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High Probability Content Preparation For Paper 2 2018

– **role of price in allocating resources efficiently
– **subsidies + taxes + price controls + quantity controls  impact on stakeholders
– **Education market or the role of education
– Healthcare market
– Asymmetric information + Factor immobility
– negative externality in production + sustainable growth
– **firms objectives
– EOS
– firms strategies impact on consumers, firms, or society (AE/PE/DE/equity)
– **Consequences of not achieving macroeconomic objectives
– Indicators
– **Circular flow
– **multiplier
– **Inflation cause and policies + role of exchange rate policy in singapore to curb it
– Sustainable growth and policies to address it
– **Policies to address BOP deficit
– **protectionism + Brexit
– **TOCA
– Automatic stabilisers  inclusive, stable growth
– Limitations of macroeconomic policies
– Use of macroeconomic policies in Singapore (including zero-appreciation stance)
– Pattern of trade

A Level Paper 2 Spotting Questions

1. Explain the role of prices in the free market in allocating resources in the best possible way. (10)

2. “Price controls (subsidies) have a role in improving welfare in society. But it distorts the efficiency of free market forces (and sometimes incur huge opportunity costs)” Explain the statement. (10)

3. Evaluate the role of taxation(sub/price and quantity controls) in achieving both micro and macro objectives. (25)

4. Evaluate the different (price) strategies a firm could adopt to maximise its profit. (15)

5. Assess the role of education to correct misinformed decisions in various markets. (15)

6. Assess the role of education from both a microeconomic and macroeconomic standpoint. (15)

7. Explain the cost savings for for firms and industries that might arise when their countries are in regional trade agreements. (10) (hci)

8. Discuss the likely impact of regional trade agreements on the profits and efficiency of firms (15)(hci)

9. Dd/ss changes on firms decision

10. Using the circular flow model, explain how protectionism faced by a country can affect the equilibrium level of national income. (10)

11. Discuss the extent to which the size of an economy is the main determinant in affecting the choice of macroeconomic policy tools in addressing deflation (15)

12. Explain why a country’s POT may change over time. (10) (acjc)

13. Assess whether the use of protectionistic measures to reduce trade deficit and UE can ever be justified. (15) (acjc)

14. Discuss the extent to which automatic stabilisers can achieve economic stability in light of globalisation forces. (15)

15. Explain Singapore’s usage of monetary policy. (10)

16. Explain Singapore’s choice of monetary policy (10)

17. Explain the importance of achieving internal and external macroeconomic stability. (10)

18. Explain the importance of achieving a country’s macroeconomic objectives. (10)

19. Discuss the extent to which the key macroeconomic indicators can be sufficiently used as basis for comparison of living standards between two nations. (25)

20. Distinguish between the causes of inflation in Singapore. (10)

21. Explain how a country may lose its comparative advantage over time. (10)

22. Assess the likelihood of employing protectionistic measures in light of an increasing globalised world we live in. (25)

23. GST (an ad valorem tax) in Singapore is scheduled to face a hike from 7% to 9% in coming years. Evaluate the effects on various stakeholders in the private education market due to such a tax hike. (15)

24. Qualified students can apply for various university scholarships (usually with a 3 to 4 year work bond) in Singapore. Some are jointly funded by the government and private corporations. Explain the possible opportunity costs faced by the various stakeholders in the award of such a scholarship. (10)

25. Many industries in Singapore, from banking services to food and beverages, facing a digital revolution. Local graduates trained in big data, artificial intelligence, and software architecture (known as “Techies”) are in high demand but hard to find. Coupled with an ageing population in Singapore, this shortage of skilled labour will be even more pronounced in years to come.

From both labour and product (or service) market standpoints, assess the impact of the above events on the market for Singaporean “Techies” as well as related markets. (25)

26. Discuss how different economies use different types of macroeconomic policies to achieve price stability. (15)

27. Using macroeconomic policies to alleviate a Bop deficit always causes trade offs with other objectives. Comment on the validity of the above statement. (25)

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