VJC econs 2018 Promo QP and SAMS

2018 Promo QP 3 H2 ECONOMICS – PROMOTIONAL EXAM 2018 QP Section A: Case Study Question [30m] Economic developments in Singapore and China Extract 1: Breaking Singapore's record streak of negative inflation After a record 24 straight months of negative readings, consumer prices in Singapore have finally stopped falling. The latest reading, which was in line with analysts' expectations, officially put an end to Singapore's longest period of negative price growth. The rise in prices of consumer goods & services has been partly attributed to production inputs becoming more expensive in recent times. UOB economist Francis Ta n also described the non - negative reading in November as an "important milestone", which may indicate "some uplift in global demand". Source: Channel NewsAsia, 29 December 2016 Source: World Bank Extract 2: Higher expectations for Singapore’s 2017 growth Singapore’s economy this year is likely to clock its fastest growth rate in three years as global growth strengthens considerably, according to gross domestic product (GDP) growth data released by the city-state's Ministry of Trade and Industry (MTI) on Thursday. Notably, trade promotion agency International Enterprise (IE) Singapore on Thursday upgraded its non-oil domestic export (NODX) growth forecast for 2017 considerably. It was previously at 0 to 2 percent; now it's lifted to 4 to 6 percent. This br ighter external outlook results from an expected stronger pace of growth in the United States and key Southeast Asian economies. Source: The Business Times, 26 May 2017 0 2 4 6 8 10 2011 2012 2013 2014 2015 2016 2017 Chart 1: GDP growth at 2010 prices (annual % change) China Singapore

2018 Promo QP 4 Extract 3: China’s economic success China has lifted more people out of poverty than anywhere else in the world: its average income per person increased fivefold between 1990 and 2000, from $200 to $1,000. Between 2000 and 2010, average income per person also rose by the same rate, from $1,000 to $5,000, moving China into the ranks of middle-income countries. This incredible success in uplifting people from poverty was delivered by a protracted period of economic growth and a series of government transfers. The question now is whether the government can repeat this success and eradicate extreme poverty entirely: after all, up to one person in ten in the country remains poor. The current economic and social five-year plan aims to eliminate all poverty by 2020, and it seems likely that this target will be reiterated in the new five -year plan to be agreed by the Chinese Communist party’s central committee next year. Economic growth will of course also need to be the sustainable kind with lower carbon emissions – no small order for a country where air pollution kills an estimated 4,000 people a day. Source: The Guardian, 19 August 2015 Extract 4: Pollution crisis is choking the Chinese economy On a Tuesday afternoon, thick white steam billows from glass factories scattered across Shahe, an industrial town in Hebei, China’s most polluted province. As in many other factory towns in the country’s industrial heartland, the mills that run 24 hours a day have created jobs and boosted government revenue but have also caused serious environmental problems. Air pollution is clearly very costly to its $11 -trillion-plus economy. It reduces China's GDP by about 6.5 percent annually, according to estimates. "Sick days and hospital visits all take a toll on the urban economy," said Anders Hove, associate director of research at the Paulson Institute. High levels of pollution are linked to serious chronic illnesses, like heart disease and lung cancer, which are costly to treat. Sources: CNBC, 16 February 2016; and South China Morning Post, 21 September 2017 Extract 5: Are China’s new green taxes tough enough to fight pollution? As China prepares to impose new levies on the discharge of industrial pollutants, environmentalists say the system needs tougher tax rates and more stringent monitoring to deter the country’s polluters. Analysts say that the tax rates are unlikely to be harsh enough to force factories to invest in equipment or new processes to control emissions – as the government hopes. The effectiveness of the environmental tax also depends on the accuracy and authenticity of pollution data, analysts said. The environmental tax law states that enterprises submit tax reports every quarter based on the emission levels recorded with their own monitoring devices. Source: South China Morning Post, 16 December 2017

2018 Promo QP 5 Extract 6: Carbon tax on greenhouse gas emissions to be levied in Singapore All facilities producing 25,000 tonnes or more of greenhouse gas emissions in a year will have to pay a carbon tax from 2020, Finance Minister Heng Swee Keat announced on Monday. The carbon tax will initially be $5 per tonne of greenhouse gas emissions from 2019 to 2023. However, the Government will review the carbon tax rate by 2023, with plans to increase it to between $10 and $15 per tonne of emissions by 2030. The finance minister said the Government expects to collect a carbon tax revenue of nearly $1 billion over the first five years, and is prepared to spend more than this in the same period to fund research & development in cleaner production methods. For households, the impact of the carbon tax will be small, at "about 1 percent of total electricity and gas expenses on average", Mr Heng said. Two companies that will be affected by the new tax expressed reservations about it. A spokesman for ExxonMobil Singapore said the petrochemical firm was committed to working with the Government to reduce the risks of climate change but added that “affordable e nergy” was important to support economic growth and ensure Singapore’s competitiveness. Adapted from The Straits Times, 19 February 2018 Questions (a) Explain one cause of inflationary pressure experienced by Singapore in November 2016. Note: This is under the topic of Inflation/Deflation (Book 10) and is not included in the 2023 Promo exam. [2] (b) Compare the GDP growth rates of China and Singapore from 2011 to 2017. [2] (c) With reference to the data, explain the reason for the change in Singapore’s GDP in 2017. [4] (d) Economic growth in China has “created jobs and boosted government revenue but has also caused serious environmental problems” (Extract 4). Discuss whether the Chinese government should always pursue higher rates of economic growth. Note: This is unde r Benefits and Costs of EG (Book 8 Section 5) and is not included in the 2023 Promo exam. [8] (e) (i) Explain how industrial air pollution may lead to market failure. [4] (ii) With reference to the data, assess the measures that the governments of China and Singapore can adopt to tackle the above market failure. [10] [Total: 30]

2018 Promo QP 6 Section B: Essay Questions [50m] Answer two questions. 1. Be it for health, environmental or ethical concerns regarding the farming of animals, Americans’ appetite for alternative meat made from plants is getting bigger than ever. At the same time, technological progress has made it more financially viable to produce such alternative meat. Discuss the effects of the above developments on the market for plant -based alternative meat and on a related market in the United States. [25] [Note: 25m single stem essay questions exist in the old syllabus, but not in the current syllabus, where essay questions come with two parts - part (a) carrying 10 marks and part (b) carrying 15 marks. That said, the content tested here is still relevant to your syllabus.] 2. Users of libraries such as the London Library in the United Kingdom and Folio: The Seattle Athenaeum in America are requir