DEMAND, SUPPLY ELASTICITIES ( H2)
1
AJC 2011
With an influx of foreigners into Hong Kong following the recovery from the global financial crisis, the prices for private property – such as condominiums and bungalows – are set to soar. Developers are facing the crunch from the greater desire to provide more luxurious finishing and more elaborate showrooms. The city has staged a series of land auctions in the past 18 months to boost supply of land for public housing to bring down prices.
(a) Explain possible factors that could affect the price of private property. (b) Using relevant elasticity concepts, assess the impact of the above factors on the markets for various types of private property and that for public housing.
2
CJC 2011
[10]
[15]
The H1N1 pandemic in 2009 has reduced the demand for travel. The volcanic eruption in Iceland has resulted in disruptions in airline traffic over Europe for many days. At the same time, inflation has led to rising wage calls across the global economy. Assess the impact of the above events on related markets.
[25]
Households today pay on average just half the amount they were paying in early 2008 for their broadband internet connection. On the other hand, food prices have risen by 18% over the same period.
3
DHI 2011
(a) Explain the likely effects of the above price changes on households’ expenditure.
[10]
In response to the hike in food prices, some governments have released grains and frozen meat from their stockpile. (b) To what extent does the success of such a policy depend on the price elasticities of demand and supply? [15]
4
5
HCI 2011
IJC 2011
In recent years, many countries have seen a stronger surge in trade, foreign direct investment, technology transfer and labour mobility. Assess the impact of these recent developments on expenditure by consumers on luxury and non-luxury goods and services.
(a) Explain the relationship between scarcity, choice and opportunity cost. (b) Assess the extent to which these concepts are of relevance to the Singapore government when making its policy decisions.
[25]
[8] [17]
6
JJC 2011
Technological advancements in pharmaceuticals have transformed the healthcare market. Rising affluence, mounting cost pressures and increasing number of competitors in the healthcare market resulted in significant changes in healthcare prices. Assess how the healthcare market might be affected by these changes.
7
8
MI 2011
MJC 2011
Organic farmers in the United Kingdom have been affected by rising input prices and have begun turning away from organic food production in the face of declining interest from big supermarkets that have taken products off the shelves due to the recession, to make room for cheaper non-organic foods. (a) Using relevant diagrams, explain how the recession and rising input prices have affected the market for organic produce. [10] (b) Assess the relevance of price elasticity of demand, income elasticity of demand, and price elasticity of supply in explaining the effects of these issues on the organic industry. [15] China has implemented a policy to reduce production of rare earth metals which are used in the production of X-ray machines, iPhones and light bulbs. Incomes have risen in recent years, especially in the emerging economies. Assess the relative impact on consumers and producers due to the above changes.
9
NJC 2011
[25]
[25]
The price of oil experienced the sharpest rise in decades from US$32 per barrel in December 2008 to US$72 per barrel in June 2009. In 2009, interest rates offered by banks were also low and falling. Discuss how these developments might affect the markets for cars and public transport. [25]
10
NYJC 2011
‘Sales of adult fiction in hardback had fallen by over 10%, while cheaper paperback by only 6%. The price people are willing to pay is falling, while hard-cover prices are climbing. The Association of American Publishers announced that the ”explosive growth” of e-books account for 13.6% of adult fiction market in America, with burgeoning e-books sales increasing by over 1000% in the last three years after the launch of the e-book reader.’ Adapted from: The Daily Telegraph August 2011
(a) Explain the likely reasons for the overwhelming increase in sales of e-books. [10] (b) With the aid of relevant concepts, analyse the impact of the e-book trend on the publishing and related industries. [15]
11
12
13
14
PJC 2011
(a) Explain how an understanding of the concepts of price elasticity of demand and cross price elasticity of demand can aid producers in making price and output decisions. [10] (b) Discuss how an increase in goods and services tax on luxury goods might influence the revenue of producers of luxury goods and of related goods. [15]
RI 2011
(a) With reference to the market for private transport in your country, discuss whether the demand for private cars is likely to be elastic or inelastic with respect to price and income. [10] (b) How far would a knowledge of demand elasticities be useful to a government wishing to discourage the use of private cars? [15]
RVHS 2011
SAJC 2011
Better economic outlook or higher fuel prices may prompt airlines to adjust their airfares. Discuss the considerations of airlines in making fare adjustments in response to the above.
