• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Analysis of Singapore's GDP and Inflation figures.

Extracts from this document...

Introduction

EPGE Pre-Module Assignment Teacher: Mr. Rodney Sim Class code: Bsc15C Name: Tan Nianbo Date: 05.12.2011 Question 1 According to the above forecast of GDP growth of Singapore, we know that it stand at 5.3% instead of 6.2% earlier. Therefore, it clearly indicates that the forecast of Singapore's GDP growth downgrade. Gross Domestic Product, it refers that during a period of time, the production of all final goods and labor value from the economy of a country or region, it is often recognized as the best index to measure national economic conditions. It not only reflects a country's economic performance, but also reflects a country's national strength and wealth. The importance of GDP can not be ignored, especially when it is mentioned in the same breath with market expectations, the actual economic growth rate or recession rate often affects the trend of financial markets. The higher the data shows that the more driving economic growth. GDP represents all the economic activity within the country, reflects the basic situation for economic growth, it is used to analyze current status of the state's economic development. ...read more.

Middle

"A strong dollar will stimulate GDP by discouraging exports and encouraging imports," says Bob McTeer, former president of the Federal Reserve Bank of Dallas. Monetary factors also affect GDP. The U.S is one of Singapore's major trading partners, the U.S. dollar exchange rate continued to decline, the relative value of Singapore dollar increase, but Singapore is a country need to reserve more foreign currency, which means it needs more exports, exporting more production needs to undervalue its own currency. Therefore, the decline in the dollar also affected Singapore's exports, led to GDP growth declined. Question 2 In my opinion, I agree with the statement without a doubt. The main aim of the government is to reduce high inflation to keep balance. Inflation, a monetary phenomenon, is an increase in money and credit. Its major consequence is raising prices. Inflation occurs when the economy's aggregate volume of money expenditures grows at a faster rate than its total real output grows. Inflation is thus an increase in the supply of money without a corresponding increase in the supply of goods and services. ...read more.

Conclusion

Fiscal policy: government should raise tax rate and reduce expenditure, for example, raising consumption tax, it makes goods more expensive, so you need to pay more consumption tax when you buy something, it will make you reduce the number of purchasing things. Thus, the total market demand will reduce at a certain level, making the overall price fall, playing an alleviative role to high inflation. Main weapon to fight against inflation after 1970 has been monetary policy, widely used by Conservatives. The main policies have included controlling interest rates and medium-term financial strategy. Also the real inflation is much caused by people's expatiation on future inflation, reducing the expectations of inflation in the future has been one of the governments' aims. The consequences of inflation are quite serious. It has bad effect on growth, because it increases uncertainty and discourages savings. It is also damaging for the balance of payment, because it makes imports cheaper. It distributes incomes in favour of profit earning, away from fixed earning pensioners, whose real income will fall. Therefore, government must play active role in managing high inflation rate by an economy all the time. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Is it possible to reduce unemployment without increasing inflation

    The economic rational is relatively straightforward: the more unemployment there is, the less bargaining power workers and their trade unions will have to negotiate increases in nominal wages. The same relationship was later on established between unemployment and changes in the general price level.

  2. Smoking in the UK - economic analysis of its costs.

    we can imagine how great extent the government increases the duty of cigarette. The taxation is about 76% of the price of a packet of cigarettes. The price of cigarettes has a major effect on cigarette consumption. Higher tobacco taxes reduce smoking and smoking related sickness people, so the number of smoker will cut down.

  1. An analysis of Why Economic Sanctions are bad. Quotes and argument.

    they resulted in the deaths of 500,000 children under the age of five between 1991 and 1998. This shows how much damage sanctions do to the population of a nation. C2: Respect for the Citizens of One's Own Nation Economic sanctions also use one's own residents as a means to the end of foreign policy goals.

  2. Economics Extended Essay - To what extent has the market for paintings in South ...

    Artists popular with speculators would see the price of their paintings increase by a great amount. Another reason why the prices rose all of a sudden was the effect of the galleries. Galleries would often delay the selling of a painting even if the buyer was offering the price the gallery wanted.

  1. Strategic and Operational Performance Assessment at Petrom

    The concept for filling stations inaugurated in 2005, PETROMV, represents the expression of a customer oriented company. The conveniences are new for the distribution sector and vary from the basic services for a filling station to additional services (restaurant, terrace and playground)

  2. Rising unemployment and inflation commentary. The above article Bah Humbug talks about the ...

    In the graph above, the equilibrium is at the point Y1 at price P1.. If there exist too much unemployment then the government can use Keynesian Demand Management techniques to bring about an increase in Ad from, AD1 -> AD2.

  1. What is the impact of the Notional Interest Tax Deduction system on investments in ...

    The economic policy has the potential to raise living standards of the Belgian people and thus can improve their lives in an immense manner. The initial effect of the tax system has been felt and has proven to be beneficial to the Belgian people.

  2. 15 Historical Economic Questions on Mercatilism and the Development of European Countries.

    By choosing the support of domestic to that of foreign industry, man intends only his own interest; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work