TMJC 2023 A Level H2 CSQ2_AP Answers

2023 A Level H2 Economics (9570) Suggested Answers to Paper 1 CSQ 2 © TAMPINES MERIDIAN JUNIOR COLLEGE Question 2: Economic Impact of an ageing population (a) With reference to Extract 5: (i) calculate and compare the old-age dependency ratio for Singapore in 1990 with that in 2020. [3] Old-age dependency ratio = Residents aged 65 years and over per 100 residents aged 20-64 years Calculation Old-age dependency ratio (1990) = 164000 ÷ 17200 ≈ 10 (1m) Old-age dependency ratio (2020) = 614000 ÷ 26260 ≈ 23 (1m) Compare Old-age dependency ratio in 2020 is 2.3 times (1m) that of 1990’s. (ii) explain one reason for the change in the old-age dependency ratio for Singapore between 1990 and 2020. [2] Note: Since o ld-age dependency ratio is the ratio of r esidents aged 65 years and over to per 100 residents aged 20 -64 years. An increase in old-age dependency ratio could be due to (1) increase in number of residents aged 65 years and over and/or (2) decrease in residents aged 20-64 years. From Extract 5, a possible reason could be the ageing population (1m) in Singapore which has resulted in the significant increase in the number of elderly aged 65 years and over. This increase in ageing population is likely to be at a higher rate than labour force since there is slower labour force growth which implies that the number of residents aged 20-64 years is increasing at a decreasing rate (1m). (b) Explain how the changes in the populations of countries shown in Figure 3 might affect aggregate supply and aggregate demand in those countries. [4] In Figure 3, it is projected that populations will decline in these countries. The decline in population may cause AD and AS in these countries to fall. A declining population would mean lesser number of domestic consumers and a larger proportion of elderly as compared to the young . Elderly consumers would be more cautious in their spending, as they expect incomes to fall drastically as they near retirement age, or those who are retired and no longer earning an income cut back on expenditure for expected rise in future health expenses. This, coupled with the overall fall in number of consumers would cause consumption expenditure to fall . Since AD=C+I+G+(X-M), AD falls , ceteris paribus.

2023 A Level H2 Economics (9570) Suggested Answers to Paper 1 CSQ 2 © TAMPINES MERIDIAN JUNIOR COLLEGE The decline in population would result in a smaller & older working population which can cause wages to rise and productivity to fall which would increase the costs of production as well as reduce the productiv e capacity of the economy. This would cause the AS of the country to fall i.e. a shift of the AS c