[25]
China’s economy grew at an average of 10% over the past decade. Under the terms of the EU-China WTO accession agreement, China has also agreed to substantial reductions on import tariffs for over 150 leading European exports, ranging from machinery to wines and spirits. Assess the likely impact of the rising income in China and her reduction of import tariffs on the sales of various types of EU’s exports to China and China’s domestic sales. [25]
15
16
SRJC 2011
TPJC 2011
Recent developments, such as improvement in the state of technology, nation-wide wireless internet access and phenomenal growth in emerging economies like China and India, have affected the demand for and supply of netbooks, laptops, desktop computers and similar products. Discuss how the abovementioned markets could be impacted by these developments.
[25]
With the use of relevant elasticity concepts, discuss how a shift from income tax to indirect tax can affect consumer expenditure on both rice and restaurant meals.
[25]
As the world experiences soaring international oil prices, countries like Malaysia and Indonesia have provided fuel subsidies while Singapore and Australia have not. 17
18
VJC 2011
YJC 2011
Discuss the impact of soaring international oil prices and fuel subsidies on society.
[25]
The recent rise in global prices of fuel has affected the operational costs of public transport operators. At the same time, the economy is recovering from the global recession. Discuss how the above events affect the markets for public and private transport.
[25]
MARKET STRUCTURE ( H2) 1
AJC 2011
‘Monopolistic competition is the more prevalent market structure than oligopoly in an increasingly globalised world.’ Discuss. [25] Barriers to entry enable firms to grow big to pursue market power. So a reduction in competition & a rise in consumer exploitation are inevitable in any capitalist economy.’
2
CJC 2011
(a) Explain how barriers to entry affect the market power of firms. (b) Discuss whether it is in society’s best interest for firms to grow big.
[10] [15]
The three giants in the local fast-food business are McDonald's, Kentucky Fried Chicken (KFC) and Burger King; McDonald's has over 100 outlets as the market leader. Arnold’s Fried Chicken, a locally grown firm, has recently opened its third outlet. 3
DHI 2011
(a) Explain how firms in the fast-food business can discriminate between buyers by charging different prices for the same product. (b) Discuss the extent to which the decisions of businesses like KFC and Arnold’s depend on the actions of its competitors.
[10] [10] [15] [15]
With growing environmental awareness, large cosmetic companies advertise they have invested in research to ensure their products are environmentally friendly. The aim is to increase demand and profits. 4
5
HCI 2011
IJC 2011
(a) Explain what might happen to the fixed and variable costs in the above companies and how any changes might affect their profit maximizing prices and output. (b) Discuss whether the profits of such companies will increase, and whether in the real world they will set prices and output at profit maximizing levels.
(a) Explain the relevance of barriers to entry in determining the key differences between oligopolistic competition and monopolistic competition. (b) Consider different retailers in Singapore and assess the extent to which barriers to entry may be detrimental to competition and economic welfare.
[10] [15]
[10] [15]
6
JJC 2011
Apple Inc has been the star of technological investors in recent years, outperforming powerhouses like Nokia, BlackBerry (Research in Motion). Market watchers attribute Apple Inc’s performance to its ability to be at the frontier of smart phone technology with its flagship products such as the IPhone. (a) Explain how consumer welfare can be affected by Apple Inc.’s ability to achieve economic efficiency and innovation. [10] (b) Discuss how barriers to entry can influence the behaviour of firms. [15]
7
8
9
10
MI 2011
(a) Using appropriate diagrams, distinguish between internal and external economies of scale. (b) Discuss the extent to which barriers to entry explain the differences in allocative and dynamic efficiency levels between market structures.
[10] [15]
MJC 2011
(a) Explain whether it is always advantageous for a firm to grow in size. [12] (b) Discuss how you would decide whether a firm is exerting its monopoly power. [13]
NJC 2011
(a) Explain the pricing decisions of firms in both collusive and competitive oligopolistic markets. (b) Discuss the view that firms in the oligopolistic market structure are the most likely to differentiate their products from those of their rivals.
