Public Assessment

HKDSE Econ 2021 live paper

Oct/ Nov 2021
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Live papers
 Paper 1:
 On compulsory part of the curriculum

 Answer all questions

 45 multiple choice questions

 Account for 30% of the subject marks

 60 minutes

2022: unchanged
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Live papers
 Paper 2 section A:
 On compulsory part of the curriculum
 Short questions
 All questions are compulsory
 9 short questions
 44 marks
 Account for 30% of the subject marks
⚫ (due to special arrangement under
pandemic)
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Live papers
 Paper 2 section B:
 On compulsory part of the curriculum
 Structured/essay-type/ questions
 All questions are compulsory
 3 structured questions (with 1 DRQ)
 60 marks
 Account for 40% of the subject marks
⚫ (due to special arrangement under
pandemic)
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Live papers
 Paper 2 section C: cancelled
 Total time is 2 hours 30 mins
⚫ 2022: section C also cancelled
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Summary of 2022 paper

 Paper 1 unchanged:
45 MCQs, 60 mins
Account for 30% of subject mark
 Paper 2 exam time unchanged:
2 hour 30 mins
Paper 2 mark allocation
Section A: 44 marks (30% of subject mark)
Section B: 60 marks (40% of subject mark)
Section C: cancelled
Total marks of paper 2: 104 marks
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Paper 1
 Number sat: 11602
 Overall mean score of 2021

= 57.2% (25.7)
 Overall mean score of 2020

out of 45 questions
= 61.07% (27.52)
 Overall mean score of 2019

= 58.5% (26.31)
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Paper 1 Q4
Because of COVID-19, normal schooling was disrupted. Most
schools used video communication software, such as Zoom and
Google Meet, to conduct online lessons. Suppose the school
campus was re-opened and face-to-face lessons were allowed.
Which of the following would be the LEAST important factor for
teachers to choose between online lessons and face-to-face
lessons?
A. The risk of contracting COVID-19 for teachers is lower when they
conduct online lessons. (2%)

B. Teachers have no idea what their students are doing during online
lessons because students may turn off their cameras. (17%)

C. Teachers have already spent a lot of time learning how to use the
video communication software to conduct online lessons. (60%)

D. The eyesight of teachers may be worsened by the intensive use of

the video communication software in conducting online lessons. (21%)
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Paper 1 Q10
Because of the outbreak of COVID-19, the government of a country
announced a temporary ban of dine-in services in restaurants.
Which of the following statements about restaurants under the
temporary ban is correct?

A. If the expected sales revenue generated from takeaway food

exceeds the variable cost of running a restaurant, the (46%)
restaurant will continue to operate.
B. With the extremely high cost of breaking the rental contract, the
fixed rental will affect whether the owners continue to operate (33%)
their restaurants.
C. A decrease in prices of takeaway food will necessarily
decrease the sales revenue of the restaurants. (5%)

D. Unpopular restaurants will close down before popular ones. (16%)

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Paper 1 Q29
The outbreak of COVID-19 results in a significant decline in
employment level and the volume of exports of a country.
Which of the following policies can most likely relieve the above two
problems?
A. The central bank reduces the discount rate.
(14%)

B. The government distributes cash to citizens aged 18 years

old or above. (4%)

C. The government imposes ‘employment support scheme’

to industries that are adversely affected. (43%)

D. The country devalues its currency against the currencies

of its major trading partners (39%)
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Paper 1 Q40
Suppose a government finances its expenditure by collecting tax
from the households and the amount of expenditure equals the
amount of tax collected. The effect on aggregate demand will be
__________.

