YIJC 2023 JC2 H2 Prelim 9570 P2 QP (Final)

1 YISHUN INNOVA JUNIOR COLLEGE JC 2 PRELIMINARY EXAMINATION Higher 2 CANDIDATE NAME CG INDEX NO ECONOMICS Paper 2 Essays Additional Materials: Writing Papers Cover Pages 9570/02 12 September 2023 2 hours 30 minutes READ THESE INSTRUCTIONS FIRST Write your name, index number and civics group on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, highlighters, glue or correction fluid/tape. Answer three questions in total, of which one must be from Section A and one from Section B. Start each question (not each section) on fresh answer booklet. At the end of the examination, fasten your work for each question separately . The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 3 printed pages and 1 blank page. Turn over

2 ©YIJC2023 9570/02/Prelim/23 Answer three questions in total. Section A One or two of your three chosen questions must be from this section. 1 The increase in energy prices have increased compet ition between sugar and sugarcane-based biofuel such as ethanol, as farmers divert resources away from sugar crop to ethanol production. Together wit h sustained economic expansion, these have led to a spike in sugar prices. In some countries such as India, where sugar is a prevalent component in peop le’s everyday diet, governments are considering sugar reduction strateg ies and price controls to ease the spike in sugar prices. Source: Adapted from OECD-FAO Agricultural Outlook 2021-2030 (a) With the aid of diagrams, explain how the increase in energy prices and economic expansion are each likely to impact consumer expenditure on sugar, in a country such as India. [10] (b) Discuss the policies a government could implement t o ease the spike in sugar prices in the domestic market. [15] 2 From the perspective of individual firms, competition in the markets requires that they adopt appropriate strategies by carefully atte nding to cost and market conditions. Firms can either embark on aggressive c ost-cutting measures or engage in product differentiation to ensure they remain profitable. (a) Explain how the features of monopolistic competitio n and oligopoly affect a firm's pricing decisions in these market structures. [10] (b) Discuss whether cost-cutting measures or product di fferentiation is the more appropriate strategy for a firm to adopt, to e nsure it remains profitable. [15] 3 Power generation is currently the largest source of carbon emissions, but the sector is leading the transition to net zero emissi ons through the rapid deployment of renewables such as solar. As renewable energy targets grow across the world, clean energy giants are facing a shortage of workers with the skills needed to support their ambitious growth plans. (a) Explain how carbon emissions and factor immobility might lead to allocative inefficiency in the market for power generation. [10] (b) Discuss the policy measures that governments can adopt to address these sources of market failure in the market for power generation. [15]

3 ©YIJC 9570/02/Prelim/23 Section B One or two of your three chosen questions must be from this section. 4 Fiscal policy is a critically important tool for pr omoting inclusive growth. But as budget surpluses dry up, raising tax revenue and productivity will be key to fiscal sustainability to foster more inclusive growth. Adapted from: The Straits Times, accessed 25 th July 2023 (a) Explain what is meant by inclusive growth and sustainable growth. [10] (b) Discuss whether raising tax revenue or raising productivity is the more appropriate measure to achieve inclusive growth while maintaining fiscal sustainability. [15] 5 The Monetary Authority of Singapore (MAS) expects Singapore’s economy to grow at faster than usual pace. But falling unemplo yment, rising wages and the emergence of supply chain bottlenecks worldwide, which have forced up the prices of a range of commodities and manufacturing inputs could underpin a steady rise in inflation into 2022. Source: Adapted from The Straits Times, 28 October 2021 (a) Explain one demand factor and one supply factor that could lead to a steady rise in inflation in Singapore. [10] (b) Discuss the extent to which policies designed to manage rising inflation in Singapore is effective. [15] 6 A country’s comparative advantages might change over time and bring about varying macroeconomic implications in its economy. (a) Explain two different reasons why a country’s comparative adva ntage might change over time. [10] (b) Discuss whether a country’s gain in comparative adv antage would always lead to positive impacts on its economy. [15] - End of Paper -

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