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Macroeconomics Chapter 9 and Chapter 10 mindmap, Economic development:…

- - - - Increased unemployment
      - Strain on government budget
      - Negative outlook and pessimism
      - Deflationary spiral
      - Loss of output and welfare
  - - - Economic Growth cannot be sustainable with the depletion of resources, environmental pollution
  - - - Smart nation initiatives:
      - Research, Initiatives and Enterprise 2020 (RIE2020) and AI Singapore -> to catalyse emerging breakthroughs and drive new areas of economic growth
      - SGinnovate to support Singapore startups by bridging innovation and enterprise
      - Productivity innovations grant: 40% cash grant/ 400% tax reduction is provided by IRAS (Inland Revenue Authority of Singapore) for investment by businesses in one of 6 activities which include IT, Automation equipment, RnD and training of workers.
    - - Low and attractive corporate tax rates
        Infrastructure spending (Transportation, infocommunications, business facilities), development of industrial estates.
    - - increased in qual of labour force would attract higher value FDI
      - Govt. has increased number of local govt supported unis from the initial 3 (NUS NTU SMU) to a total of 6 including SIT, SUTD and SUSS). Uni enrolment at each uni was also expanded. Increased uni grads from 25% of each cohort to 40%
        Increasing no. of university places available
      - Skills future credits
        Every Singaporean aged 25 and above has $500 credit, eligible for future top-ups by the govt., this is to encourage Singaporeans to attend courses and pursue new skills
  - - - Increase in productive capacity of an economy
        
        sustained economic growth
      - Increase in Quantity of factors of production (labour, land, capital)
        
        Increase in labour force
        
        Increase in availability of natural resources
        
        Increase in capital stock
      - Increase in quality of factors of production (labour, land, capital)
        
        Increase in labour productivity
        
        increase in land productivity
      - Increase in the level of technology
        
        lead to new capital investment possibilities → greater productivity and higher incomes → changing demand patterns and encouragement of more R&D → further technological improvements
    - - SR: does not directly increase productive capacity, affects actual growth
        
        LR: indirectly affect the economy's productive capacity
        
        if AD does not increase → actual output may not rise as fast as the increase in productive capacity → higher production potential created by supply factors cannot be actualised → gap between potential and actual output widens
    - - favourable social, cultural and political environment promotes growth
      - legal institutions provide law and order to enforce contracts between parties of economic transactions and to protect private property rights
      - enforcement of property rights incentivises hard work and wealth accumulation
        cultural attitudes towards work and material advancements are determinants of incentives to work
      - a social structure that allows fluid upward and downward mobility based on performance and merit is more conducive than a rigid social structure that puts premium on the station of one’s birth
      - political stability is vital for economic activities
    - - international trade opens up markets for exporters and enables exporting firms to enjoy EOS
        
        rate of growth of the rest of the world is important to a country with a large foreign trade sector
        
        slow growth of trading partners → slow growth in amount of exports sold → limits country’s opportunities for investment and growth
  - - - Monetary policy
        
        AS Policies
  - - - Increased level of consump leading to higher SOL
        
        Helps avoid other macro problems
        
        Enables easier redistribution of incomes
        
        Society can afford to care more for the environment
    - - current opportunity cost of growth
        
        Environmental costs and depletion of non-renewable resources
        
        Effects on employment
        
        Social effects
        
        Impact on BOP
- - - - Due to 1. Loss of output of goods and services
      - Due to 2. Fiscal costs to the government
      - Due to 3. 3. Loss of productive capacity
    - - Severe hardship and misery
      - SOL falls
      - Physical and mental health declines
      - Crime rates may increase
      - Increase in other social issues such as higher divorce rates, worsening health condition and lower life expectancy
      - In severe cases, mass protests, violence and social unrest
      - Decline in real income
      - Decline in spending
      - Rising scale of relative poverty and income inequality
      - Impact of an area with high unemployment
- - - - GDP per capita
      - Labour productivity
      - employment
      - healthy-life expectancy
    - - Median household income
      - poverty rate
      - income gini
      - wealth gini
    - - adjusted net saving
      - public indebtedness as a share of GDP
      - the dependency ratio or proportion of retirees and youths to the working-age population
      - carbon intensity of economic output