NYJC 2011
[10] [15]
‘Barriers to entry are the only considerations necessary in a firm’s pricing and output decision making process.’ Discuss. [25]
US confectionary Mars received the all clear from the European commission to buy number one chewing gum maker Wrigley in a deal worth €15 billion. Their competitors are concerned that this would give Wrigley an unfair advantage over them. 11
PJC 2011
12
RI 2011
Firms’ pricing and output decisions depend on barriers to entry and the behaviour of competitors. Discuss.
13
RVH 2011
(a) Explain how the existence of economies of scale can affect the behaviour and performance of firms. (b) Discuss the extent to which economies of scale determines the types of market structure in Singapore.
(a) Explain how, in economics theory, firms in imperfect markets would determine the price that would maximize profits. [8] (b) Discuss the assertion that acquisitions by large firms such as Mars are desirable to society. [17]
[25]
[10] [15]
Proton, Malaysia’s largest car producer, continues to struggle with high production costs that make local cars relatively more expensive than many foreign cars. 14
15
SAJC 2011
SRJC 2011
Source: AsiaTimes Aug 2003
(a) Explain how a firm like Proton can enjoy economies of scale. [10] (b) Discuss the relevance of achieving cost savings in determining the welfare of consumers. [15] (a) Explain how firms in monopolistic competition and oligopoly compete in their respective market structure. [10] (b) Discuss whether there is more innovation and greater consumer welfare in oligopoly than in monopolistic competition. [15] “The consumer products giants Unilever and Procter & Gamble (P&G) have been fined 315m euros for fixing washing powder prices in eight European countries.”
16
TPJC 2011
BBC News (www.bbc.co.uk) 13 April 2011
(a) Explain why firms such as Unilever and P&G might be able to fix prices. (b) Consider whether the market structure in which they operate is more efficient than others.
[10] [15]
Barriers to entry confer more market power on firms in their pricing and output decisions and behaviour. 17
VJC 2011
(a) Using examples, explain how barriers to entry will confer more market power on firms. [10] (b) Discuss whether greater competition should be introduced into markets in Singapore. [15] In the real world, most firms are either monopolistically competitive or oligopolistic in nature.
18
YJC 2011
(a) Explain the above statement. [10] (b) Discuss the extent to which monopolistically competitive and oligopolistic firms exploit consumers given that they have market power. [15]
MARKET FAILURE (H2) 1
AJC 2011
The European Commission is asking the public how best to reduce the use of plastic carrier bags. It will ask if charging for the use of plastic carrier bags would be effective, or if other options would be better. Adapted from http://europa.eu, 18 May 2011
(a) Explain why the usage of plastic carrier bags may result in market failure. [10] (b) Discuss policy measures that could be adopted by the European Commission to address this issue. [15]
2
ACJC 2011
Half of the world's population enjoys fuel subsidies. The cheapest petrol is in Venezuela, at 5 cents per litre. That makes China's subsidized pump price of 79 cents seem expensive, but even this is a bargain compared with $1.04 in the United States and $2.35 in Germany where fuel taxes are imposed. Economist, 2008 Explain the economic case for these two different approaches and assess whether the pricing of fuel should instead be left to market forces. [25]
3
CJC 2011
“The Cabinet has decided to develop two Integrated Resorts comprising of museums, convention spaces, theme parks and casinos. The Singapore government continues to be involved in the development and operation of the IR, including the building up of infrastructure supporting the IR and controlling access to the casino. Adapted from PM Lee Hsien Loong Parliamentary Seating, 18 April 2005
(a) Explain the reasons why the government is involved with the development and operation of the IR. [10] (b) Discuss the effectiveness of the government policies undertaken to ensure efficient allocation of resources in the case of the IR. [15]
4
DHI 2011
