ACJC H2 Intro to Macroeconomics Tutorial Worksheet

1 ANGLO-CHINESE JUNIOR COLLEGE JC1 Economics H2 Introduction to Macroeconomics Tutorial Worksheet 5 Question 1 Table 1: Selected US economic indicators from 2009 – 2014 2009 2010 2011 2012 2013 2014 Real GDP (% change) -2.8 2.5 1.6 2.3 2.2 2.4 Unemployment rate (%) 9.3 9.6 8.9 8.1 7.4 6.2 Labour Force (Millions) 154.2 153.8 153.6 154.9 155.4 155.9 Inflation rate (%) -0.4 1.6 3.2 2.1 1.5 1.6 Source: World Bank, US Bureau of Labour Statistics (a) (i) State the formula to calculate unemployment rate. [1] (ii) Explain why ‘retirees’ are NOT considered as unemployed. [2] (b) Describe the trend of General Price Level in the US from 2009 to 2014. [2] (c) Compare the trend of unemployment rate and inflation rate in the US from 2011 to 2014. [2] (d) Explain what the trend of unemployment rate from 2011 to 2014 suggests about the overall performance of the US economy across the years. [3] Section A: Data Response Questions

2 Question 2 Table 2: Percentage change in real gross domestic product (GDP) 2009 2010 2011 2012 2013 Japan -5.5 4.7 -0.5 1.8 1.6 USA -2.8 2.5 1.6 2.3 2.2 China 9.2 10.6 9.5 7.8 7.7 Germany -5.6 4.1 3.6 0.4 0.1 Source: World Bank, OECD Statistics Table 3: Unemployment (% of total labour force) 2009 2010 2011 2012 2013 Japan 5 5 4.5 4.3 4 USA 9.4 9.7 9 8.2 7.4 China 4.4 4.2 4.3 4.5 4.6 Germany 7.7 7.1 5.9 5.4 5.3 Source: World Bank, OECD Statistics (a) Compare the trend of real GDP between China and Japan from 2010 to 2013. [2] (b) Explain the possible relationship between Germany’s real GDP growth rate and unemployment rate. [2] (c) Explain what the Japan’s real GDP in 2011 suggest about the overall Japan’s economic performance in that year. [2] Question 3: Asia’s Consumer Revolution Gets Serious Table 4: Singapore: Expenditure of Gross Domestic Product at 1995 Market Prices 1998 (S$ million) 1999 (S$ million) 2000 (S$ million) 2001 (S$ million) 2002 (S$ million) Total GDP 138,399 147,286 161,103 157,318 160,853 Private Consumption Expenditure 52,467 56,762 64,737 66,239 66,812 Government Consumption Expenditure 14,109 15,063 17,720 19,181 20,033 Gross Fixed Capital Formation 51,456 48,909 52,733 49,737 44,929 Increase in Stocks -7,828 -2,755 1,045 -8,917 -8,487

3 Net Exports of Goods and Services 29,622 31,219 27,362 33,656 40,145 Statistical Discrepancy -1,427 -1,912 -2,494 -2,578 -2,579 Source: Singapore Department of Statistics (a) Explain what it means by ‘Gross Domestic Product measured at 1995 market prices’? [2] (b) (i) Describe the trend for GDP at 1995 market prices in Singapore from 1998 to 2002. [2] (ii) Using the data in Table 4, account for the general trend in b(i). [3] Question 4: Circular Flow of income Consider how the following scenario might affect Singapore’s circular flow of income. Explain your answers. (a) Chinese tourists increase their spending on shopping in Singapore. (b) A rise in consumer and business confidence about the future. (c) Depreciation of Singapore’s currency. Question 5: AD/AS & Equilibrium in the macroeconomy Using the Aggregate Demand-Aggregate Supply (AD-AS) diagram, explain the possible effects of each of the changes on a country’s real national output and general price level. Make clear any assumptions that you make in your answer. (a) A rise in consumer and business confidence about the future. (b) Depreciation of a country’s currency. (c) A country embarking on a land reclamation project. (d) Higher price of crude oil. (e) Banks in the country cut interest rates. (f) The government lowers corporate tax rate. Section B: Discussion Questions

4 Question 6 Budget 2020: S$4 billion support package for households and firms amid COVID-19 outbreak Singapore's economy shrunk 13.2 per cent for the second quarter of this year compared to the same period last year, as the country enters into its worst recession since independence. “The outbreak will certainly impact our economy,” Deputy Prime Minister Mr Heng Swee keat said, noting that the tourism and aviation industries are most affected due to declining visitor arrivals to Singapore, air traffic through Changi Airport and a decline in hotel occupancy rates. The outbreak has also disrupted supply cha ins and created ripple effects on other sectors, Mr Heng said. Singapore will spend S$4 billion on a slew of new measures and enhancements to existing schemes to stabilise its economy amid the near-term uncertainties caused by COVID-19. These are some of the measures announced: ➢ 25% corporate income tax rebate for companies ➢ Jobs Support Scheme (JSS) which provides wage support to employers ➢ Cash payout (ranging from $300-$900) for eligible Singaporeans Source: Various news articles (a) Explain how the “COVID -19 outbreak” has affected Singapore's Real National Output and General Price Level. (b) Using the AD-AS diagram, explain how the above measures could prevent a further economic downturn in Singapore.

5 In this assignment, you will be working in groups to study how key events around the world have impacted the economies of different countries. It is an opportunity for students to apply macroeconomic content and understand real-world issues and is also a platform for students to hone our 21st century skills such as collaboration and communication. This assignment will be counted towards your first CA in JC2. To prepare for this, you may research independently on the following issues over the year-end holidays. Task 1: Research of Problem In groups of 4 to 6, select ONE case study from the following: • Impact of US-China trade war on USA economy • Impact of US-China trade war on China economy • Impact of Russia-Ukraine war on Russia economy • Impact of Russia-Ukraine war on Ukraine economy • Impact of Russia-Ukraine war on Singapore economy • Impact of Covid-19 pandemic on India economy • Impact of Covid-19 pandemic on Australia economy For your selected case study, research on the background of the event, the causes of the problem, and the consequences of the problem on the economy. Task 2: Data Collection Collect data on the economic statistics for your selected country for the years 2017 to 2022: • Economic growth rate • Unemployment rate • Inflation rate • Gini coefficient • Human Development Index (HDI) – a composite indicator of the overall material and non- material standard of living of its residents. You may use the world bank website (http://data.worldbank.org/), search engines or Chat GPT to do your research. You should present the data in the form of a chart or diagram. Task 3: Application of Economic Concepts Identify a specific year that your group would like to focus on. Using the AD-AS framework from your lecture notes , explain how the events in Task (1) have affected the economic indicators in Task (2). Section C: Problem-based Learning – Alternative Assessment

6 Deliverable: Video Presentation (In Term 1 2024) Each group will be required to create a video presentation based on their case study. • Video presentations should present your work from Task 1 – 3 above. • Groups may use PowerPoint or any other video editing software to c