NZQA registered unit standard / 8417 version 5
Page 1 of 2
Title / Demonstrate knowledge of National Income determination
Level / 5 / Credits / 2
Purpose / People credited with this unit standard are able to: demonstrate knowledge of the circular flow of income; and analyse the impact of a change in the components of circular flow of income on the equilibrium level of National Income (GDP).
Classification / Economic Theory and Practice > Macro Economics
Available grade / Achieved

Explanatory notes

1Income and expenditure model is given by the condition Y = C + I + G + (X – M), and is supported by sufficient data for each variable to enable the calculation of equilibrium level Gross Domestic Product (GDP) (the level such that Income (Y) = Expenditure (E)).

2Withdrawals may also be referred to as leakages.

Outcomes and evidence requirements

Outcome 1

Demonstrate knowledge of the circular flow of income.

Evidence requirements

1.1Components of the circular flow of income are identified and their determinants analysed.

1.2The National Income (GDP) is explained using the expenditure equation Y = C + I + G + (X – M).

1.3Components of the circular flow are identified in the national accounts.

Outcome 2

Analyse the impact of a change in the components of circular flow of income on the equilibrium level of National Income (GDP).

Rangeincome and expenditure model (graphic or calculation) or circular flow of income model (injections and withdrawals);

evidence of four changes is required.

Evidence requirements

2.1The analysis determines the direction of change in the level of National Income (GDP).

2.2The multiplier effect is explained and applied in the analysis.

2.3The analysis distinguishes between nominal and real National Income (GDP).

Planned review date / 31 December 2019

Status information and last date for assessment for superseded versions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

Please note

Providers must be granted consent to assess against standards (accredited) by NZQA, before they can report credits from assessment against unit standards or deliver courses of study leading to that assessment.

Industry Training Organisations must be granted consent to assess against standards by NZQA before they can register credits from assessment against unit standards.

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 Services
SSB Code 130301 / New Zealand Qualifications Authority 2018