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Discuss whether the imposition of trade barriers by an economy is the most effective measure in helping domestic industries overcome external competition.    

Intro The imposition of trade barriers such as tariffs and quotas on foreign goods and services serves to protect domestic industries from external competition brought about by free trade. However, trade barriers might not be the most effective measure as they do not address the cause of the loss of a country’s competitiveness. Hence, a …

Discuss whether the imposition of trade barriers by an economy is the most effective measure in helping domestic industries overcome external competition.     Read More »

Discuss which policies the Singapore government can adopt to reduce inflation.

Introduction: Low inflation is one of the 4 macroeconomic aims of the government and given the impact of inflation on the economy, there is a need to consider which policy can be adopted to reduce inflation. The criteria needed to know which policy should be adopted will be based on i) effectiveness in alleviating the …

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Discuss the effects of globalisation on income distribution within and across countries and the policies a government can adopt to tackle these effects.      

Introduction Define Globalisation: Increasing integration of national economies in terms of financial flows, trade, movement of factors of production, ideas and changes in information and technology. Body Discuss the effects of globalisation on income distribution across and within countries Across countries How Developed countries may experience higher economic growth as compared to Developing countries How …

Discuss the effects of globalisation on income distribution within and across countries and the policies a government can adopt to tackle these effects.       Read More »

Discuss the view that GDP has little value in the assessment of standard of living because it tells us nothing about quality of life.

Define GDP. Define standard of living. Interpret question: GDP data can provide a fairly good assessment of material well- being and hence SOL  if an appropriate statistics  such as  real GDP per head is used. However, need to register some reservations because real GDP per head has measurement & usage problems, it ignore quality of …

Discuss the view that GDP has little value in the assessment of standard of living because it tells us nothing about quality of life. Read More »

Discuss if a price discriminating monopolist would be preferred over a firm in a perfectly competitive market.

INTRODUCTION: 1. Define Price discrimination. Comparison of price discriminating monopolist and a perfectly competitive firm is made on the basis of efficiency, innovation and equity II. DEVELOPMENT Presence of economies of scale:  In a price discriminating monopoly EOS  leads to lower unit cost of production. Lower AC and lower MC.  Provision of goods: Price discrimination …

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Explain why the objectives of a firm in a perfectly competitive market may be different from the objectives of a firm in an imperfect market structure.

INTRODUCTION: Differences in characteristics : Imperfect information, Number of firms , Barriers to entry à size of market power PC firms àprice takers; imperfectly competitive firms àprice makers DEVELOPMENT: Traditional economic theory: All firms, perfectly competitive firms and imperfectly competitive firms à make their output decision based on same objective of profit maximizing.   Define …

Explain why the objectives of a firm in a perfectly competitive market may be different from the objectives of a firm in an imperfect market structure. Read More »

Explain the costs of free trade.

Intro Free trade occurs when governments do not discriminate against imports or interfere with exports by applying tariffs or quotas to imports or subsidies to exports. There are several costs when countries engage in free trade. These include a fall in economic growth and worsening of the Balance of Payments (BOP) due to increased vulnerability to external shocks, structural unemployment …

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In 2007 the rate of Goods and Services Tax (GST) in Singapore rose from 5% to 7%. Incomes also increased in that year. Explain the likely effect of this change in GST on expenditure by consumers on different types of goods.                      

Increase in GST à fall in supply illustrated by a leftward shift of SS (non-parallel shift) Illustrate with a diagram. Explain diagram. Eqm price of goods increase and eqm qty fall, cp. The impact on total expenditure (TR)  may rise or fall depending on the PED of goods. Goods with price elastic demand i.e. PED …

In 2007 the rate of Goods and Services Tax (GST) in Singapore rose from 5% to 7%. Incomes also increased in that year. Explain the likely effect of this change in GST on expenditure by consumers on different types of goods.                       Read More »