Download AS 2.3 Practice Assessment Marking Schedule File

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ASSESSMENT SCHEDULE AS 90769
Question One
All countries in the world strive for economic growth
because if achieved the standard of living of the
population should increase.
Two measures of economic growth are:
 an increase in productive capacity
 an increase in real GDP
a. The economy shown in the graphs 1 + 2 below is currently operating at point A.
Adjust:
i.
Graph 1 to show an increase in productive capacity
ii.
Graph 2 to show an increase in real income
Graph
Graph 11
Graph
Graph 22
Guns
Guns
A
Graph 1
correct =
AD
Graph 2
correct =
AD
A
Butter
Butter
b. Choose either an increase in productive capacity or an increase in real income and describe why
it is a better measure of economic growth
Real income
Better Measure: _______________________________
Description:
eg
1. An increase in real income indicates the value of production has
increased so the buying power of an economy’s citizens will have
increased
2. An increase in productive capacity indicates that an economy is
capable of producing more but may not be doing so meaning citizens
may be no better off
CETA Practice Examination Economics NCEA Level 2/Year 12 2007
A correct
idea = A D
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c. Assume the economy is operating on the PPC labeled AB the in Graph 3
Describe an event that would cause the PPC to move to the new PPC position shown in Table
AD1 Correct
Graph 3
= AC
DC correct
= AC
Table 1
Guns
New PPC
C
AD
A
DC
B
D
Butter
Event causing the PPC change
Eg
Improvement in technology affecting just
butter –eg better butter making machine
Eg
Find a new resource that enables an
increase in both butter + gun production
Note: starting PPC is AB
Lack of school leavers with vocational and trade skills slowing down the
NZ economy
"Technology is far more fundamental than just IT or design - it includes all
manner of practical skills. But not many schools these days have the capacity
to teach them. Inventor Sir Frank Whittle needed the very best engineers
and tool makers to make a jet engine that worked," said the Northern Employers &
Manufacturers Association President Colin Martin.
Press Release: Employers And Manufacturers Association
Monday, June 18th, 2007
d. i. Identify an example of investing in human capital referred to in the press release above.
Eg.
Learning practical skills
Schools teaching students
Correct =
AC
ii. Explain how an investment in human capital would increase productivity of labour
eg
Investment in human capital increases the skill level of workers (I) so
they are able to produce more / make less mistakes / increase quality
which increases the (value) of output per worker (E)
Which is an increase productivity (Q)
CETA Practice Examination Economics NCEA Level 2/Year 12 2007
I or E =
AC
I+E=
MC
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Question Two
Figure 1
Investment
Saving
a. In Figure 1 what are sectors A and
B and the money flows (i), (iii), (iv).
Consumer spending
Sectors
2
_________________________
Learning
practical skills
Sectors
teaching students correct
B Schools
_________________________
= AC
Money flows
3
(i)
_________________________
Import
payments
Money
spending
(iii) Govt
_________________________
flows
(Direct) tax
(iv) _________________________ correct
= AC
A
NZ wins right to host Netball World Cup
Supporters of NZ Netball’s application for the Netball World Cup
argued that it would have a positive effect on New Zealand’s economic
growth saying that teams from 16 different countries will play 48
games before the world champion is decided
Others are worried about the congestion it will cause, particularly
when the semi finals and final are played at the “Arena Centre” which
is located near the Auckland CBD (Central Business District)
b. Refer to Figure 1 to help you explain how the Netball World Cup will increase economic growth in
New Zealand.
eg
Spectators buying tickets to world cup games will cause C to increase(R) (I)
and NZ netball will need to hire venues, employ staff, train NZ players (=
increase in investment (= I) in human capital (R)) all of which will increase
real income (as people providing these services are paid income(= Y) (R)) (E)
and so economic growth increases (Q)
R = refers to figure 1
I or E +
R = AC
I + E +R
= MC
c. Explain the flow on effect the Netball World Cup will have on trade in New Zealand by referring to
its effect on the current account.
eg
Supporters + players from oseas nations buying NZ goods and services
will increase export service receipts (E) resulting in an improvement (I)
In the current account (Q)
CETA Practice Examination Economics NCEA Level 2/Year 12 2007
I or E =
AE
I+E=
ME
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d. i. What is net social welfare?
Net social welfare refers to a countries overall well-being. It
includes economic (or material) as well as non-economic (or nonmaterial) welfare measures.
Correct =
AD
ii. How can net social welfare be used to measure economic growth?
Net social welfare indicators are normally presented as tables as
ranked country lists. Economic growth occurs when a countries
rank increases.
Correct =
AD
iii. Economists using net social welfare to measure economic growth may find that the Netball
World Cup causes economic growth to fall – explain how.
eg
If non – economic factors like congestion are very large (I) then these
negative effects may be larger than the economic effects (explained in b
above) causing the net social welfare index to fall (E)
And so our economic growth would decrease (Q)
I or E =
AC
I+E=
MC
E (Breadth) in Question 2 = if has 1 x AC + 1 x MC + 1 x ME
CETA Practice Examination Economics NCEA Level 2/Year 12 2007
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Question 3
High Oil Price Encourages Search for Oil off the South
Islands East Coast
High oil prices have encouraged overseas oil explorers to
search for oil off the Canterbury Bight. Three wells are
planned about 100 kilometres east of Timaru.
Economists expect a discovery of oil to boost the
Canterbury regional economy
a. Economic growth has both positive and negative effects.
For each of the outcomes of economic growth below explain a
positive and negative outcome that could result in Canterbury
following the discovery of oil in the region.
Outcome of Growth
(i)
Environmental
Impact
I or E =
AE
I+E=
ME
(ii)
Inflation
I or E =
AE
I+E=
ME
Positive Effect
Negative Effect
Eg
More environmentally
friendly production
methods or products (I)
as increased profits
earned by Canterbury
firms who are directly or
indirectly involved in oil
prodn may allow them to
invest in developing (E)
new techniques / products
Eg
May involve depletion of
natural resources (I) as
Increased production in
Canterbury as a result of
the oil discovery (eg local
suppliers providing goods
to oil discovery firms)
increases resource use (E)
Eg
Increase productivity (I)
as increased profits
earned by Canterbury
firms could be invested in
new (better) production
methods developed that
causing AS to shift right
and so decrease inflation
in Canterbury (E)
Eg
Increased economic
growth will mean
increased incomes (I) for
Cantabrians and so their
demand for G+S will
increase pushing up prices
(and so cause demand pull
inflation) in Canterbury (E)
I or E =
AE
I+E=
ME
I or E =
AE
I+E=
ME
E (Depth) in Question 3 = if has 4 x ME
CETA Practice Examination Economics NCEA Level 2/Year 12 2007
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Sufficiency Statement
Achieved
Merit
Excellence
1 x AD + 1 x AC + 1 x AE
and
5 other A’s M’s or E’s
1 x MC + 1 x ME
and
D
1 x A + 1 x AC + 1 x AE
and
6 other A’s M’s or E’s
1xE
and
C
1 x M + 1 x ME
and
D
1 x A + 1 x AC + 1 x AE
and
7 other A’s M’s or E’s
( 8/20)
(11/20)
(13/20)
CETA Practice Examination Economics NCEA Level 2/Year 12 2007
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