ZIMBABWE SCHOOL EXAMINATIONS COUNCIL

ZGCE ADVANCED L EVEL SYLLABUS

ECONOMI CS
9158

EXAMINATION SYLLABUS FOR 2013 - 2016

ECONOMICS

ZGCE ADVANCED LEVEL

Contents Page

Introduction 3

Aims 3

Assessment Objectives 4

Scheme of Assessment 5

Curriculum Content 7

Appendix A: Comparison of Curriculum content with

A Level Syllabus 9074

Appendix B: Resource List

Appendix C: Checklist of Economic Terms and Concepts

NOTE

Additional copies of this syllabus and the specimen paper booklet can be ordered from
ZIMSEC.

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1 INTRODUCTION

1.1 The aim of this syllabus is to enable Centres to develop an Economics course
that is suitable for Advanced Level candidates.

1.2 Three methods of assessment are used (multiple choice, data response
questions and essays).

1.3 Candidates must offer papers 1, 2 and 3.

1.4 No previous study of the subject is assumed by the syllabus.

2 AIMS

2.1 The syllabus is intended to encourage a course that will:

(a) provide a basis of factual knowledge of economics,

(b) encourage the development in the student of:

(i) a facility for self-expression, not only in essay form but also using
additional aids such as statistics and diagrams where appropriate,

(ii) the habit of using works of reference as sources of data specific to

economics,

(iii) the habit of reading critically to gain information about the

changing economy in which we live,

(iv) an appreciation of the methods of study used by the economist

and of the most effective ways in which economic data may be
analysed, correlated, discussed and presented.

3 ASSESSMENT OBJECTIVES

These indicate the skills that the examination will be designed to test in
conjunction with the subject matter listed in the syllabus.

3.1 Candidates are expected to:

1 DEMONSTRATE KNOWLEDGE AND UNDERSTANDING of the specified

content,

2 INTERPRET economic information presented in verbal, numerical or

graphical form,

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 3 EXPLAIN AND ANALYSE economic issues and arguments, using
relevant economic concepts, theories and information,

4 EVALUATE economic information, arguments, proposals and policies,

taking into consideration relevant information and theory, and
distinguishing facts from hypothetical statements and value judgements,

5 ORGANISE, PRESENT AND COMMUNICATE economic ideas and

informed judgements in a clear, logical and appropriate form.

3.2 The Multiple Choice component (Paper 1) will seek to test particularly
Assessment Objectives 1, 2 and 3.

The Data response component (Paper 2) will seek to test particularly

Assessment Objectives 2 and 3, and to a lesser extent Assessment Objectives
1, 4 and 5.

The Essay component (Paper 3) will seek to test particularly Assessment

Objectives 1, 3, 4 and 5 and to a lesser extent Assessment Objective 2.

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Scheme of Assessment

Three compulsory papers will be set as follows:

Paper Duration Mark

Weighting

1 Multiple Choice 1½ hours 40 items, all to be attempted 30%

2 Data Response 1¼ hours 2 questions, both to be answered 20%

3 Essays 3 hours 4 questions to be answered from a 50%

choice of about 12

Papers 1 and 2 will be timetabled in the same session with a short break between the
papers.

Candidates must offer Papers 1, 2 and 3.

Paper 1 Multiple Choice

All the multiple choice items will be of the simple type with four responses suggested
for each item. Multiple choice questions will be set on the whole syllabus. Of the forty
questions, no more than ten (25%) will test knowledge alone and no less 30 (75%) for
skills 2 and 3 (interpretation, explanation and analysis).

Paper 2 Data Response

This paper aims to test particular skills rather than specific areas of knowledge, and for
this reason each paper will contain two compulsory questions carrying 20 marks each.
No question will demand knowledge of a particular economy, and data will be included
from various economies. The data may be presented in graphical or tabular or textual
format.

Within each question there will be a number of sub-questions, and it is the examiners'
intention that earlier sub-questions will test skills of definition, description, identification
and observation. Later sub-questions will test the skills of application, analysis and
evaluation by inviting candidates to use their knowledge of economic principles to solve
specific problems that can be observed in the data before them.