The bottom 30% of working families in Singapore has now experienced stagnating real household incomes for eight to ten years. If wages continue to stagnate, there is a limit to poverty alleviation through working longer and harder, or driving the unemployment rate lower. (a) Explain the case for government intervention in the market for vocational training. [10] (b) Discuss whether you agree that employment creation is no longer the best method to alleviate poverty in Singapore. [15]
5
HCI 2011
Discuss the effectiveness of government intervention in resource allocation in the provision of merit goods and when market dominance exists. [25]
1
6
IJC 2011
Wireless@SG is a wireless broadband programme developed by Infocommunications Development Authority of Singapore. Registered Wireless@SG users are able to enjoy free wireless broadband access with speeds of up to 1 Mbps at public areas within its coverage. Wireless@SG is powered by the network of three wireless operators: iCell, M1 and SingTel. (a) Explain the key differences between “public good” and “merit good”, and consider whether Wireless@SG is an example of a public good. [12] (b) Discuss the extent to which the Singapore economy would benefit from the free provision of Wireless@SG. [13]
7
JJC 2011
(a) Using appropriate examples, explain how a private good differs from a public good and why public goods are a source of market failure. [10] (b) Assess the economic case for varying degrees of government intervention in the market for education in Singapore. [15]
8
MI 2011
(a) Analyse why immobility within the labour market and imperfect information can lead to market failure. [10] (b) Assess the policies implemented by the Singapore government to address these causes of market failure. [15]
9
MJC 2011
To solve income inequality, the USA uses a minimum wage law while Singapore believes that improving the skills of workers is the best solution. (a) Explain why income inequality is a source of market failure. (b) Using economic theory, analyse whether the above view is justified.
[10] [15]
10
NJC 2011
(a) Explain how immobility of factors of production and income inequality may affect resource allocation. [10] (b) Assess the policies currently used by the Singapore government to deal with the effects of factor immobility and income inequality. [15]
11
NYJC 2011
(a) Explain how the presence of negative externalities and market dominance can lead to market failure. [10] (b) Discuss what policies a government might adopt to achieve a more efficient allocation of resources where market dominance exists. [15]
12
PJC 2011
Sometimes, prices fail to reflect costs fully. (a) Explain why the above would be of concern to a government. (b) Assess the use of taxation by the Singapore government to deal with the above problem.
2
[10] [15]
Governments provide all public goods supplied but only some of the merit goods supplied. 3
14
RI 2011
RVH 2011
(a) Distinguish between public and merit goods. (b) Comment on how a government might intervene in the provision of these goods?
[10] [15]
Public Utilities are privately owned in some countries while publicly owned in some others. (a) Explain how the provider of a good can be determined from the characteristics of the good. [10] (b) Discuss whether electricity should be provided by the public or private sector. [15]
15
SAJC 2011
The wonders of free market often disappear when the assumptions are relaxed. (a) Explain how the free market could bring „wonders‟ to the economy. (b) Discuss the view that the government would often fare better than the free market when the assumptions are relaxed.
16
SRJC 2011
[10] [[15]
Living in a global city comes with costs; worsening traffic congestion and income inequality. (a) Explain why traffic congestion and income inequality may lead to market failure. [10] (b) Assess the policies currently used by the Singapore government to deal with the above market failures. [15]
17
TPJC 2011
(a) Distinguish between a public good and a private good and explain under which of these classifications public libraries should be placed. [10] (b) Discuss if the existence of an externality implies that the good should necessarily be provided by the government. [15]
18
VJC 2011
Consider different forms of market failure in Singapore and evaluate their significance for the efficient working of the economy.
YJC 2011
Carbon trading and carbon tax are market-based measures to reduce carbon emissions.
19
[25]
(a) Explain the need for government intervention to reduce carbon emissions. (b) Assess whether market-based measures such as carbon trading and carbon tax are most effective in reducing carbon emissions.
