Explain in details why wages may be sticky downward. Explain in 200 words or more.
Category: economics
Understanding the Aggregate Demand Curve and its Components
Define and explain the Aggregate Demand Curve. Identify, define and explain in detail the four components of Aggregate Demand. Explain in 200 words or more.
Driving Economic Growth Through the National In-Country Value (ICV) Program
The National In-Country Value (ICV) Program was launched by the Ministry of Industry and Advanced Technology as part of the 50 Projects and stands as one of the key pillars of the National Strategy for Industry and Advanced Technology, known as ‘Operation 300bn’. This initiative is aimed at enhancing sustainable growth and boosting the country’s economy through the industrial and service sectors.
Please provide your insights on the following aspect:
1. Manufacturer A, operating in the Food & Beverage industry, has achieved a 20% ICV score according to their ICV certification. How can Manufacturer A in this industry increase its ICV score to 30% in the first year, and what long term strategies should be implemented to reach a 50% score by the third year? Please include examples and specific actions or initiatives that could facilitate these improvements.
2. Investor B, is planning to invest in the UAE by establishing a medicine production facility within the pharmaceutical industry. They are seeking your support to compile information that will aid in their decision making process. Please provide details on the advantages of investing in the UAE, including the support and incentives available to investors, and current challenges. Additionally, please recommend suitable locations and Emirate for the manufacturing facility, outline pros and cons of such location, shed light on relevant regulations related to the industry/investment/Emiratization they should know about them, and explain the benefits and opportunities provided by the “Make It in The Emirates” initiative and the ICV program.
Leveraging Economic and Sustainability Goals Through Strategic Partnerships
United Arab Emirates has initiated the Industrial Partnership for Sustainable Economic Development in 2022, forming a strategic alliance with Jordan, Bahrain, Egypt, and Morocco. This initiative is designed to capitalize on the unique strengths and capabilities of each participating nation to promote economic growth, sustainability, and regional stability.
Please provide your insights on the following aspects:
1. How do the economic and sustainability goals of each partner country align with those of the UAE, and what mutual benefits can be anticipated from this partnership?
2. Can you identify specific mutual benefits that might emerge from this partnership, particularly between the UAE and its partner countries? Please provide examples of industries that should be focused on and why.
3. How do the pharmaceutical and fertilizer industries compare in terms of economic impact through the partnership between Egypt, Jordan, and the UAE, and what benefits does this have for each country?
Comparative Analysis of Macroeconomic Indicators: USA, Germany, and Japan
Part B: Consider the following scenario. A new government official requested a short report comparing the gross domestic product, the inflation rate, and the rate of unemployment of three major economies. Select any three economies of your choice from the list of OECD countries and construct a report comparing these macroeconomic variables over the past 10 years. You must use relevant data from appropriate sources as discussed in the lectures.
Note: the maximum word count for part B is 750 words. You are advised to think carefully about which data are needed and how to present them in the most effective way. Remember that this is a data visualisation task, so you must produce your own data visualisations (using Stata) rather than copying other sources.
Sub-Standard Data Visualizations and Improvements
Part A: Using any published sources, find two examples of sub-standard data visualisations (charts, graphs, etc.). Describe the data in your chosen examples, explain why each of the examples is sub-standard, and suggest how this data could be presented more effectively. You must choose examples so that there are no fewer than three areas of improvement identified for each chosen visualisation. You can use examples of potentially misleading (intentionally or accidentally), incorrect, unethical, or biased data visualisation if you address the issue(s) in your discussion.
Note: the maximum word count for part A is 750 words. Data visualisation examples must be in English; the examples must be different from the ones discussed in the module.
Purpose of RCEP from Singapore’s Perspective
Case 4 – RCEP Trade Agreement
Businesses to enjoy tariff waivers as world’s largest trade deal RCEP
enters into force
The Regional Comprehensive Economic Partnership (RCEP), the
world’s largest free trade agreement involving 15 countries including
Singapore, entered into force on Saturday (Jan 1). The agreement was
signed in November 2020. Countries that have ratified the agreement
so far include Singapore, Australia, Brunei, Cambodia, China, Japan,
Laos, New Zealand, Thailand and Vietnam. It is the largest free trade
deal to date, covering about 30 per cent of global gross domestic
product and 30 per cent of the world’s population. The agreement
comprises 20 chapters, including new areas such as intellectual
property, competition policy and e-commerce.
From Saturday, businesses will be able to enjoy tariff elimination of
about 92 per cent for goods traded amongst signatory parties for which
the agreement has entered into force, the Ministry of Trade and Industry
(MTI) said. Businesses will also benefit from additional preferential
market access for specific products including mineral fuels, plastics,
other chemical products, miscellaneous food preparations and
beverages in selected RCEP markets such as China and Japan, said
MTI. Businesses could also benefit from enhanced commitments above
existing ASEAN Plus One free trade agreements in some sectors, it
added. Investors may benefit from commitments to prohibit
performance requirements and provisions that lock in future relaxation
of measures as well.