Although all the sub-questions will be related to the data presented in each question,
each of the sub-questions will present separate aspects so that success in any
particular sub-question will not be dependent on success in earlier sub-questions.

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The two questions in a paper will therefore aim to test the candidate's ability to answer:

(a) basically straightforward questions in which the data required are fairly obvious,

(b) questions that require some simple re-arrangement or summarising of the data,

(c) more complex questions that require candidates to search the data to select
relevant material for their answer,

(d) a final sub-question that will require candidates to evaluate and analyse aspects
of the data in relation to their understanding of some of the central concepts of
economics.

Paper 3 Essays

Candidates will be required to answer any four questions.

SPECIFICATION GRID

SKILL PAPER 1 PAPER 2 PAPER 3

1 Knowledge and 20-25% 20% 28%

understanding

2 Interpretation 50-55% 40% 16%

3 Analysis 20-25% 30% 20%

4 Evaluation ---

5 Organisation, Presentation --- 10% 36%

and Communication

NB Each question in Paper 3 will test up to the highest skill.

4 CURRICULUM CONTENT

1 Basic Economic Ideas

(a) Scarcity, choice and resource allocation

(i) Meaning of scarcity and the inevitability of choices at all levels

(individual, firms, governments)
(ii) Opportunity cost
(iii) Basic questions of what will be produced, how and for whom
(b) Different allocative mechanisms

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 (i) Market economies
(ii) Planned economies
(iii) Mixed economies

(c) Production possibility curve - shape and shifts

(d) The margin: decision making at the margin

(e) Positive and normative statements

(f) Ceteris paribus

(g) Factors of production: land, labour, capital, enterprise

(h) Division of labour

(i) Efficient resource allocation: concept of economic efficiency; productive

and allocative efficiency.

2 Theory of Demand

(a) Individual demand curves

(b) Aggregation of individual demand curves to give market demand

(c) Factors influencing demand

(d) Movements along and shifts of a demand curve

(e) Price, income and cross-elasticities of demand

(i) Meaning and calculation

(ii) Factors affecting
(iii) Implications for revenue and other business decisions

(f) Utility Theories

(i) Marginal Utility Theory:

- Law of diminishing marginal utility and its relationship to

derivation of an individual demand schedule and curve.
- Equi-marginal principle
- Limitations of marginal utility theory.

(ii) Indifference Curves Theory

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 - Budget lines: Income and substitution effects of a price change.

(g) Consumer surplus

3 Theory of Supply

(a) Individual firm's supply curves

(b) Aggregation of individual firm's supply curves to give market supply.

(c) Factors influencing market supply, including indirect taxes and subsidies.
Movements along and shifts of a supply curve.

(d) Price elasticity of supply, determinants, implications for speed/ease with

which businesses react to changed market conditions.

(e) Short-run production function; fixed and variable factors of production,

total product, average product and marginal product. Law of diminishing
returns (Law of variable proportions).

(f) Long-run production function: returns to scale.

(g) Economist's versus accountant's definition of costs

Marginal cost and average cost.

Short-run cost function - fixed costs versus variable costs
Explanation of shape of SRAC.

(h) Long-run cost function.

Explanation of shape of LRAC: economies and diseconomies of scale
Internal and external economies and diseconomies of scale.

(i) Survival of small firms

Growth of firms

(j) Relationship between elasticity, marginal, average and total revenue for a
downward-sloping demand curve.

4 Theory of the Firm

(a) Price and output determination:

- Interaction of demand and supply: equilibrium price and quantity;

price as a rationing and allocative mechanism,
- meaning of equilibrium and disequilibrium,

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 - effect of changes in supply and demand on equilibrium price and
quantity,
- applications of demand and supply analysis.

(b) Concepts of the firm and industry.

(c) Traditional objective of the firm - profit maximisation. Normal and

abnormal profit. An awareness of other objectives of the firm.

