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Title / Investigate the causes and discuss the consequences of economic instability
Level / 5 / Credits / 2
Purpose / People credited with this unit standard are able to analyse the causes of, and outline and discuss the consequences of, economic instability.
Classification / Economic Theory and Practice > Macro Economics
Available grade / Achieved
Explanatory notes
1 Classical view considers that wages (and prices) are flexible downwards allowing for labour markets to clear during recessions.
2 Keynesian view considers that prices, and especially wages, are ‘sticky’ (inflexible) downwards, thus labour markets do not clear, and unemployment persists. During recessions demand is depressed and firms are reducing production and employment, and would not employ more workers, even if wages fell.
Outcomes and evidence requirements
Outcome 1
Analyse the causes of economic instability.
Evidence requirements
1.1 The analysis provides the causes of observed periods of economic instability consistent with the historical facts.
Range one of these periods – 1930’s Great Depression, 1970’s OPEC recession, 1980’s economic restructuring, 2009 recession.
1.2 The analysis establishes the role of wage and price flexibility in relation to economic instability and its correction.
Range Classical view, Keynesian view.
Outcome 2
Outline and discuss the consequences of economic instability.
Evidence requirements
2.1 The outline establishes the consequences of economic instability.
Range consequences include but are not limited to – employment, prices, wages, investment, interest rates, profits, capacity utilisation.
2.2 The discussion establishes the costs and benefits of economic instability in terms of economic objectives of government policy.
Range economic objectives – economic growth, full employment, price stability, balance of payment equilibrium, equitable distribution of income, sustainable development, quality of life;
economic instability – recession, inflationary expansion (‘economic boom’).
Planned review date / 31 December 2019Status information and last date for assessment for superseded versions
Process / Version / Date / Last Date for Assessment /Registration / 1 / 29 October 1996 / 31 December 2016
Revision / 2 / 21 July 1999 / 31 December 2016
Revision / 3 / 14 September 2005 / 31 December 2016
Review / 4 / 16 October 2009 / 31 December 2016
Rollover and Revision / 5 / 16 April 2015 / N/A
Consent and Moderation Requirements (CMR) reference / 0116
This CMR can be accessed at http://www.nzqa.govt.nz/framework/search/index.do.
Please note
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Providers and Industry Training Organisations, which have been granted consent and which are assessing against unit standards must engage with the moderation system that applies to those standards.
Requirements for consent to assess and an outline of the moderation system that applies to this standard are outlined in the Consent and Moderation Requirements (CMR). The CMR also includes useful information about special requirements for organisations wishing to develop education and training programmes, such as minimum qualifications for tutors and assessors, and special resource requirements.
Comments on this unit standard
Please contact NZQA National Qualifications Services if you wish to suggest changes to the content of this unit standard.
NZQA National Qualifications ServicesSSB Code 130301 / Ó New Zealand Qualifications Authority 2015