CA1.3 – Business Economics

CA1.3-Business Economics

On completion of this module, candidates will reach a competency sufficient to be able to:

• Explain the functioning of the Zambian economic system
• Explain the functioning markets and how businesses operate within those markets
• Explain the functioning of the international financial system

Syllabus topics	Weighting (%)	LO
The Zambian economic system	30	1, 2, 3 and 4
The functioning of domestic markets	50	5, 6 and 7
The functioning of the international financial system	20	8

Learning outcomes

• LO1: Provide an overview of the Zambian economic system including evolution and structure
• LO2: Describe the Zambian business environment, identifying important sectors
• LO3: Describe basic activities of commercial banks
• LO4: Explain the role of key public sector bodies in the management of the economy and markets
• DLO5: Describe the functioning of markets and the role of regulation of markets
• LO6: Describe how businesses operate within different market structures
• LO7: Explain the theories of short and long run cost behaviour and profit maximisation
• LO8: Identify the impact on Zambia of the international sector and of major national and international economic institutions

1. Explain the functioning of the Zambian economic system: LO1, 2, 3, 4
   1. Explain the key features of the Zambian economy, including the
   2. History of the development of the Zambian economy
   3. Key economic sectors, markets, products and services
   4. A description of key public bodies affecting the Zambian economy
   5. Operations of a commercial banking system
   6. Operations of a central banking system
   7. The Zambian public financial management system
   8. Outline how the Zambian economy is managed
      1. The key economic forces impacting business (inflation, government debt, balance of payments)
      2. Economic policies and management (fiscal, monetary and interest rate policy)
      3. Economic tools used to manage the economy
      4. The consequences of economic policy for business
2. Explain the functioning of domestic markets and how businesses operate within those markets: LO5, 6, 7
   1. Explain the functioning of a market, including
      1. The operation of supply, demand, and equilibrium pricing
      2. Identifying markets exhibiting price instability and how this is managed
      3. Market failure and regulation
   2. Describe the operations of different market types, including
      1. Perfect competition
      2. Different form of imperfect competition
      3. Market interventions
   3. Explain business organisation as an economic entity, including
      1. Cost behaviour in both the short and long run
      2. Profit maximisation
   4. Outline how businesses engage with markets
      1. Pricing policy
      2. Strategic policies Note. Described only at a high level to indicate that there are non-price factors to consider.
3. Explain the functioning of the international financial system
   1. Explain theories of international trade, including
      1. How free trade operates and impacts on the economy
      2. The role and forms of protectionism
      3. International trade unions
   2. Explain how balance of trade and payments operate, including
      1. Characteristics of Zambian trade
      2. Trade deficits and deficit financing
      3. Exchange rate determination and intervention policies
   3. Describe the role of key international trade and financial institutions, including
      1. World Bank
      2. IMF
      3. Aid organisations and development funding