(d) Different market structures - perfect competition, monopoly, monopolistic

competition, oligopoly. Structure of markets as explained by number of
buyers and sellers, nature of product, degree of freedom of entry and
nature of information. Contestable markets.

(e) Conduct of firms - pricing policy and non-price policy, including price
discrimination, price leadership models and mutual interdependence in
the case of oligopolies.

(f) Performance of firms - in terms of output, profits and efficiency.

Comparisons with regard to economic efficiency, barriers to entry, price

competition, non-price competition and collusion.

5 Theory of Distribution

(a) Factors of production: Labour, Land, Capital and Enterprise.

(b) Rewards to factors of production: wages, rent, interest and profits; share
in the national income.

(c) Wages

(i) Demand for Labour as a derived demand

- meaning and factors affecting demand

- derivation of an individual firm's demand for a factor using

marginal revenue product theory.

(ii) Supply of Labour

- meaning and factors affecting supply

- net advantages and the long run supply of labour.

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 (iii) Wage determination under free market forces (competitive product
and factor markets)

- The role of trade unions and government in wage

determination; collective bargaining.
- wage differentials, economic rent and quasi-rent.

(d) Rent: Supply factors peculiar to land in general and for particular uses.

(e) Interest: Difficulties in the concept of capital. Structure of interest rates.

Loanable funds theory of interest rates and its limitations. Liquidity
preference theory of interest rates and its limitations. Interest rate
determination in practice, including role of government and of
international influences.

(f) Profit: Accountant's and economist's concepts of profit.

Normal profit as transfer earnings.

Abnormal profit. Role of profit.

6 Government Intervention in the Price System

(a) Sources of market failure

(i) Externalities
(ii) Meaning of deadweight losses
(iii) Market imperfections - existence of monopolistic elements.
(iv) Public goods and merit goods

(b) Cost Benefit Analysis

(i) Social costs as the sum of private and external costs.

(ii) Social benefits as the sum of private benefits and external
benefits.

(c) Conditions for allocative efficiency.

(d) Objectives of government microeconomic policy: efficiency, equity.

(e) (i) Policies to correct market failure: regulation: maximum price

controls, price stabilisation, taxes, subsidies, direct provision of
goods and services, production quotas, butter stock.
(ii) Policies towards income and wealth redistribution.
(iii) Effectiveness of government policies.

(f) Decision making using cost benefit analysis

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 (g) Commercialisation and Privatisation

Problems of transition when central planning in an economy is reduced.

7 International Trade

(a) Principles of absolute and comparative advantage, and their real-world

limitations.
Other explanations/determinants of trade flows e.g. political
Opportunity cost concept applied to trade.

(b) Arguments for free trade and motives for protection

(c) Types of protection and their effects

(d) Economic integration: free trade area, customs union, economic union:
advantages and disadvantages.
Its real world significance to developing and developed countries.

(e) The role and impact of commodity agreements.

(f) Terms of trade: calculation, meaning, trends. Relationship to Balance of

Payments.

(g) Balance of Payments (BOP)

Components of Balance of Payments

Its nature and meaning in terms of current and capital transactions. The
Balance of Payments - composition of the trading and non-trading
accounts. Significance of net property income from abroad and capital
transactions in developed and developing economies.

Balance of Payments problems

(i) Meaning of BOP equilibrium and disequilibrium

(ii) Causes of BOP disequilibrium
(iii) Consequences of BOP disequilibrium on domestic and external
economy.

(h) Fluctuations in foreign Exchange Rates

(i) Definitions and measurements of exchange rates - nominal, real,

trade-weighted exchange rates.
(ii) Determination of exchange rates-floating, fixed, managed float.
(iii) Factors underlying fluctuations in exchange rates.

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 (iv) effects of changing exchange rates on the economy.

(i) Policies designed to (i) correct BOP disequilibrium (ii) influence the
exchange rate.

8 Theory and Measurement in the Macroeconomy

(a) The circular flow of income between households, firms, government and
the international economy.