3
[10] [15]
MACROECONOMIC PROBLEMS AND POLICIES ( H2)
1
AJC 2011
“Declining productivity is a drag on the country‟s potential economic growth, and the global economic malaise of 2008 and 2009 has drawn attention to the urgent need to address this challenge.” Source: Asia Times, March 2010 Discuss the extent to which improving labour productivity is the most effective way of achieving the macroeconomic goals of Singapore. [25]
2
3
AJC 2011
CJC 2011
(a) Explain how the equilibrium level of national income is determined. [8] (b) Discuss the impact of an increase in the level of spending by households and firms on a country’s national income. [17]
“The Economic Strategies Committee set up in May 2009 recommends that in order to grow our economy, we will need to do so not only through increased efficiency, but restructuring our economy to provide more room for rapidly growing and innovative enterprise.” Ministry of Finance
Discuss whether this emphasis on supply-side policies is the reason why Singapore has remained relatively unaffected through this global economic crisis. [25]
4
CJC 2011
“So far the pace of recovery from the 2008-2009 recessions has been agonizingly slow, leading to jobless recovery in many economies. There is barely enough to absorb the monthly growth in the labor force and not nearly enough to offset the job losses that have occurred. Weak demand, rather than supply side troubles, is the primary cause of continued high unemployment.” The New York Times, 17 January 2011
(a) Explain the various forms of unemployment. [10] (b) Discuss the relative effectiveness of demand-side policies and supply-side policies in tackling jobless recovery of the economy. [15] [15] 5
6
DHI 2011
HCI 2011
Discuss whether supply side policies are best for achieving low inflation in the Singapore economy.
[25]
In 2009, Singapore experienced a negative growth of 1.3% and a current account surplus of US$32 billion while the United States had a negative growth of 2.6% and a current account deficit of US$378 billion. Discuss to what extent such economic data indicate that the standard of living for the average person in both countries had declined. [25]
7
HCI 2011
(a) Using examples, explain why the size of the national income multiplier for different countries may differ. [10] (b) Assess the role of the multiplier in influencing the policies used by the Singapore government in managing unemployment in recent years. [15]
The US Senate voted on 16th June 2011 to defeat a proposed extension of unemployment benefits for workers who have been jobless for nearly two years. 8
9
10
IJC 2011
IJC 2011
JJC 2011
(a) Explain the likely causes of unemployment in Singapore. (b) Assess the extent to which the Singapore government’s approach to solving unemployment may differ from the US.
Discuss the extent to which the multiplier and the degree of openness are likely to affect the vulnerability of economies to the impact of the US recession.
[10] [15]
[25]
The debt crisis engulfing the USA has caused policy makers to adopt a loose monetary policy. Interest rate in the USA fell to 0.25%, which is lower than Singapore‟s interest rate of 1.81%. Discuss the extent to which the USA has more to gain than Singapore from a fall in the interest rate. [25] Singapore‟s inflation rate will remain higher than 5 percent in the next few months even as “subdued” global growth may increase risks to the economy.
11
JJC 2011
(a) Explain why the Monetary Authority of Singapore manages its exchange rate rather than interest rates for its monetary policy. [8] (b) Discuss whether a strong Singapore dollar is the most effective policy in alleviating her internal macroeconomic problems in recent years. [17]
The Monetary Authority of Singapore revalued the currency in April 2010 and said in October 2010 it would steepen and widen the currency‟s trading band while seeking a modest and gradual appreciation. 12
MI 2011
13
MI 2011
(a) Explain Singapore’s choice of using exchange rates rather than interest rates as an instrument for its monetary policy. [10] (b) Assess the impact of the revaluation and the changes made to the currency’s trading band on the Singapore economy. [15]
Evaluate the effectiveness of supply-side policies in sustaining economic growth and improving the balance of payments position in Singapore. [25]
14
15
MJC 2011
NJC 2011
Singapore government supply-side policies have created a more dynamic and flexible labour market. Between 2003 and 2008, unemployment fell from 4.0% to 2.2% but inflation rate rose to 6.6%. (a) Explain how supply-side policies can lower the level of unemployment. [10] (b) Discuss whether the Singapore government should ever be concerned about the economic consequences of falling unemployment. [15] “To attract investment, improve incomes and achieve a higher standard of living, Singapore targets to raise labour productivity by 2 to 3 percent each year for the next decade.” Discuss the extent to which an increase in labour productivity will lead to an increase in Singapore’s standard of living. [25] “There are several potential risks to Asia‟s outlook: Unrest in the Middle East has caused oil prices to soar and the weaker growth in advanced economies could potentially affect Asia through the trade channel.”