A. expansionary (31%)
B. contractionary (18%)
C. neutral (27%)
D. indeterminate (23%)

(c.f. 2016 MCQ38)

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Paper 1 Q41
Mr Li is a major shareholder of a Hong Kong listed company which
makes huge profits. He has sold some of his residential properties,
and received rental income from some leased commercial buildings.
According to the above information, which types of tax does Mr Li
need to pay to the Hong Kong government?
(1) profits tax
(2) stamp duty
(3) property tax
A. (1) and (2) only (9%)
B. (1) and (3) only (31%)
C. (2) and (3) only (26%)
D. (1), (2) and (3) (34%)
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Paper 1 Q41
 The gist of the question is whether Mr Li or the company needs to
pay the profits tax. The company is a independent legal entity.
 Property tax is obvious and most candidates realise that it is
required.
 Stamp duty: textbooks and websites on IRD stated that
transaction of property need to pay stamp duty while in the reality
there are quite a number of possibility.
 Option C is the best answer: most capable candidates selected
C.
 The second popular choice for better candidates is Option D-the
intended trap.
 There are comments that the case used is not very good for
future reference.
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Paper 1 Q42
Refer to the following statistical data about Hong Kong.
2020 first quarter 2020 second quarter
(year-on-year change) (year-on-year change)
Exports of goods -9.7% -2.5%
Exports of services -37.5% -47.5%
Imports of goods -10.7% -7.4%
Imports of services -26.2% -44.6%
Based on the above information, we can conclude that
A. Hong Kong had an invisible trade deficit in 2020 second
(24%)
quarter.
B. Hong Kong’s net exports in 2020 second quarter was lower
(13%)
than that in 2019 second quarter.
C. Hong Kong’s exports of goods in 2020 second quarter was
(34%)
lower than that in 2020 first quarter.
D. Hong Kong’s total imports of goods and services in 2020
(29%)
second quarter was lower than that in 2019 second quarter.
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Paper 1 Comments
 Time: 45 MCQs in 60 mins
➔ Sufficient time
Candidates are weaker in
- Data interpretation
- Application of formula for calculation
- Integration of topics
- Macroeconomics
- Social/economic issues
- Number sense
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Paper 2
 Number sat : 11584
Overall mean score in 2021:
60.1 %
 Overall mean score in 2020:
59.56%
 Overall mean score in 2019:
57.1%
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Paper 2 Marking
 Onscreen Marking System (OSM)
 Scanned images

 Markers mark in Assessment Centres

 Section A1, A2, B1, B2, B3

 Each marker marking 15-30 marks

➔ 300 to 600 scripts

 Increase reliability
⚫ Special thanks to markers of B3 this year!
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Paper 2
 Welcome the Assistant Examiners to
comment on candidates’ performance by
Section:
 Section A1: Q1, 2, 8, 9
 Section A2: Q3, 4, 5, 6, 7
 Section B1: Q10
 Section B2: Q11, 12(a-d)
 Section B3: Q12(e-f)
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Paper 2 Section A1 (Q1, 2, 8, 9)

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Paper 2 Section A1 (Q1, 2, 8, 9)

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Paper 2 Section A1 (Q1, 2, 8, 9)

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Paper 2 Section A1 Report

Q. Highlight of the comments
1c • Mis-named the law
• Failed to provide an example of fixed factor in this
case
• Mixed up variable factors with variable costs
2 • Failed to compare correctly the ‘relative prices
between long-distance trips and short-distance trips’
before and after the surcharge
• Mistakenly stated that the relative price of long-
distance trips would be lower than that of short-
distance trips
• Wrongly concluded that the quantity demanded of
long-distance trips would increase
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Paper 2 Section A1 Report

Q. Highlight of the comments
9a • Failed to relate the definition of inferior good to the
recession

9b • Mistakenly drew a vertical supply curve for junk

food
• Neglected that the recession would cause a
rightward shift of demand curve for an inferior good
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Paper 2 Section A2 (Q3, 4, 5, 6, 7)

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Paper 2 Section A2 (Q3, 4, 5, 6, 7)

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Paper 2 Section A2 (Q3, 4, 5, 6, 7)

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Paper 2 Section A2 (Report)

3 • Confused about the relation between the airline and
air-catering in this case and mistook it for
‘conglomerate integration’
4 • Simply described the characteristics of an oligopoly
(e.g. imperfect information) without relating their
answers to the smartphone market
• Mis-asserted that price competition does not exist

5ai • Mis-regarded Mr Chan (the employee) rather than

the UK football club (the employer) as the non-
resident producing unit (from HK’s perspective)
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Paper 2 Section A2 (Report)

5aii • Used the terms ‘people’ or ‘citizens’ instead of
residents
• Mixed up the concepts of ‘resident’ and ‘resident
producing unit
• Failed to state clearly that Mr Chan’s salary was an
inflow of factor income from abroad.