Source: Adapted and edited from CNA, 1 Jan 2022
i. Discuss the purpose of setting up RCEP from Singapore’s
perspective, and explain how the cut in tariffs under the RCEP will
benefit Singapore consumers and businesses.
ii. Discuss any TWO (2) reasons why tariffs were originally imposed
by other countries.
Phase of the Business Cycle in the USA in 2023
Case 3 – Federal Reserve Monetary Policy
US rate futures price in 50-basis-point Fed rate hike after Powell
testimony
Traders of futures tied to the Federal Reserve’s policy rate have priced
in a 50-basis-point hike in interest rates at the US central bank’s Mar
21-22 policy meeting after Fed Chair Jerome Powell said on Tuesday
(Mar 7) that continued strong inflation data could require tougher
measures.
The price of fed funds futures contracts fell, pointing to a 66 per cent
probability that the central bank will lift its benchmark overnight interest
rate to the 5.00-5.25 per cent range on Mar 22, from the current 4.50-
4.75 per cent range, according to the CME Group’s FedWatch tool. That
was up from the 30 per cent chance seen before Powell’s testimony
before the Senate Banking Committee. The futures contracts pricing
also points to firming expectations for the policy rate to rise to a 5.25-
5.50 per cent range by June. The peak funds rate is seen hitting 5.6 per
cent in September.
With the next policy meeting two weeks away, Friday’s US employment
report for February along with an inflation report next week will be
crucial in determining the pace of upcoming rate increases. Powell’s
testimony on Tuesday marked a stark acknowledgement that a
“disinflationary process” he spoke of repeatedly in a Feb 1 news
conference may not be so smooth.
Source: Adapted and edited from CNA, 8 Mar 2023
i. Identify the phase of the business cycle for USA during Year 2023.
Support your answers with actual data.
ii. Discuss whether expansionary or contractionary monetary policy
was undertaken by the Federal Reserve in 2023, and explain ONE
(1) monetary policy tool that the Federal Reserve can use to
address the economic situation.
iii. Explain how the interest rate increases by Federal Reserve would
affect USA consumption and investment. Include clearly-labelled
consumption function diagram and investment demand diagram to
support your explanation.
The Singapore GST Increase: Tax Structure, Impacts, and Alternatives
Case 2 – Singapore GST Increase
Singaporeans pay much less in taxes compared to citizens elsewhere:
Lawrence Wong
Singaporeans pay much less in taxes compared to citizens elsewhere,
but still “enjoy high quality public services”, said Deputy Prime Minister
Lawrence Wong in Parliament on Friday (Feb 24). In his closing speech
on the debate on Budget 2023, he also described Singapore’s tight
fiscal position as “very much a reality” over the medium term – hence
the need for Singapore to proceed with a second raise of the Goods
and Services Tax (GST) in 2024. “Deferring this will only store up more
problems for the future and will leave us with less resources to take care
of our growing number of seniors,” said Mr Wong, who is also Finance
Minister.
Mr Wong noted that Singapore’s tax to GDP ratio was, at 14 per cent,
“considerably lower” than most other advanced economies. “This low
tax burden rewards hard work and enterprise, and allows our people
and businesses to keep most of what they earn,” he said.
Source: Adapted and edited from CNA, 24 Feb 2023
i. Explain whether GST is a progressive, regressive or proportional
tax, and why GST is an appropriate measure for Singapore.
ii. Explain the impacts of the increase in GST on real GDP. Include
a clearly-labelled aggregate expenditure diagram to support your
explanation. (10 marks)
iii. Discuss any TWO (2) alternatives (other than GST) to raise
government revenue.
Addressing Investment Demand Decline in China: Determinants and Government Incentives
Case 1 – China Investment Demand
China seeking private investment in major projects -Xinhua
China cuts key rates as weak batch of July data darkens economic
outlook
China is seeking private investment in 4,894 major projects with total
investment of 5.27 trillion yuan ($717.69 billion), Xinhua news agency
said, citing the top state planner. The projects mainly involve urban
construction, highways, ports, agriculture and tourism, the agency
quoted the National Development and Reform Commission as saying.
China has in recent weeks unveiled a series of policy measures to aid
private businesses after the sector has been bruised by COVID-19
curbs and a wide-ranging regulatory crackdown that targeted industries
from technology to property. Fixed-asset investment by private
companies shrank 0.5 per cent in the first seven months of the year,
bigger than the 0.2 per cent decline for the first half. Investment in the
property sector tumbled 8.5 per cent year-on-year in January to July,
after shrinking 7.9 per cent in January-June, extending its fall for the
17th consecutive month.
Source: Adapted and edited from CNA, 15 Aug, 2023, 9 Sep 2023
i. Explain any ONE (1) determinant resulting in the decrease in
investment demand by private companies in China. (5 marks)
ii. Discuss any TWO (2) ways for China government to incentivise
private companies to increase investment demand going forward.