(b) National Income Statistics

(i) Measurement of national income

(ii) Use of National income statistics as measures of economic growth
and living standards.
(iii) Money and real data; Gross Domestic Product (GDP) deflator.
(iv) Comparison of economic growth rates and living standards over
time and between countries: purchasing power parity theory.
(v) Other indicators of living standards and economic development.

(c) National Income Determination

(i) Main schools of thought on how the macroeconomy functions.

Keynesian and Monetarist views.
(ii) Aggregate Expenditure function (AE)
Meaning, components of AE and their determinants.
Income determination using AE - income approach and
withdrawal/injection approach.
Inflationary and deflationary gaps; full employment level of income
versus equilibrium level of income.
The multiplier
Autonomous and induced investment; the accelerator.
(iii) Shape and determinants of AD
Shape and determinants of AS
Interaction of AD and AS: determination of level of output, prices
and employment.

9 Money and the Price Level

(a) Money: its functions and characteristics

(b) Money supply

- Broad and narrow money supply

- Government accounts; government budget, deficit financing
- Sources of money supply in an open economy (commercial
banks/credit creation, central bank, deficit financing, total currency

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 flow).

(c) The demand for money

- Interest rate determination

- Liquidity preference theory and loanable funds theory.

(d) General Price Level: price indices

Inflation: (i) definition of inflation and degrees of inflation

(ii) causes of inflation
(iii) consequences of inflation
(iv) policies to cure inflation.

10 Macroeconomic Problems and Policies

(a) Economic Growth and Development

(i) Definition of economic growth and development

(ii) Indicators of comparative development and underdevelopment in
the world economy - economic, monetary, non-monetary and
demographic indicators.
(iii) Characteristics of developing economies: population growth and
structure, income distribution, economic structure, employment
composition, external trade and urbanisation in developing
economies, the nature of dependency, including the role of multi-
national corporations.
(iv) Actual versus potential growth in national output.
(v) Factors contributing to economic growth
(vi) Costs and benefits of growth
(vii) Policies for development: analysis of factors in the development
process; policies of trade, aid and industrialisation; dev elopment
through borrowing and its implications in terms of external debt,
the debt crises. The role of international financial institutions e.g.
IMF and World Bank.

(b) Unemployment

(i) Definition of unemployment, full employment and natural rate of

unemployment

(ii) Difficulties involved in measuring unemployment; employment

statistics; patterns and trends in unemployment/employment.
(iii) Size and components of labour force; labour productivity
(iv) Causes and types of unemployment
(v) Solutions to unemployment

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(c) Inflation (see Money and price level)

(d) BOP (see International trade)

(e) Exchange rate fluctuations (see International trade)

(f) Inter-connectedness of problems:

Links between macroeconomic problems and their interrelatedness, for

example

- relationship between internal and external value of money

- relationship between balance of payments and inflation
- relationship between inflation and unemployment; trade-off
between inflation and unemployment.

(g) Objectives of macroeconomic policy

Stabilisation: price stability, equity, full employment, BOP equilibrium,

growth and development.

(h) Types of policy: Aims and instruments of each policy; how each is used
to control inflation, stimulate employment, stimulate growth, correct
balance of payment disequilibrium; the effectiveness of each

(i) Fiscal policy

(ii) Monetary policy
(iii) Exchange rate policy
(iv) Supply side policies
(v) Incomes policy
(vi) Trade Policy
(vii) Price Policy

(i) Conflicts between policy objectives and evaluating policy options to deal
with problems.

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 APPENDIX A

COMPARISON OF CURRICULUM CONTENT WITH A LEVEL SYLLABUS 9058

Compared with the A Level Economics syllabus 9058,

The following topics are deleted or downgraded so that they will not be the subject
of specific questions:

t free goods

t Giffen goods

t factor rewards linked to costs

t nationalisation

t objectives of public sector firms

t official definitions of money

t description of credit creation process

and the following topics are added or upgraded so that they could be the subject of
specific questions:

t contestable markets

t interaction of aggregate demand and aggregate supply

t exchange rate policy and supply side policies as macroeconomic policies.

