The LG 91223 Analysing International Trade Learning Guide is a comprehensive, write-on student resource specifically designed for the NCEA Level 2 Economics Achievement Standard: Analyse international trade using economic models. This guide provides a structured pathway for students to understand why New Zealand trades, how the value of our currency fluctuates, and how global events impact our local standard of living.
Key Features
The Foundation of Trade: Explores why nations specialize. It introduces the concept of Comparative Advantage, explaining how New Zealand benefits by producing goods with a lower opportunity cost and trading for those it cannot produce as efficiently.
New Zealand’s Trade Profile: Provides a snapshot of our economy's "External Sector." Students analyze our major exports (dairy, meat, logs, tourism) and imports (machinery, vehicles, fuels), along with our primary trading partners like China, Australia, and the USA.
The Exchange Rate (The NZD): A significant focus of the guide. Students master the Supply and Demand model for the New Zealand Dollar.
Appreciation vs. Depreciation: Understanding what causes the dollar to rise or fall (e.g., changes in interest rates, overseas demand for exports, or foreign investment).
Impact Analysis: Using mnemonics like WPID (Weak Pivot, Imports Dearer) and SPICED (Strong Pivot, Imports Cheaper, Exports Dearer) to link currency movements to the cost of living and business profitability.
Trade Models: Practical practice in drawing and interpreting the Two-Market Model (Export and Import markets). Students learn to show how a change in world price affects domestic producers, consumers, and the quantity traded.
The AD/AS Model in a Global Context: Integrating trade into the wider economy. Students learn how a change in Net Exports (X−M) shifts the Aggregate Demand curve, affecting New Zealand's Real GDP, employment levels, and inflation.
Terms of Trade: Introduces the index that measures the purchasing power of our exports. Students learn to calculate the Terms of Trade index and explain how a "favourable" movement allows New Zealanders to buy more imports for every unit of exports sold.
Trade Barriers and Protectionism: Investigates how governments can restrict trade.
Tariffs and Quotas: Using the One-Market Model to show how a tariff increases the domestic price, helps local producers, but hurts consumers and creates a deadweight loss.
Subsidies: Analyzing how government support for local firms can reduce reliance on imports.
Free Trade Agreements (FTAs): Discussion on the benefits of reducing trade barriers, focusing on New Zealand’s CER agreement with Australia and our various FTAs with Asian and Pacific nations.
Impacts on Stakeholders: Evaluating the consequences of trade shifts for different groups, including households (cost of imports), firms (competitiveness), and the government (tax revenue and trade balance).
NCEA-Style Practice Tasks: Features scaffolded questions designed to prepare students for the external exam. These tasks emphasize the "Excellence" requirement of linking multiple models to provide a comprehensive economic narrative.
Step-by-Step Worked Examples: Provides clear templates for writing trade reports and correctly labeling complex international trade diagrams.
Glossary of Trade Terms: A complete reference for essential vocabulary—such as Balance of Trade, Appreciation, Protectionism, and Interdependence—ensuring students use the correct technical language.