2022 SH2 H2 Econs Prelims P2 QP

ECONOMICS 9757/02Paper 2 25 August 20222 hour 15 minutes No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Ananswer booklet will beprovidedwiththisquestionpaper. Youshouldfollowtheinstructionsonthefrontcover of the answer booklet. If you need additional answer paper ask the invigilator for a continuationbooklet. Answerthreequestions in total, of whichonemustbe from Section A, onefrom Section B andonefromeitherSection A or Section B. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of3printed pages and1blankpage. NATIONAL JUNIOR COLLEGE Economics Department © NJC 2022 9757/02/Aug/22

2 Answerthreequestions in total. Section A One or twoof your three chosen questions must befrom this section. 1 Microchips are a crucial element in the manufacturing of final goods such as cars and consumerelectronics. COVID-19pandemic in2020hadlockdowns whichresultedinbottlenecks inthesupplychain for semiconductors and changedpreferences towork-from-home. Global economic growthisprojected at -4.9% in 2020. (a) Explain why a significant shortage of microchips exists during COVID-19 pandemic in2020.[10] (b) Discuss whether consumers or producers are more likely to bear the cost of the change inmicrochip prices. [15] 2 (a) Explain why some consumer electronics megastores in Singapore like Courts and HarveyNorman would price match other consumer electronics megastores by charging the sameprices for sameproducts, but smaller consumerelectronicsstoresintheneighbourhoodwouldnot. [10] (b) Discuss whether demandor supply factorsaremoreimportantinexplainingthecoexistenceofbig businesses and small independent businesses. [15] 3 Children who grow up in lower-income families have less access to quality education. Singaporegovernment will start to level the playing field by providing more assistance to those in danger ofbeing left behind during pre-school years. Inaddition, thegovernment will alsodoublespendingonthe pre-school sector to $1.7 billion by 2022. Discuss thefactors that theSingaporegovernment shouldconsider initsdecisiontointerveneinthepre-school education market. [25] © NJC 2022 9757/02/Aug/22

3 Section B One or twoof your three chosen questions must befrom this section. 4 The Bank of Korea slashed its benchmark interest rate toarecordlowof 0.75%inanemergencymovefollowingsimilar actions by theFederal Reserveandother central banks tocombateconomicdamage from the coronavirus outbreak. Source: The Straits Times, 16 March 2020 (a) Explainthefactors that affect Singapore’s choiceof exchangeratepolicy as its mainpolicytoachieve internal stability in the economy. [10] (b) Discuss whether a fall in world interest rates would have a positive impact on Singapore’seconomy. [15] 5 Amid the COVID-19 pandemic, investment will remain weak for an extended period. Prolongedrecession will shrink the labour force and the lending capacity of financial systems. These havedamagedthesupply sideof many economies, withmanyeconomiesfacingrecessionandcostpushinflation. (a) Explainhowasustainedperiodof lowaggregatedemandmightdamagethesupplysideofaneconomy. [10] (b) Discuss whether demandmanagement or supply-sidepoliciesaremoreeffectiveinhelpinganeconomy to recover from the effects of the pandemic. [15] 6 TheUnitedStates(US)officiallynamedChinaa‘currencymanipulator’,intensifyingtensionsbetweenthe world's two largest economies. The announcement by US Treasury follows a sharp fall in thevalue of the Chinese yuan against the US dollar. China is the world's biggest user of energy,components and grain. The Chinese yuan's fall will impact economies it has strong trading links with. Source: BBC News, 6 August 2019 (a) Explain the possible causes of a fall in the value of a country’s currency. [10] (b) Discuss theextent towhichthevalueoftheChineseyuanmightimpactSingapore’seconomy.[15] © NJC 2022 9757/02/Aug/22

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