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Market participants specialise to achieve greater efficiency, which creates a mutual reliance between individuals, firms, governments and countries.

Key concept indicators

  • Describe the sectors of the economy (that is, household, producer, financial, government, and overseas).
  • Describe the different producer sectors (that is, primary, secondary, and tertiary).
  • Describe real and money flows.
  • Construct or use a circular flow diagram or model that includes at least three sectors, shows real and money flows between the sectors and use this to support explanations of interdependence.
  • Explain the interdependence between households and producers sectors and the interdependences between at least two other sectors (for example, government and overseas, producers and overseas, household and financial).
  • Explain the impact of an event on a sector and its flow-on effects to at least two other sectors.

Possible context elaboration

Experimenting with models

Economics teachers can develop in students an understanding of the importance of using models in an economic context. Students could be introduced to models as simplifications of the real world and then, after a variety of teaching and learning episodes, be challenged to create their own to show the interdependence of sectors in the New Zealand economy. Such a unit would allow the key competency of using symbols, language and text (in the context of economic modelling) to be developed.

Last updated May 8, 2014