5b • Wrongly stated that by picking GBP, Mr Chan

would be able to earn more income when
converted to HKD because GBP has a higher per-
unit value than USD in terms of HKD
• Carelessly put down 1 HKD = 7.8 USD under the
linked exchange rate
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Paper 2 Section A2 (Report)

6a • Overlooked the excess reserves of $300 million
• Not affected by the typo on the balance sheet
6b • Mixed up the formula of ‘change in deposit’ and ‘total
amount of deposit created’
• Used a single formula only, losing track of their
calculations when there was mistakes
• New RRR= 15% or 19% can yield full marks
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Paper 2 Section A2 (Report)

6b Remark in marking schemes:
• In real-world practice of monetary policy,
adjustment in the required reserve ratio (RRR) is
understood as a change in percentage point or
basis point (i.e. a level change in RRR) rather than
a percentage change in RRR.
• Teachers are recommended to relay this convention
to their students in the future. Actually, this
convention also applies to interest rates. For
instance, starting from an initial level of 5%, if the
central bank cuts the interest rate by 1% (to be
understood as 100 basis points), then the new
interest-rate level should be 4%.
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Paper 2 Section A2 (Report)

7 • Listed the functions of money (e.g. store of value)
or characteristics of good money (e.g. durable,
homogenous) without relating their answers to the
case of cigarettes
• Ignored the ‘apart from’ clause of the question and
mis-stating ‘not being generally acceptable’ as their
answers
• Had inaccurate elaboration on the ‘non-divisible’
property of cigarettes
• Misunderstood that cigarettes are not a good form
of money because they are not scarce in the
society
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Paper 2 Section B1 (Q10)

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Paper 2 Section B1 (Q10)

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Paper 2 Section B1 (Report)

10a • Misunderstood the meaning of the word ‘justify’
in the question, some candidates chose to
present their own views in the form of
normative statements
10bii • Described the mask loosely as rivalrous (rather
than rivalrous in consumption)
• Confused ‘rivalrous’ with ‘excludable’
• Had self-contradictory answer, e.g. ‘the CU
mask is non-rivalrous in consumption because
concurrent consumption is not possible’
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Paper 2 Section B1 (Report)

10c • Wrongly stated that ‘demand being more inelastic than
supply’ is the required condition
• Wrongly compared the changes of price and quantity,
instead of comparing their percentage changes
• Failed to label the demand curve and/or the supply
curve
• Failed to indicate that the fall in total expenditure due to
the price decrease [Area (-)] and the rise in total
expenditure due to the quantity increase [Area (+)], or
failed to show in the diagram that Area (-) > Area (+)
• Mis-read the question and discussed the shares of
subsidy benefits or changes in the consumer surplus vs.
the producer surplus
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Paper 2 Section B1 (Report)

10d • Confused the definition of positive externality with its
corresponding inefficiency condition ‘MSC < MSB’
• Explained how subsidy could improve efficiency not from the
perspective of the mask consumers, but rather from that of
the producers
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Paper 2 Section B2 (Q11, 12(a-d))

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Paper 2 Section B2 (Q11, 12(a-d))

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Paper 2 Section B2 (Q11, 12(a-d))

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Paper 2 Section B2 (Q11, 12(a-d))

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Paper 2 Section B2 (Q11, 12(a-d))

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Paper 2 Section B2 (Q11, 12(a-d))

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Paper 2 Section B2 (Report)

11a • Confused the deflationary gap with deflation
• Mis-applied the concept of efficiency to their definition of the
gap
11b • Failed to explain clearly the reasons behind the shifts in
SRAS and AD
• Failed to mention the decrease in output (as a result of the
curve shifts) before showing the widening of the output gap
in the diagrams
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Paper 2 Section B2 (Report)

11c • Did not understand the meaning of open market operation
and suggested other kinds of expansionary monetary policy
• Failed to state clearly how the drop in interest rate (due to
open market purchase) would affect aggregate output via the
various components of aggregate demand (e.g. investment,
consumption)
• Mistook the increase in money supply as a cash transfer and
claimed that it would raise disposable income directly
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Paper 2 Section B2 (Report)

