H1 Paper 1_tmjcprelim2024_ CSQ2_ans

JC2 H1 Economics 8843 2024 Prelim Suggested Answers & Markers Report 20 Tampines Meridian Junior College Question 2: Trouble in the United States and Singapore Suggested Answers (a) With reference to Table 2, (i) Describe what happened to the rate of inflation and the price level in US between 2019 and 2022. [3] Rate of inflation has increased. [1] General price level has increased [1] at an increasing rate. [1] OR Rate of inflation has increased [1] with a fall in 2020. [1] General price level has increased. [1] 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! (+) Majority wrote 3 distinct observations. (-) Some did not answer the question explicitly by linking to CPI instead of price levels. Students need to address the question directly. (-) A few scripts did a comparison of inflation rates and price levels between Singapore and US which is not the question intent. 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 can identify 3 main observations on inflation rate and price level. (-) A handful picked up that the largest increase in prices in US was in 2022 but the information is not the most meaningful from the data set. (-) Some students wrote that price level increases at a decreasing rate from 2019 to 2020 but the time period is too short to consider the rate of change. This is a similar issue when students explain that price level increase at an increasing rate from 2020 to 2022.

JC2 H1 Economics 8843 2024 Prelim Suggested Answers & Markers Report 21 Tampines Meridian Junior College (-) A small group of students interpreted a fall in inflation rate as a fall in price level. However, the data shows that inflation rate is still in the positive region. (ii) Explain why a nominal rate of interest of 4.5 per cent in the US in 2022 would be described as being ‘negative’ in real terms. [2] Real interest rate is the nominal interest rates adjusted for inflation. As stated in Extract 2, the interest rate is at 4.5% in 2022 and inflation rate is 8% as reflected in Table 1. Real interest rate is negative because 4.5-8 = -3.5%. OR Real interest rate is negative as inflation rate is higher than the nominal interest rate. Markers’ Report Skills Strengths (+): What are the required skills that were well - demonstrated? Areas for improvement ( -): What are the skills that were lacking/ not w