Download NCEA Level 3 Economics (90632) 2012

NCEA Level 3 Economics (90632) 2012 — page 1 of 7
Assessment Schedule – 2012
Economics: Describe aggregate economic activity (90632)
Evidence Statement
The following Economics-specific marking conventions are used in this assessment schedule:
• I
means identify
• E
means explain
• Q
means refer to the question
Question
Evidence
ONE
Achievement
Any THREE correct:
See Appendix One.
• Graph One showing
recessionary gap
(b)
$36 238 m
• Correct calculation of
GDP
(c)
$31 293 m or $31 294 m
(d)
See Appendix Two.
(e)
Suitable event to increase AS:
(a)
• improved productivity
• lower oil / electricity / food input costs (needs to impact
on whole economy)
• lower (nominal) wages / costs
• lower imported raw material costs (due to strong
dollar).
• Correct calculation of
Real GDP
• Graph One altered to
show small rise in Y
and fall in PL – AS
increase
• Correct event to
increase AS.
Achievement
with Merit
Achievement
with Excellence
Code
A1
NCEA Level 3 Economics (90632) 2012 — page 2 of 7
Question
Evidence
TWO
(a)
(b)
The terms of trade measures the quantity
of imports that a given volume of exports
will buy.
I – Trade surplus require X receipts > M
payments
E –Increasing terms of trade means that
our export prices are rising (relative to
our import prices)
Q – so if output remains constant export
receipts will (eventually) grow to be more
than import payments
(c)
See Appendix Three.
(d)
I - With overseas funds diversifying away
from the Euro and the $US the demand
for the $NZ as an alternative (investment
/ exchange rate) has increased.
E - The increased demand has meant
that $NZ has appreciated.
Achievement
Achievement
with Merit
Any Three of:
Any Three of:
• Correct description of what
the terms of trade
measure.
• Explanation to (b) that
contains I, E and Q.
• Partial answer to (b) that
has one of I, E, or Q.
• Graph that shows stronger
$NZ due to increased
demand.
• Partial answer to (d),
which describes why the
demand rose or the $NZ
appreciated.
• Description of an effect of
strong dollar on exports or
imports.
• I or E for AD decrease.
• I or E for AS increase.
• PL fall.
• The strong terms of trade
will mean Net Exports rise.
• I and E for increased
demand for $NZ.
• I and E for AD decrease.
• I and E for AS increase.
• Explains that impact on
real GDP depends on the
relative size of AD
decrease + AS increase.
• Two of I, E or Q for terms
of trade impact.
Achievement
with Excellence
Effect fully explained
requires:
• Explaining the impact of
the strong dollar on
Aggregate Supply and
Aggregate Demand.
AND
• Explaining the effect on
the PL and that impact on
real GDP depends on
relative size of AD
decrease + AS increase.
OR
• I and E and Q for terms of
trade
Code
A2
OR
M2
OR
E2
NCEA Level 3 Economics (90632) 2012 — page 3 of 7
(e)
A strong dollar means that our export
returns are lower when converted back
into $NZ. Imports are now relatively
cheaper to buy when paid for in $NZ.
I – Aggregate Demand would decrease
E – as a strong dollar will mean that
exports receipts will decrease as it is now
relatively less profitable to export.
Needs both points for E
I – Aggregate Supply would increase.
E – as a strong dollar will mean that
imported inputs are relatively cheaper so
costs of producing will fall (or profitability
rises)
Needs both points for E
The overall impact of the decrease in AD
and increase in AS is that the price level
will fall.
The impact on growth (real GDP) will
depend on the relative changes in AS
and AD.
Strong / increasing terms of trade will
mean
I – exports receipts/ net exports will be
high or increasing
E – due to high(er) export prices / high
demand (for dairy products)
Q – this will lessen the decrease in real
GDP (+PL) / ↓net X / ↓AD due to
stronger $NZ.
NCEA Level 3 Economics (90632) 2012 — page 4 of 7
Question
Evidence
THREE
(a)
(b)
See Appendix Four.
I – Consumer spending / AD will
decrease
E – as households will be saving more
(contributing more to Kiwisaver) so have
less to spend
(c)
Achievement
Any Three of:
Any Three of
• Graph Three correct.
• Partial answer to (b) that
has one of I, E or Q.
• Effect of increased
participation in Kiwisaver
explained.
• I or E for consumption
effect of lower interest
rates.
• Effect of lower interest
rates on consumption
explained I and E.
• I or E for investment effect
of lower interest rates.
• Effect of lower interest
rates on investment
explained I and E.
Q – meaning inflation and economic
growth will fall
• I or E for exports receipts /
net exports effect of lower
interest rates.
Lower interest rates will cause:
• I or E for AS effect of lower
interest rates.
I – Consumer expenditure to rise
E – since the cost of borrowing decrease
causing an increase credit spending OR
Those with existing loans will pay less in
interest, increasing discretionary funds
available for spending OR saving will be
discouraged as returns fall.
Needs both points for E
I – Investment to rise:
E –as costs of borrowing falls making
more investment projects profitable (for
businesses)
Needs both points for E
I – Exports receipts to rise:
E – as the NZ dollar depreciates making
exports more competitive
Needs both points for E
I – Aggregate Supply will decrease.
Achievement
with Merit
• Identifies that PL will rise.
• Effect of lower interest
rates on exports explained
I and E.
• Effect of lower interest
rates on AS explained I
and E.
• Explains that impact on
real GDP depends on the
relative size of AD
increase + AS decrease.
Achievement
with Excellence
The effect of lower interest
rates fully explained:
• Consumption
• Investment
• Net Exports
• AS
• Overall impact on the NZ
economy.
Code
A2
OR
M2
OR
E2
NCEA Level 3 Economics (90632) 2012 — page 5 of 7
E – (as the NZ dollar depreciates)
imported raw materials costs more
making (planned) production less
profitable (at each price level).
Needs both points for E
I – The overall impact of the AD
increase and AS decrease will be an
increase for the price level
The effect on real GDP depends on
whether the AD increase is greater than
the fall in AS.
NCEA Level 3 Economics (90632) 2012 — page 6 of 7
Appendix One – Question One (a)
Appendix Two – Question One (d)
Appendix Three – Question Two (c)
Appendix Four – Question Three (a)
NCEA Level 3 Economics (90632) 2012 — page 7 of 7
Judgement Statement
Achievement
Achievement with Merit
Achievement with
Excellence
Minimum of:
Minimum of:
Minimum of:
1 A1
1 A1
1 A1
2 A2 OR 1 M2
1 A2 + 1 M2
1 M2 + 1 E2
90632 Codes
A1 refers to the first criterion.
A2, M2, and E2 refer to the second criterion.
I means identify.
E means explain.
Q means refer to the question.