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Macro-economic influences on the New Zealand economy · Part 1 of 3
6 exam-style questions with model answers, plus 7 quick multi-choice questions — every question on this part of the standard, grouped by the 2 pages of notes they come from.
Write a full answer before you reveal the model one. That comparison is where the learning happens.
Name the four macro-economic goals of the New Zealand government, and state the indicator used to measure each.
An economy's annual real GDP growth falls from 3.5% to 0.6% over a year.
Explain in detail what this means for the goal of economic growth, and explain why it is incorrect to describe this as the economy shrinking.
The New Zealand government pursues four macro-economic goals.
Compare and contrast the goals of economic growth and price stability, explaining why pursuing one can make the other harder to achieve. Refer to the AD/AS model in your answer.
List the three leakages and the three injections in the circular flow model, and explain what happens to the economy when injections exceed leakages.
New Zealand signs a free trade agreement that removes tariffs on its exports in a major overseas market.
Using the circular flow model, explain in detail how this could affect New Zealand's economy.
A recession in New Zealand's major trading partners reduces demand for New Zealand exports.
Compare and contrast the impacts of this on the goals of a balanced current account and full employment. Refer to the circular flow model and the AD/AS model in your answer.