16
NJC 2011
(a) Explain how the events mentioned may have an impact on Singapore’s economy. [10] (b) Discuss the policy measures that the Singapore government can undertake to address the impact of the above mentioned events. [15] “Singapore's unemployment rate rose to 2.1 per cent in June from 1.9 per cent in March 2011. The Ministry of Manpower (MOM) said 1,500 workers were retrenched and 400 had their contracts terminated prematurely, resulting in a total of 1,900 workers being made redundant in the second quarter of 2011.”
17
NYJC 2011
Adapted from www.todayonline.com
(a) Explain possible causes of unemployment in Singapore. (b) Assess the view that the Singapore government should focus on achieving low unemployment as its main macroeconomic goal.
[10] [15]
„Fiscal policy can be used to influence the circular flow of income to achieve economic growth‟ 18
NYJC 2011
19
PJC 2011
(a) Explain this statement. [10] (b) Assess alternative policies that might be more appropriate for the Singapore economy to achieve economic growth. [15] Countries with large trade surpluses must take steps to boost domestic demand. No nation should assume that their path to prosperity is simply paved with exports to America. (a) Explain what is meant by equilibrium in the macroeconomy using the circular flow of income. [8] (b) Discuss the extent to which countries should boost domestic demand in their pursuit of prosperity. [17]
20
21
PJC 2011
RI 2011
Assess the view that monetary policy centred on exchange rate is the most effective measure to overcome the main macroeconomic problems faced by Singapore in recent years. [25]
The Economic Strategies Committee was set up by the government in May 2009 to chart Singapore‟s future growth directions. The Committee‟s key recommendation is to raise Singapore‟s annual productivity growth from an average of 1 percent in the past decade to 2 to 3 percent over the next decade. This is a major shift from the government‟s past strategy of heavy reliance on labour inputs to generate economic growth. (a) Explain the key macroeconomic objectives of a government. (b) Discuss whether the shift towards productivity-driven growth will help Singapore achieve its macroeconomic objectives?
[8] [17]
A key feature of the Singapore economy is its openness to trade and capital flows. 22
RI 2011
23
RVH 2011
(a) Explain with the aid of examples, the features of small and open economies. [10] (b) Evaluate the assertion that economic policies in Singapore are limited mainly by the price elasticities of demand for exports and imports. [15] (a) Explain why maintaining domestic price stability is likely to be more important than other macroeconomic aims in small, open and resource-scarce economies. [10] (b) Discuss the extent to which exchange rate policy is the most effective measure in maintaining domestic price stability in Singapore. [15] In 2009, many countries introduced stimulus packages to deal with the impact of the global financial crisis.
24
25
26
RVH 2011
SAJC 2011
SAJC 2011
(a) Explain the factors that can undermine the impact of such stimulus package. [12] (b) Assess the effectiveness of the policies used in Singapore to mitigate the most pressing issue of the global financial crisis. [13] The relative importance of aggregate expenditure components in influencing the outcome of the economy differ among economies, depending on their size, openness and the government policies. (a) Explain the above statement. [10] (b) Assess the policies which the Singapore government could adopt to achieve sustainable growth for its economy. [15] Discuss whether maintaining low unemployment rate will lead to an improvement in the standard of living in an economy. [25]
27
SRJC 2011
To be considered successful, an economy needs to achieve long-term economic growth and stability. (a) Explain this statement. (b) Discuss whether supply-side policies are the most effective way for Singapore to sustain a successful economy.