12a • Simply asserted that the cost of child-rearing was high without
mentioning its increasing trend
12b • Overlooked the requirement of the question which required
them to provide reasons for the simultaneous rise in population
and decline in labour force
• Wrongly stated ‘immigrants who were mostly students,
housewives, and retired persons’ which would not cause a drop
in labour force
12c • Not realised a labour shortage would arise whenever the wage
rate lies below its market-clearing level
• Wrongly drew a supply-demand diagram for the product
(instead of labour-input) market of elderly care services
• Simply asserted that there was an increase in labour supply
without relating it to the importation of labour
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Paper 2 Section B2 (Report)

12(d) • Failed to demonstrate a good understanding of balance of
payments
• Failed to realise that imported workers with two-year contracts
are counted as HK residents
• Mistook this given case for importation of services or factor
incomes paid abroad
• Confused the term ‘current transfer’ with ‘transfer payment’
• Wrongly concluded that the current transfer of HK would
increase (rather than decrease)
• Mistook that the consumption expenditure of the imported
workers should be recorded as export of services (like tourist
expenditure)
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Paper 2 Section B3 (Q12(e-f))

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Paper 2 Section B3 (Report)

12(e) General comments:
• made a good attempt to understand the issue of declining
labour force and to analyse the two policy strategies
• Failed to evaluate the two strategies as required
• Failed to read the question carefully or use economic terms
accurately in their discussion
• Failed to present their arguments in an organised manner
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Paper 2 Section B2 (Report)

12(e) For aggregate output
• Being able to identify one or more factors affecting
aggregate output and to deduce their conclusions
• Better candidates read the question carefully and
analysed both the short-term and long-term effects
systematically in separate paragraphs
• Only focused on the effects of the strategies on
aggregate demand, and did not examine the effects on
aggregate supply nor address the problem of labour
shortage
• Jumped to the conclusion about the change in aggregate
output without discussing possible changes in long-run
aggregate supply (LRAS) and/or short-run aggregate
supply (SRAS)
• misinterpreted the question, discussing instead the
automatic market adjustment
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Paper 2 Section B2 (Report)

12(e) For government expenditure
• Mis-read the question and provided a lengthy discussion of
the effects on fiscal balance
• Mis-interpreted the cash granted to parents as an increase
in government consumption expenditure
• Regarding Strategy I, lower performing candidates claimed
that a bigger population in the future would bring higher tax
revenue (which may be true in the long term) while lowering
government expenditure (which is incorrect)
• Regarding Strategy II, a few candidates mis-stated that the
government needed to subsidise wage payments to the
imported workers
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Paper 2 Section B2 (Report)

12(e) For labour productivity
• Confused labour productivity with labour supply (labour
employment, to be exact), thinking that an increase in the
latter would necessarily raise the former
• Failed to state correctly the formula for labour productivity
• Lost focus in their discussions, not knowing exactly whether
the factors they considered would affect output (the
numerator) or labour input (the denominator) or both
• Higher performing candidates were able to make use of
Source D, citing the fact that the number of imported high-
skilled workers would exceed their lower-skilled counterparts,
and therefore reached their conclusions correctly
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Paper 2 Section B2 (Report)

12(f) • Managed to come up with a good alternative strategy, but not
all candidates could provide a proper elaboration
• Ignored the clause, ‘other than those mentioned in (e)’ in the
question, and mis-stated the provision of subsidy to parents
(i.e. Strategy I) as their answer
• Mis-asserted that the labour force could be increased via a
reduction in unemployment benefits or even an imposition of
a tax on the unemployed population, forgetting that, by
definition, the jobless has already been included in the labour
force
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Paper 2
Paper 1 paper 2 Essay
2021 Count mean SD mean SD mean SD
Chi 4641 48.93% 16.42% 50.61% 21.81% 49.42% 29.92%
Eng 6962 62.69% 19.15% 66.21% 20.41% 67.58% 28.08%

Essay Total Mean(%) SD(%)

2019 12593 53.27 33.81

2020 12023 52.33 29.25

2021 11585 60.33 30.17
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Paper 2

2021 (max 12m)

