SRJC_H2_ECONS_9757_Q5_MS

In 2015, Singapore’s GDP at 2010 Market Prices grew by 2%, the total population grew by 0.8%, inflation was -0.5% and overall unemployment stood at 2%. Discuss the limitations of these statistics in both assessing the changes in the standard of living in the Singapore economy in 2015 and comparing it with that of other economies. [25] Introduction: Definition: Standard of living includes both material and non-material well-being of an individual or household. The material well-being consists of quantity and quality of the goods and services available for consumption while the non-material well-being include quality of life such as the quality of the environment, leisure hours. Direction: As standard of living embraces both material and non-material well-being of the population, we need to consider statistics such as GDP growth, inflation and unemployment rate to assess the change in standard of living of a country as well as a basis of comparison with that of other economies. Thesis: P1: GDP data can be used to assess the material SOL of Singapore. From the data given, Singapore’s GDP at 2010 Market Prices grew by 2%. It means that there is an increase in the value of real output (qty or volume of goods) by the country after taking inflation into consideration. With the rise in real incomes, people are better off because more goods and services have been produced and made available for consumption. More wants are satisfied, thus increasing the material standard of living of its people. However, an increase in real GDP may not reflect an improvement in the standard of living of an average Singaporean. It does not necessarily mean that the average citizen is able to enjoy 3% more goods and services. This depends on the rate of population increase. If the population grows faster than national income, the individual’s share of real national income will be falling. Hence, standard of living might be under or overstated if population growth is not taken into consideration. Hence, a more accurate indicator of changes in standard of living over time is real GDP per capita. Since population growth is 0.8% which is lower than the growth of real GDP of 2%, this means that real GDP per capita is 1.2%. Thus, a real GDP per capita growth of 1.2% could mean that on average, each person has 1.2% more goods to consume now. Overall, there is an improvement in material SOL in Singapore. Essay outline:  Explain the uses of Singapore’s GDP at 2010 Market Prices to measure material SOL. Explain the relationship why there is a need to use real GDP per capita to measure material SOL.  Discuss the uses of inflation and unemployment data to measure SOL.  Discuss the limitations of using real GDP per capita to measure SOL over time.  Discuss the limitations of using inflat ion and unemployment data to measure SOL over time.  Explain why and how real GDP per capita is used to measure SOL over space.  Ex