[10] [15]
“With the opening of Resorts World Sentosa and Marina Bay Sands in early 2010, the Ministry of Trade and Industry projects that each of the Integrated Resorts (IRs) would add $2.7 billion to Singapore‟s Gross Domestic Product (GDP).” 28
29
TPJC 2011
TPJC 2011
Source: Economic Survey of Singapore 2010
(a) Explain possible factors that may limit the effectiveness of the integrated resorts in generating short-term economic growth in Singapore. [10] (b) To what extent might macroeconomic problems result from Singapore’s strategy to promote tourism via the integrated resorts? [15] ‘The most important goal of a government should be to achieve a sustained increase in Gross Domestic Product which would also improve standard of living.’ Discuss. [25] Singapore‟s real GDP growth was 13.9% and current account surplus growth was 32.8% in 2010. Source: Department of Statistics, Singapore
30
VJC 2011
31
YJC 2011
32
YJC 2011
(a) Explain why real GDP and current account balance are indicators of living standards in Singapore. [8] (b) Discuss the most appropriate policies that a government could adopt to achieve sustained economic growth. [17] (a) Explain why reducing income inequality and keeping unemployment rate low are important objectives to be pursued by the Singapore government in recent times. [10] (b) Discuss whether the measures adopted by the Singapore government have been successful in achieving these two objectives. [15] During the last recession in Singapore, 2008-2009, the level of GDP fell by a negative 1.3%. In 2011, during the recovery phase, the rate of growth of GDP was 14.5%. Assess how supply-side reforms can help to reduce such fluctuations in economic growth during an economic cycle. [25] „US demand will not be the engine of global growth that it was prior to the crisis. To ensure robust and sustainable global growth, trade imbalances need to be corrected.‟
33
YJC 2011
Adapted from The Straits Times, 23 May 2011
(a) Explain the determinants of sustained economic growth. (b) To what extent can the trade imbalances be solved by the trade surplus nations allowing their currencies to appreciate.
[10] [15]
International Trade ( H2) 1
2
ACJC 2011
AJC 2011
To what extent can globalization contribute towards maintaining price stability in Singapore? [25] In economics, globalisation broadens the free market to include many nations to which it had not previously reached. However, protectionism has recently been rearing its head in the form of tariff hikes by some countries in response to the global economic crisis. (a) Using demand and supply analysis, explain the pattern of trade between countries. [10] (b) Discuss whether you agree that protectionism is the best approach to deal with the challenges posed by globalisation. [15]
Higher labor costs in China have prompted companies to move production to lowerwage countries like Bangladesh, Vietnam and Indonesia. 3
4
CJC 2011
DHI 2011
Financial Times, “China‟s Era of Cheap Goods Over”, 24 March 2011
(a) Show how changing factor endowments can affect a country‟s trading pattern [10] (b) Assess whether free trade brings about greater benefits to large economies like China and Vietnam than small economies like Singapore. [15]
Whenever the government announces a rising deficit, the media routinely declare the "bad news" that the trade gap has "worsened" – no matter how good the accompanying economic news may be on inflation, employment, and growth. (a) Explain how a rising trade deficit could impact the circular flow of income. [10] (b) Discuss whether a government should actively pursue policies to correct a trade deficit. [15] Singapore‟s trade with major trading partners such as Malaysia, [the European Union], China, US, Indonesia, Japan and Hong Kong increased in 2010 due to improved global economic conditions.
5
DHI 2011
- Singstat, 14 March 2011 (a) Explain whether Singapore‟s trade patterns agree with the predictions of economic theory. (b) Discuss the extent to which globalisation has benefitted small and open economies more than large and less open ones.
[12] [13]
(a) Explain how globalisation has affected Singapore‟s pattern of trade with the rest of the world. [12] 6
HCI 2011
Singapore should not continue to rely on an export-led growth strategy as it causes much volatility to economic growth.
(b) To what extent do you agree with the above statement?
[13]
IJC 2011
(a) Analyze the impact of globalization on Singapore‟s balance of payments. (b) Assess whether exchange rate policy is the most effective policy in managing the balance of payments in the light of a rise in globalization.
[10]
8
JJC 2011
(a) Explain the economic basis for embracing free trade in Singapore. [10] (b) In the light of the economic downturn, discuss the importance of Free Trade Agreements (FTAs) in influencing the trade patterns between Singapore and the rest of the world, [15]
9
MI 2011
7
(a) Explain the basis for protectionistic measures. (b) Recommend policies for the Singapore economy to cope with the challenges of globalisation.