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Paper 2
General reminder:
 Don’t use colour to indicate the areas in
the diagram
 Don’t successively use symbols in the
answer
 Express the answer in a comprehensible
way: rough work written not in the
designated spaces will NOT be marked
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Paper 2 Overall comments

 Some candidates failed to demonstrate a thorough understanding of
basic economic concepts and principles, especially when applying them
to solve hypothetical or real-life problems. Candidates should
strengthen their analytical skills instead of simply regurgitating concepts
and theories
 Some candidates lacked skills to extract information from tables and
graphs as well as to draw well-labelled diagrams. Candidates should
pay special attention to the headings, labels, and axes as they are
essential to our understanding of the data presented therein.
 Some candidates had difficulty in presenting their answers in a clear
and precise way. Candidates should equip themselves with better
language abilities as well as graphical skills, and make sure that their
handwriting is legible.
 Some candidates did not read the questions carefully. Candidates
should devote special attention to the assumptions and conditions laid
down in the questions to avoid giving irrelevant answers.
 Some candidates did not seem to be well-informed about current
economic issues in the real world. Candidates should pay more
attention to economic news.
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Grading - paper marks and subject marks

 Raw mark of Paper 1 (max mark): 45
 Raw mark of Paper 2 (max mark): 104
 Adjusted mark: Marks awarded by markers are
adjusted, if necessary, to rectify lenient, strict or
erratic marking.
 Weighted paper mark: Marks of different papers
are converted to the same comparable scale,
taking into account the spread of marks in different
papers and the published paper weightings,
before they are combined to form the subject
mark.
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Grading - Grading procedures

1. Sample scripts selection

2. Standardisation
3. Post-marking exercise:
The grading panel will discuss and suggest a
provisional grading recommendation (including
preliminary cut score range) on each paper
through expert judgment base on:
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Grading – Post-marking exercise

 The level descriptors
 The standards of 2012 DSE (library scripts)
 Marked-live scripts, selected according to the total marks
 Feedback from markers on the level of difficulty of
papers
 Inter-paper correlations, the mean and standard
deviation of the current year’s papers
 Paper mark cumulative distributions
 Performance samples from 2019 and 2020 DSE (library
scripts)
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Grading – Panel of judges grading meeting

• Preliminary cut score range
• Samples scripts around the cut score range
• Group ability index:
- constructed per level
- an index for each level based on the number of
candidates in this group (this subject) achieving
that particular level in the four core subjects
- depends on the correlation of the subject and
EACH of the 4 core subjects
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Grading – Panel of judges grading meeting

Panel of judges considers:
• Preliminary cut score range
• Samples scripts around the cut score range
• Group ability index (GAI) as reference
➔ Recommendation for the cut score for the subject
• The panel of judges plays a very important and
independent role in setting a cut score for each
level based on the actual performance of
candidates
Grading – Internal meeting and 62

Public Examinations Board meeting

• Internal meeting: A senior management team
led by Secretary General of the Authority will
meet to review the recommendations of
individual subject panels.
• PEB meeting: The recommendations of the
internal meeting will be reviewed at the PEB
meeting and the final cut scores of all HKDSE
subjects must be endorsed at this meeting.
Grading – Determination of 63

level 5** and 5*

• Statistically determined
• The highest 10% (approximately) of level 5
candidates will be awarded 5**
• The next highest-achieving 30%
(approximately) of level 5 candidates will be
awarded 5*
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Grading: Standard Maintenance

• Standard of the level 1,2,3,4,5 should be
maintained across years
• the cutting scores NOT constant:
the cutting scores depends on level of difficulty
of the papers and the actual performance of the
candidates
• It is possible that a level 2 candidate perform
better in one particular question than a level 5
candidate:
the level represents the overall performance
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DRQ: Online Resources

Sample questions (with updated assessment
criteria):
Eng: Chi:

PowerPoint of
the seminar on DRQ:
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DRQ: Related Past Questions

• 2012: Nil
• 2013: Q8, Q11b
• 2014: Q7ab
• 2015: Q8
• 2016: Q11d, Q12c, Q13b
• 2017: Q10b, Q13b
• 2018: Q11, Q13b
• 2019: Q12 (with essay)
• 2020: Q11 (with essay)
• 2021: Q12 (with essay)