and
Understanding
Knowledge,
understanding, and
application of
economic concepts
principles, models
and skills are
addressed in a), b) i,
and ii, c), d) and f).
Analysis and
Evaluation
Evaluation of the
effects of
interdependence on
individuals, business
and government,
locally, nationally and
globally is addressed
in b) iii and e) and g).
Analysis and
Evaluation
Evaluation of the way
in which economic
decisions involve
costs and benefits is
addressed in f) iv and
g).
Communication
Communication of
economic principles,
models and concepts
is addressed in a) ii,
b) i, c) i, ii, e) and g).
Communication
Use of economic
terminology is
addressed in all
written responses.
Page 1 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010
Performance Standards for Stage 2 Economics
A
Knowledge and Understanding
Analysis and Evaluation
Communication
Comprehensive knowledge, in-depth
understanding, and focused application of
complex economic concepts, principles,
models, and skills.
Astute and logical analysis and evaluation of
economic issues and events (past and current)
using economic models and the skills of economic
inquiry.
Sophisticated communication of economic
principles and models, and complex
concepts.
Comprehensive and well-informed
understanding of the role of economic
systems in dealing with the economic
problem of scarcity.
Perceptive evaluation of the effects of
interdependence on individuals, business, and
government locally, nationally, and globally.
Consistent, clear, and appropriate use of
correct economic terminology.
Incisive analysis and evaluation of the impact of
economic change locally, nationally, and globally.
Insightful and well-informed evaluation of the way in
which economic decisions involve costs and
benefits.
B
Some depth of knowledge and
understanding, and focused application, of
a variety of economic concepts, principles,
models, and skills.
Well-considered analysis and evaluation of
economic issues and events (past and current)
using economic models and the skills of economic
inquiry.
Well-informed understanding of the role of
economic systems in dealing with the
economic problem of scarcity.
Well-considered evaluation of the effects of
interdependence on individuals, business, and
government locally, nationally, and globally.
Clear and accurate communication of
economic principles and models, and a
variety of concepts.
Clear and appropriate use of economic
terminology.
Well-informed analysis and evaluation of the impact
of economic change locally, nationally, and
globally.
Well-informed evaluation of the way in which
economic decisions involve costs and benefits.
C
Considered knowledge and
understanding, and competent
application, of economic concepts,
principles, models, and skills.
Considered analysis and evaluation of economic
issues and events (past and current) using
economic models and the skills of economic
inquiry.
Informed understanding of the role of
economic systems in dealing with the
economic problem of scarcity.
Considered evaluation of the effects of
interdependence on individuals, business, and
government locally, nationally, and globally.
Competent communication of some
economic principles, models, and
concepts.
Appropriate use of economic terminology.
Informed analysis and evaluation of the impact of
economic change locally, nationally, and globally.
Informed evaluation of the way in which economic
decisions involve costs and benefits.
D
Superficial understanding and partial
application of some basic economic
concepts, principles, models, and skills.
Basic consideration and description of one or more
economic issues and/or events (past and current)
using some skills of economic inquiry.
Some recognition of the role of economic
systems in dealing with the economic
problem of scarcity.
Basic consideration and description of one or more
of the effects of interdependence on individuals,
business, and government locally, nationally, and
globally.
Communication of some basic economic
principles, models, and concepts.
Some appropriate use of some economic
terminology, with inconsistencies.
Recognition of aspects of the impact of economic
change locally, nationally, and globally.
Some awareness of the way in which economic
decisions involve costs and benefits.
E
Identification and attempted application of
one or more basic economic concepts,
principles, models, or skills.
Emerging awareness of one or more economic
issues or events (past and current), with limited use
of skills of economic inquiry.
Attempted communication of one or more
simple economic principles, models, or
concepts.
Limited recognition of the role of economic
systems in dealing with the economic
problem of scarcity.
