Key Economic Indicators and Standard of Living

N09
Economic measures of the Singapore economy for 2007 indicate that GDP was S$243
billion. The current account of the balance of payments was S$59 billion in surplus.
a. Explain how you might use GDP and balance of payments data to measure the
performance of an economy. [12]
b. Assess whether these economic indicators are the best measures of economic
performance and standard of living in Singapore. [13]
N12
a. How do economists compare the economic performance of different countries? [10]
b. Assess the extent to which Singapores economic performance is the main
determinant of its populations standard of living. [15]
Macroeconomic Aims, Issues and Policies
N07
a. To be considered successful, an economy needs to achieve low unemployment, low
inflation and stable economic growth. Explain this statement. [12]
b. Discuss whether fiscal policy is the most effective way for Singapore to sustain a
successful economy. [13]
N07
a. Explain the potential causes of a balance of payments deficit on current account. [10]
b. Discuss which measures, if any, a government should adopt when confronted with a
current account deficit. [15]
N08
Discuss the most appropriate policies that a government could adopt to encourage both
actual and potential economic growth. [25]
N08
Discuss the relative significance of the multiplier, the price elasticities of demand for
imports and exports, and crowding-out in influencing macroeconomic policy decisions.
[25]
N09
The relative importance of the components of the circular flow of income for a small and
open economy, such as Singapore, is likely to be different from a large and less open
economy, such as the USA.
a. Explain this statement. [10]
b. Assess whether a change in the external value of its currency is more likely to have a
larger impact on Singapore or the USA. [15]

N10
The recent worldwide recession caused many governments to re-assess their use of
fiscal policy in order to stimulate their stagnating economies.
a. Explain what would reduce the effectiveness of fiscal policy as a stimulus to the
Singapore economy.
b. Assess alternative policies that might be more appropriate in managing the Singapore
economy when faced with a worldwide recession. [15]
N10
When there are large increases in the prices of oil and other primary products, they are
usually expected to lead to rising inflation throughout the worlds economies.
Discuss the extent to which these factors are likely to affect the rate of inflation in
Singapore. [25]
N11
a. Explain the process whereby an increase in government expenditure can lead to a
bigger change in national income. [10]
b. Discuss the extent to which conflicts in government macroeconomic objectives limit
the scope for the use of fiscal policy in any economy. [15]
N11
In the study of macroeconomics, investment can take many forms including foreign
direct investment, fixed capital investment and investment in human capital.
a. Explain what is meant by these different types of investment. [10]
b. Discuss how far supply-side policies can be used to stimulate these different types of
investment. [15]
N12
Governments generally face trade-offs between different macroeconomic policy
objectives. Discuss how far a governments macroeconomic policy decisions when
faced with these trade-offs are affected by the extent to which the economy is open. [25]
N12
During 2009 the Bank of England engaged in what is known as quantitative easing by
pumping more than 200 billion into the economy. Record low levels of interest rates
have also been maintained within the UK economy. Quantitative easing and low interest
rates were also adopted by the US.
a. Explain why exchange rates rather than interest rates are the preferred choice as the
instrument of monetary policy in Singapore. [10]
b. Discuss the likely impact on the Singapore economy of quantitative easing and low
interest rates in the US and the UK. [15]

International Economics
N07
Discuss whether Singapore is among the countries to have the most to gain from
globalization. (25)
N08
a. Explain the determinants of the pattern of trade between Singapore and the rest of
the world. (10)
b. Discuss whether the Singapore government should change its policies for managing
the balance of payments.
N09
An economist stated The trend towards globalisation leaves no room for protectionism.
a. Account for the trend towards globalization. (10)
b. Discuss whether you agree with the economists view. (15)
N10
There is a general consensus among economists that protectionism is a bad thing.
a. Explain why protectionism exists. (8)
b. Assess the extent to which the Singapore governments approach to international
trade may need to be adjusted in response to a growth in worldwide protectionism.
(17)
N11
The Singapore economy is open to the world, in trade and investment. This is both a
matter of policy and necessity because of our size and limited resources. In 2008, our
trade to GDP ratio was 360%, the highest in the world.
(Ministry of Trade and Industry, Singapore, 2009)
Discuss whether the openness of the economy is beneficial or harmful to the standard
of living in Singapore. (25)