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Economic growth · Part 2 of 3
9 exam-style questions with model answers, plus 14 quick multi-choice questions — every question on this part of the standard, grouped by the 3 pages of notes they come from.
Write a full answer before you reveal the model one. That comparison is where the learning happens.
On a PPF with capital goods on one axis and consumer goods on the other, explain what a point inside the curve represents, and what would cause the whole curve to shift outward.
A government increases taxes to fund spending on infrastructure. On a PPF with consumer goods on the vertical axis and capital/infrastructure goods on the horizontal axis, this moves the economy from point A to point B.
Explain in detail why there is an opportunity cost of this decision, and explain the effect on the economy's future PPF.
Graph Two shows an economy moving from a point on its PPF to a point inside it. Graph Three shows an economy's PPF shifting inward.
Compare and contrast the causes and effects of these two decreases in economic growth, and explain which would be worse for New Zealand's long-term economic growth.
Identify three injections into the circular flow model and three leakages out of it, and explain what an injection does to economic growth.
A large increase in overseas tourists visiting a New Zealand region occurs.
Explain in detail why this might increase economic growth more than an equivalent increase in domestic tourists. Refer to the circular flow model in your answer.
A successful new export industry is established in a New Zealand region.
Discuss the impact of this on the government's operating balance (revenue minus expenditure), referring to the circular flow model. Compare and contrast the effects on government revenue and government expenditure, and give a reasoned judgement.
State the aggregate demand formula, and explain which curve shifts and in which direction if the New Zealand government significantly increases infrastructure spending.
A graph shows the AS curve shifting right and the AD curve shifting right, following the construction and opening of a major new venue in a New Zealand city.
Explain in detail each shift and the impact on economic growth. Refer to the AS/AD model in your answer.
A trial of a new agricultural industry in a New Zealand region is successful and the industry is established at scale.
Explain why economic growth would increase, referring to at least two flows on the circular flow model and to the AS/AD model. Then discuss the impact on the government's operating balance, giving a reasoned judgement.