[15]
[10] [15]
Some economies have balance of payments deficits while others have balance of payments surpluses. (a) Explain the importance of a sound balance of payments to Singapore. 10
MJC 2011
[10]
In 2009, the Singapore government implemented a budget deficit while the Monetary Authorities of Singapore pursued zero appreciation of the exchange rate to stimulate her stagnating economy. (b) Discuss the factors that would affect the success of these two policy measures to boost economic growth in Singapore.
[15]
11
MJC 2011
(a) Account for changes in Singapore‟s pattern of trade with the rest of the world.[10] (b) Assess the relevance of protectionism in today‟s globalized world. [15]
12
NJC 2011
Discuss how globalisation affects households and firms in both developed and developing countries.
13
NYJC 2011
[25]
‘Globalization is much like fire. Fire itself is neither good nor bad. Used properly, it can cook food, sterilize equipment, form iron, and heat our homes. Used carelessly, fire can destroy lives, towns and forests in an instant.’ Adapted from www.globalenvision.org
In the light of the above statement, assess measures that the Singapore government may adopt to manage globalisation. [25]
14
PJC 2011
“Rapid globalization has brought about greater market access and partners for development, but has also placed some economies in a more vulnerable position.” Discuss. [25]
15
RI 2011
(a) Analyze the impact of globalization on Singapore‟s balance of payments. (b) Assess whether exchange rate policy is the most effective policy in managing the balance of payments in the light of a rise in globalization.
16
RVHS 2011
(a) Explain how determinants of globalization have changed the pattern of trade among countries. (b) Discuss the policies currently adopted by the Singapore government to deal with structural unemployment and widening income inequality as a result of globalization.
[10]
[15]
[10]
[15]
Globalisation is a double-edged sword, as the increased interconnectedness not only creates opportunities but also presents risks. Speech by Mrs. Lim Hwee Hua, Minister Of State For Finance And Transport At The CPA Forum, Aug 2007
17
SAJC 2011
18
SRJC 2011
Discuss the impact of globalisation and capital flows on the Singapore economy. [25]
19
SRJC 2011
(a) Explain the main causes of a balance of payments deficit of a country. (b) Discuss whether Singapore has the most to gain as a result of a depreciation of the Singapore dollar.
(a) Explain how globalisation could bring opportunities and risks to an economy. [12] (b) Discuss whether the Singapore government currently adopts appropriate policies to reduce the risks of globalisation. [13]
[10] [15]
According to the WTO, restriction of trade is not the cure for economic problems such as trade imbalances and high levels of unemployment, but it could easily provoke retaliation, which would seriously threaten jobs and growth worldwide. 20
21
TJC 2011
TJC 2011
(a) Explain how and why countries engage in protectionism. (b) Protectionism is the only viable policy available for a country to reduce both a large trade imbalance and high unemployment. Discuss.
[10] [15]
Globalisation has allowed U.S. firms to capitalize on the rapid growth in emerging markets like China, India, and Latin America, and earn much stronger profits than if they had been totally dependent on the struggling U.S. economy. Discuss the extent to which the US and the emerging economies benefit from such globalization.
[25]
22
TPJC 2011
(a) Explain the factors that contribute to the world‟s rapid movement towards globalization. (b) Analyze the possible effects of increasing globalization on the balance of payments of a country.
[10] [15]
In 2010, the total trade deficit in the US was US$497.9 billion, an increase from the US$375 billion trade deficit of 2009. Source: U.S. Census
23
24
VJC 2011
VJC 2011
(a) Explain the possible causes of the trade deficit in the US. (b) To what extent does the nature of the US economy influence policy recommendations to tackle the worsening trade deficit?
[10] [15]
Globalisation of trade and investment can raise global output. Unfortunately, the impact on prosperity both between and within different countries is very variable, with some groups suffering an absolute decline in incomes. Examine the claim that globalisation whilst beneficial overall has adverse economic consequences for certain firms and households.
[25]
„US demand will not be the engine of global growth that it was prior to the crisis. To ensure robust and sustainable global growth, trade imbalances need to be corrected.‟ Adapted from The Straits Times, 23 May 2011
25
YJC 2011
(a) Explain the determinants of sustained economic growth. (b) To what extent can the trade imbalances be solved by the trade surplus nations allowing their currencies to appreciate.
[10] [15]