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 APPENDIX B

RESOURCE LIST

This is NOT a list of prescribed texts, but merely an attempt to provide a range of
alternatives from which teachers may like to choose.

Author Title Publisher ISBN Date

Anderton, AG Economics Causeway 1873929374 1995

Beardshaw, J Economics: A Student's Longman 0582303486 1998

Guide

Begg, David Economics McGraw Hill 0077094123 1997

et al

Davies, Investigating Macmillan 0333638085 1996

Brinley et al Economics

Dunnett, A Understanding the Longman 0582325064 1998

Market

Grant, Susan Workbook for Stanlake, Addison 0582302560 1997

Introductory Economics Wesley
Longman

Hardwick, Introduction to Modern Addison 0582357152 1999

Philip et al Economics Wesley
Longman

Heather, Ken Understanding Prentice Hall 0136501699 1997

Economics

Ison, Stephen Economics FT 0273634275 1999

Management

Lipsey, Introduction to Positive OUP 0198774257 1995

Richard and Economics
Chrystal, K
Alec

Livesey, Textbook of Core Longman 0582238676 1995

Frank Economics

Sloman, John Essentials of Prentice Hall 013779844X 1997

Economics

Stanlake, GF Introductory Economics Longman 0582246148 1995

and Grant S

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Dictionaries

Bannock, Penguin Dictionary of Penguin 014053760 1998

Graham et al. Economics
(eds)

Pearce, Dav id Macmillan Dictionary of Macmillan 0333576934 1992

(ed.) Modern Economics
Wall, Nancy et The Complete A - Z Hodder 0340669853 1996
al. Economics and
Business Studies
Handbook

Internet:

Teachers will also find useful material on website http://www.bized.ac.uk/

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 APPENDIX C

CHECKLIST OF ECONOMIC TERMS AND CONCEPTS

NB A checklist such as this is neither exhaustive nor prescriptive: unless it is

indicated as `not required', the omission of an item from this list does not mean
that examiners will not refer to it, while teachers may find if helpful or desirable in
their courses to introduce terms and concepts even if they lie outside the scope
of the examined syllabus.

TOPIC TOPIC

abnormal profit average propensity

absolute advantage average revenue
accelerator average variable cost
active balances balance for official financing
ad valorem tax balance of payments
aggregate demand balance of trade
aggregate expenditure balanced Budget
aggregate supply balancing item
allocative efficiency Bank Rate
appreciation (exchange rate) barriers to entry
at constant prices barriers to exit
at current prices barter
at factor cost base date
at market prices bilateral trade
automatic stabilisers birth rate
autonomous broad money supply
average cost budget line
average fixed cost
average product

canons of taxation cross-elasticity of demand

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capital current account of Balance of Payments
capital account of Balance of Payments customs unions
capital gain cyclical unemployment
capital market deadweight losses
capital: output ratio death rate
cartels deficit
cash ratio deficit financing
cash ratio deposits deflation
central bank deflationary gap
ceteris paribus demand
change in demand demand conditions
change in quantity demanded demand cuve
cheques demand-deficiency unemployment
circular flow of income demand-pull inflation
closed economy demand schedule
closed shop demerit good
coincidence of wants dependency ratio
collective bargaining depreciation (of capital)
command economy depreciation (exchange rate)
commercial banks derived demand
commodity agreements devaluation
comparative advantage development
comparative costs diminishing marginal utility
complementary goods diminishing returns
concentration, industrial direct taxation
consumer surplus discount houses
consumption diseconomies of scale
contestable markets dissaving
cost of living distribution of income
cost benefit analysis division of labour
cost of production dumping
craft union economic efficiency
credit creation economic growth
credit multiplier economic union
economic rent
economies of large dimensions free trade