Limited recognition of one or more of the effects of
interdependence on individuals, business, and
government locally, nationally, and globally.
Limited use of economic terminology.
Emerging recognition of an aspect of the impact of
economic change locally, nationally, and globally.
Limited awareness of the way in which economic
decisions involve costs and benefits.
Page 2 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010
This test, an extract from a country’s economic report, gives you the opportunity to
use, interpret, evaluate, and reflect on a selection and range of primary and
secondary sources in relation to economic issues.
Answers should be written in spaces provided. The test should take 50 minutes.
Economic Report
Cash rate
Inflation rate
Retail sales
Change in consumer sentiment
Capital inflows
Exchange rate (against US$)
Dec.
2007
4.5%
3%
$400bn
3%
$65bn
80c
Mar. 2008
5.2%
3.6%
$405bn
2%
$69bn
85c
June
2008
5.6%
4.2%
$410bn
-1%
$75bn
90c
Sept. 2008
6%
4.2%
$405bn
-8%
$78bn
95c
AD-AS diagram representing economic conditions in September 2008
The government has highlighted low rates of unemployment as its main achievement.
However, the opposition has criticised the government for not using the correct policy mix to
achieve its macroeconomic objectives and has argued that supply management policies
should be implemented to achieve these objectives. A university economics professor has
supported the call for the use of supply management policies, arguing that the short-term
costs of implementing such policies could be overcome. However, he pointed out that
whatever the government does, it will experience a range of problems, such as the limitations
of available measurement and institutional and political factors. He also pointed out that the
expenditure multiplier effect must be considered by the government when making policy
decisions.
Page 3 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010
(a)
Refer to the aggregate demand – aggregate supply (AD-AS) diagram above.
(i) Which one of the following types of unemployment would not occur in
September 2008 in the economy represented in this diagram? Tick the
appropriate box.
Frictional unemployment
Structural unemployment
Seasonal unemployment
Cyclical unemployment
(1 mark)
(ii) With reference to the AD-AS diagram, explain one economic reason why the
state of the economy in September 2008 is not desirable.
(2 marks)
(b)
(i) Using information from the table on page 1, state one factor that could have
caused the change in the exchange rate from December 2007 to September
2008.
(1 mark)
(ii) Illustrate, on the following diagram, the effect on the exchange rate of the factor
you stated in part (b)(i).
Page 4 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010
(iii)
List two possible effects on the economy of the change in the exchange rate from
December 2007 to September 2008.
Effect 1:
Effect 2:
(2 marks)
(c)
(i) With reference to the table on page 1, identify one:
(1)
leading indicator of economic performance.
(1 mark)
(2)
lagging indicator of economic performance.
(1 mark)
(ii) Explain how a government could use leading and lagging indicators of economic
performance to achieve its macroeconomic objectives.
Leading indicators:
(1 mark)
Lagging indicators:
(1 mark)
(d)
Why is knowledge of the expenditure multiplier effect important to a government
when making policy decisions?
(2 marks)
Page 5 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010
(e)
Present an argument for the most appropriate monetary policy response by the
government to the state of the economy in September 2008, as described in the
economic report on page 1.
(5 marks)
(f)
(i) What are supply management policies?
.
(1 mark)
(ii) State one example of a supply management policy.
(1 mark)
(iii) Refer to the following AD-AS diagram, which has been reproduced from the
economic report on page 6. It represents the country’s economic conditions in
September 2008.
On the diagram above, illustrate the long-term impact on this economy of
implementing supply management policies.
(1 mark)
Page 6 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010
(iv)
State one example of a short-term cost of implementing supply management
policies.
(1 mark)
(g)
Explain why each of the following is regarded as a problem of economic
management:
(i) Limitations of available measurement.
(2 marks)
(ii) Institutional and political factors.
(2 marks)
Page 7 of 7
Stage 2 Economics annotated task for use from 2011
565329925 (October 2010)
© SACE Board of South Australia 2010