EAns - All General (J2)

Assess whether data sufficient to conclude what US has higher SOL than SG [10] 

• No need reasons for adjustments! 

• Sufficient: 3 indicators (or as many as possible) (Eg. EV market share, US GDP per capita, GINI - US lower GINI than SG -> income more evenly distributed -> more reflective of m-SOL for most US people compared to SG)

• Insufficient: US GDP per capita uses current exchange rates instead of PPP

Assess the extent to which indicators like real GDP per capita can be used to compare SOL between Serbia and SG 

• Give reasons for adjustments! 

• Estimate: SG nominal GDP per capita is consistently higher than Serbia. Even with SG higher inflation rate, SG still has higher real GDP per capita 

General limitations for CSQ/essay (between country)

1. General limitations (For between country) 

• CSQ: nm-SOL 

• Essay: nm-SOL + (COL + GDP VS GNI)

1. READ carefully! (cheaper pound leading to more demand for UK products = depreciation)

2. ANY GDP (CSQ or ESSAY) -> DEFINE GDP 

3. Rise/fall is NOT the same as high/low 

4. ANY I -> increase AD! 

• Unemployment -> Investment = AD (Do NOT use AS)

• Investments -> increase efficiency through digital infrastructure -> increase structural unemployment 

• I affects LRAS/SRAS -> say both when end point is GDP, say LRAS only when end point is unemployment 

Stupid PPC 

• More resources diverted from producing consumption to capital goods -> less resources used for capital 

1. Tax revenue = ONLY affected by GDP and by nominal income 

2. If assume spare capacity, NO DD INFLATION 

3. SG import a lot of low value goods -> refine it and sell it for high value/export high value goods (Eg. Medical services) -> so quantity of M is high BUT (X-M) still positive

State use of foreign reserves VS fiscal reserve

Foreign reserves: used for currency stability, BOT surpluses VS fiscal reserve: used for domestic spending, budget surpluses

Robust growth means…

Robust growth = increase real GDP = actual growth 

1. GDP: decrease in AD from y0 to y1 VS AD: decrease in AD from AD1 to AD2 

2. UN rate: only measures DD-UN (NOT the best indicator)  

3. AS 3 effects for GDP ONLY (NOT inflation) 

4. Containing inflation = prioritise price stability -> GPL stable 

ALL MACRO: effects 

1. ALL MACRO: effects 

• R1: SOL 

• R2: Other macro 

• For inflation -> can say micro IF CSQ got give evidence 

1. ALWAYS look at INTENT of policy (Eg. SS policy: UCOP, S-UN, export competitiveness, PC) 

2. ALWAYS ER/IR/Fiscal + SSP 

3. Cut in corporate tax rate 

• LOTS (Eg. Explain), just say more W/A to invest

• HOTS, say MB MC stuff 

Yf is…

full employment level of national income FELONY 

Government spending on infrastructure will affect…

Government spending on infrastructure (Eg. MRT) will affect BOTH AD and AS (Increase productivity -> capital accumulation -> PC increase AND UCOP decrease) 

1. Government measures to increase competition in telecommunication industry (ONE industry) -> MUST say: All firms from other industries need telco networks 

2. Tax incentives: incentivise firms to provide training for workers (NOT households)