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economies of scale free trade areas
effective demand frictional unemployment
efficiency full employment
elastic funding
elasticity of demand general government final consumption
elasticity of supply general unemployment
enterprise general union
entrepreneur government expenditure
equi-marginal utility gross domestic product
equilibrium gross domestic product deflator
equilibrium price gross national product
equilibrium quantity horizontal integration
equity (fairness) household expenditure
exchange control hyperinflation
Exchange Rate Mechanism IBRD (the World Bank)
excise duties idle balances
exports IMF
external balance immobolity of labour
external benefit impact of a tax
external economies imperfect competition
externalities imperfections
factor cost adjustment import penetration
factor of production imports
financial economies of scale incidence of a tax
fiscal boost, inflationary income effect
fiscal drag, inflationary income elasticity of demand
fiscal policy income tax
fixed capital incomes policy
fixed capital formation increasing returns
fixed costs indices
fixed exchange rates indifference curves
floating exchange rates indirect tax
foreign exchange induced investment

industrial union marginal physical product

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inelastic marginal propensity
infant industries argument marginal revenue
inferior goods marginal revenue product
inflation marginal tax rates
inflationary gap marginal utility
infrastructure market
injections market economy
integration market failure
interest market system
interest rate marketing economies
intermediation, financial Marshaall-Lerner Condition
internal economies of scale maximisation
investment measure of value
invisible balance medium of exchange
J-curve menu costs of inflation
Keynesian merit goods
labour microeconomics
laissez-faire migration
land Minimum Lending Rate
law (economic) mixed economy
law of demand mobility of labour
law of supply Monetarism
leakages monetary policy
liquidity money
liquidity preference money supply
liquidity ratio monopolistic competition
liquidity trap monopoly
loanable funds theory monopsony
Lome Convention multilateral trade
long run multinationals
Maastricht, Treaty of multiplier
Macroeconomic narrow money supply
managed floating National Debt
marginal cost notational income
natural increase
natural rate of unemployment perfectly inelastic

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natural monopoly Phillips Curve
near-money planned economy
negative externalities point elasticity
net advantage positive externalities
net domestic product positive statement
net national product poverty trap
net property income from abroad precautionary demand for money
nominal price agreements
non-excludability price competition
non-pecuniary advantages price discrimination
non-price competition price elasticity of demand
non-rivalness price leadership
normal goods price mechanism
normal profit primary sector
normative statement principle of multiples in economies of scale
occupational mobility private benefits
official financing private costs
oligopoly private goods
open economy private sector liquidity
open market operations privatisation
opportunity cost producers' surplus
optimum output production possibility curve
optimum population productive efficiency
optimum resource allocation productivity
other things being equal profit
paradox of thrift profit maximisation
paradox of value progressive taxation
Pareto optimality proportional taxation
patents protectionism
paternalism PSBR
pecuniary advantages PSDR
pensions public goods
perfect competition purchasing power parity
perfectly elastic quality of life

Quantity Theory of Money specific tax

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quasi-rent speculative demand for money
quotas standard of deferred payments
rate of interest standard of living
rationing store of wealth
real structural unemployment
rectangular hyperbola subsidy
reflation substitute goods
regional policies substitution effect
regressive taxation supernormal profit
rent supply
reserve currencies supply conditions
resources supply curve
Restrictive Practices Court supply-side economies
retail banks surplus
Retail Prices Index sustainability
revaluation tariffs
risk-bearing economies of scale taxation
sales maximisation technical economies
sales revenue maximisation technical unemployment
satisficing profits terms of trade
saving tertiary sector
scarcity total currency flow
seasonal unemployment total revenue
second best theory trade creation
secondary sector trade cycle
services trade diversion
shares trade unions
shoe leather cost of inflation trading possibility curve
short run transactions demand for money
Smith, Adam transfer earnings
social benefits transfer payments
social costs Treasury Bills
special deposits unemployment
Special Drawing Rights unit of account
specialisation unitary elasticity
unstable equilibrium

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urbanisation
utility
value added
variable costs
variable proportions
velocity of circulation
vertical integration
visible balance
voluntary unemployment
wage differentials
wage drift
wages
weights
withdrawals
working capital
yield

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