H1 Essay Question 4 Answers

2012 H1 Prelim 2 Q2a) Explain the key economic aims of a country. [10]                               Good trade             Introduction Question FOCUS  Students are expected to explain 3 key economic aims of a country, including at least one internal or external macroeconomic aim of a country.  The economic analysis should also illustrate 2 different countries and justify how an particular aim if a key aim of the country based on its unique characteristics Example 1 : Singapore  Nature of Singapore’s economy compelling need to remain plugged into global economy (open nature), constrained by a small domestic market and limited resource o KEY aim: Healthy BOP  Healthy BOP signify trade performance of Singapore Given export driven nature of the economy good trade performance high actual economic growth low cyclical unemployment achievement of 3 macroeconomic goals of the government.  Students to explain the benefits of achieving these 3 macroeconomic aims. o Key aim: Income equity (Singapore 2012 budget)  Rising cost of economic development  widening income gap between the rich and poor inn Singapore (lowest 20th percentile of the population are not facing problem of stagnating wage and retrenchment risk)  Problem further worsened by trend in globalisation  erosion of comparative advantage in low value added manufacturing quickened pace of obsolete in skills depressed wages and structural unemployment.  Students to explain the benefits of achieving income equity  Explain the different macroeconomic aims of a country  Explain that while there are many aims of the country, it is impossible to achieve all goals at the same time governments needs to prioritise on the importance of each aim and conduct cost benefit analysis to decide on the focus each year  Key aim will differ in each country depending on its nature of the economy and key aim of each government

Level Description Mark L3 Clear explanation and justification of the key economic aims of a country. Answer is well organized with application to different country context. 7-10 L2 Undeveloped analysis on the key aims of a country. Limited application to specific countries and justifying the chosen the aims. Explained at least 2 aims well but could be limited to internal goals only. 5-6 L1 Sketchy answer that demonstrates little or no economic analysis. 1-4    Example 2: US  Nature of US’s economy Largely internally driven + US’s continued weak economic recovery and against pressure of improving trade performance o Key Aim:  US to focus on improving economic growth, reducing cyclical unemployment and BOP.  Students to explain benefits of achieving these aims

b) It is said that globalisation comes at the cost of the macroeconomic objectives, environment and equity. Discuss the policies currently adopted by the Singapore government to deal with the impact of globalisation. [15]           Costs o