TMJC 2024 H2 Econs CSQ2 Answers

JC2 H2 Economics 9570 2024 Prelim Suggested Answers & Markers Report 18 Tampines Meridian Junior College 2024 JC2 Prelim H2 Economics 9570 Paper 1 Question 2: Is ASEAN winning the globalisation game? Suggested Answers (a) ‘Higher levels of education will generate greater FDI inflows.’ (Extract 1) (i) Explain how information in Figure 2 and Table 1 supports the above statement. [2] (ii) Explain why higher levels of education will generate greater FDI inflows . [2] (i) Reference from data given: Figure 2 shows that SG has the highest FDI inflows, followed by Vietnam then Thailand. Table 1 shows that adult literacy rates was highest for SG and lowest for Thailand. Thus, it can be inferred that SG with the highest education level experiences the highest FDI inflows while Thailand with the lowest education level experiences lowest FDI inflows . As such, the information in Figure 2 and Table 1 supports above statement. Markers’ Report Skills Strengths (+): What are the required skills that were well - demonstrated? Areas for improvement ( -): What are the skills that were lacking/ not well-demonstrated? Aha moment! (+) Excellent answers. Almost all students got full marks for this. (ii) Higher levels of education can lead to a more skilled workforce with higher labour productivity which can lower unit costs of production and increase profitability of investments. As a result, foreign investors are more likely to be willing to invest. Content Strengths (+): What are some concepts that were well - explained with clear linkages made? Areas for improvement (-): What are some concept gaps / conceptual errors? Aha moment! (-) Students who did not score was due to their inability to link higher education levels to improvement in labour productivity or their inability to point to lower costs or higher profits for incoming foreign firms (b) Using a production possibility curve diagram, explain how FDI inflows can affect a country’s current employment and future output. [5]

JC2 H2 Economics 9570 2024 Prelim Suggested Answers & Markers Report 19 Tampines Meridian Junior College 2024 JC2 Prelim H2 Economics 9570 Paper 1 Diagram showing movement of point nearer to PPC & outward shift of PPC (1m) Current employment: Foreign Direct Investment (FDI) inflows can lead to greater creation of capital goods, which increases the derived demand for labo ur and other key factors of production. Assuming the economy is operating inside the Production Possibility Curve PPC1 at point A whereby there are unemployed resources , this would result in an increase in the employment of idle resources and the economy can move closer to a point on the PPC e.g. Point B. Future output: FDI inflows lead to capital accumulation, which increases the capital stock in the economy, ceteris paribus. This increase in capital stock will increase the productive capacity of the economy, resulting in an outward shift of the Production Possibility Curve (PPC) from PPC1 to PPC2 , indicating a potential increase in future output. Content Strengths (+): What are some concepts that were well - explained with clear linkages made? Areas for improvement (-): What are some concept gaps / conceptual errors? Aha moment! (-) Some students were unable to produce the diagram. (-) Some students build in AD/AS analysis which was not required (-) While many students were able to explain how current employment could be affected, there were unable to link it to the PPC or how it would look like on the PPC diagram. (c) Explain one way in which the Regional Comprehensive Economic Partnership (RCEP) can affect the multiplier size of a participating country. [3] The RCEP eliminates tariffs which allows for relatively cheaper imports in the domestic market whereby MPM may increase as households spend a larger

JC2 H2 Economics 9570 2024 Prelim Suggested Answers & Markers Report 20 Tampines Meridian Junior College 2024 JC2 Prelim H2 Economics 9570 Paper 1 proportion of their additional income on imports instead of domestic goods. For a given increase in income, a larger proportion of the income is withdrawn from the circular flow, and a smaller proportion of the additional income is passed on in the inner flow to generate further streams of spending, income and output. Since k = 1/MPW which includes MPM, multiplier size is smaller. Markers’ Report Skills Strengths (+): What are the required skills that were well - demonstrated? Areas for improvement (-): What are the skills that were lacking/ not well-demonstrated? Aha moment! (+) Most students knew to unpack the trigger about participating in RCEP. (-) Many students did not provide a brief explanation of how the inner flow might be affected as a result of the participation in RCEP. Without such an explanation, their answer to change in k size became assertive whereby they relied solely on the formula to assert the change. Content Strengths (+): What are some concepts that were well - explained with clear linkages made? Areas for improvement (-): What are some concept gaps / conceptual errors? Aha moment! (+) Majority of the students were able to provide the formula for calculating k size as 1/MPW or 1/1-MPCd. (-) Some students were not sure what the MPW constituted, with some including MPC as part of MPW. (-) Some students misinterpreted the size of k as extent of multiplier effect or extent of change in NI. Hence, answers erroneously included links to change in injections in the form of X or FDI, or increase in availability of spare capacity as a result of increase in investments. (d) With reference to Table 1, discuss whether it can be said that Thailand has a higher standard of living than Vietnam in 2022. [8] Introduction: Standard of living (SOL) comprises of 2 aspects – material and non-material. To compare the SOL of both countries holistically, a variety of indicators have to be used. Development 1: SOL is higher for Thailand than Vietnam GDP per capita (USD) was higher in 2022 for Thailand. Definition of GDP + Explain that per capita data would have accounted for population size differences between Vietnam and Thailand.

JC2 H2 Economics 9570 2024 Prelim Suggested Answers & Markers Report 21 Tampines Meridian Junior College 2024 JC2 Prelim H2 Economics 9570 Paper 1 Inference: T his suggests that an average citizen in Thailand has a higher purchasing power than an average citizen in Vietnam, hence they are able to consume more normal goods. Consumption of goods and services is higher for the average citizen in Thailand and thus Th ailand can be said to enjoy a higher material SOL than Vietnam. In addition, Thailand’s life expectancy was higher than Vietnam’s. Inference: As non -material SOL are influenced by socio -economic and environmental factors, a higher life expectancy could indicate access to better quality healthcare and sanitation, as well as lesser pollution of the environment. Thus, quality of life is higher in Thailand and non-material SOL is higher. Development 2: SOL may be higher for Vietnam than Thailand That said, non -material SOL can be affected by other factors such as literacy rates. Table 1 shows that adult literacy rates is higher in Vietnam compared to Thailand. Inference: This could mean more knowledge on healthcare