520 The Economic Environment
Questions and answers for NZDipBus prescription
The following list of questions and answers has arisen from feedback from assessors and/or the national external moderation process.
All feedback will be considered when the prescription is reviewed.
| Questions | Answers |
|---|---|
| Learning outcome two: Students will demonstrate an understanding of the free market using the supply and demand model. Key element b) Supply and/or demand: Does this mean supply or demand, or supply and demand? | The learning outcome reflects the need for students to be able to demonstrate understanding of the four sub-components within b) applied to both supply and demand. The key element allows some flexibility in what assessment evidence is mandatory. Assessment must evaluate understanding of all four sub-components from either supply or demand. |
| Learning outcome two Key element d) Elasticity of demand, one of: Why only “one of”? I'm now not able to contrast the three mentioned here. I'd love to ask the question “What do I use in what situation?” to see if the students understand the concept. It's a pity there is no “elasticity of supply” here. | You can teach the three, but formally assessing one is enough to confirm the concepts are understood. Remember that the individual key elements and sub components are there to help achieve (and demonstrate) understanding of learning outcome 2 “….understanding of the (free) market using the supply and demand model”. They should not be assessed for their own sake in isolation. Question and comment to be considered at the time of prescription review. |
| Learning outcome two Key element e) Effect of Government intervention, one of: Why only “one of”? I want to be able to contrast maximum price versus subsidies, but it looks as if I can't. Shame, because I could then have discussed why melamine was added to milk in China (because of the maximum price), and that this would probably not have happened if the government had extended a subsidy. | As above – you can include this in the teaching programme, but assess one. Question to be considered at the time of prescription review. |
Learning outcome three: Students will demonstrate an understanding of the firm's profit maximizing behaviour in the different market structures. Key element a) Cost/revenue analysis:
|
Assessment note 5 implies both, but key element a) allows short run or long run. |
Learning outcome three Key element b) Business decision-making strategy:
|
You can teach all, and then can assess understanding of the differences by giving a situation and asking what market state it is – as long as perfect competition and one form of imperfect competition are assessed. |
Learning outcome four: Students will discuss the assumptions and failure of the free market model and evaluate the role of government. Key element c) Government:
|
Yes, you can contrast them, but recognise that it is difficult to look at simultaneous objectives without learning outcomes 5 and 6. The learning programme should provide an overview of the government objectives in light of the market failure. At this stage, it is not expected that lecturers go into the technical details. In assessment, student discussion should act as a logical link to learning outcomes 5 and 6. |
| Learning outcome five: Students will demonstrate an understanding of models and methods used to illustrate the macro-economic environment. Key element d) ADAS model. Do I assess shifts? It's not mentioned, whereas under learning outcome two, shifts in market equilibrium are specifically asked for under key element c). | Yes, assess an example of change affecting the economy using both circular flow and AD/AS models. |
| Learning outcome seven: Students will evaluate the potential effects of free trade and analyse the impact on New Zealand of changes in the global economy. Why is protectionism not mentioned? | Protectionism can be part of the teaching programme, but is not specifically assessed. Question to be considered at the time of prescription review. |
Learning outcome seven Key element b) Balance of payments:
|
Capital account and financial account summaries can be taught but only current account should be assessed. Question to be considered at the time of prescription review. |
| Learning outcome seven Key element c) Foreign exchange. Do I cover fixed as well as floating exchange rates? | You can cover both in the teaching programme. Assessment can be of either or both, depending on the situation assessed. |
| Learning outcome seven Key element d) Effect of transmission mechanisms on: Why is the transmission effect mentioned here, but not under monetary policy (learning outcome 6)? | Transmission mechanism here refers to the flow on effects of rising/falling net exports on growth and monetary policy decisions. The transmission mechanism with graphs would have been covered in detail in relation to learning outcome 6. Therefore, incorporate transmission mechanism within monetary policy in learning outcome 6. More general impacts of global changes on the New Zealand economy should be assessed in relation to learning outcome 7. Question to be considered at the time of prescription review. |
| Learning outcome seven This learning outcome states “…analyse the impact on New Zealand of changes in the global economy”. The idea of globalisation doesn't seem to be reflected in the key elements. | Any global changes may be taught but must be assessed in terms of impact on monetary policy or growth, with the transmission process explained. |
| Do I assess inflationary spiral, inflationary/recessionary gaps, stagflation, structural versus cyclical unemployment, credit creation and credit destruction, the multiplier, MV=PY, money supply versus money demand? | These topics are not explicit in the prescription, but could be included as part of the teaching programme. However, any assessment of topics covered in the teaching programme must be in relation to relevant prescription learning outcomes, key elements and sub-components. For example, there is scope in teaching to cover growth/recession, employment/ unemployment, inflation (and the various combinations e.g. stagflation, inflationary spiral) within learning outcome 4 c) government objectives; learning outcome 5 (models and methods) b), c) and d); and learning outcome 6 a) and b). A possible assessment scenario (for example) of “stagflation” could be assessed against government growth, employment and price objectives, analysed using business cycle and AD/AS models (and real/nominal GDP measures), with remedies evaluated against fiscal and monetary policy options, and inflation targeting. Money or credit creation is part of learning outcome 6 and should be explained as a background to rising inflation caused by an increase in the money supply. |
Page updated: 27 February 2007