Discuss the most effective economic policies to move the PPC outwards. [15]

KW:

  • no need to come to a concluison (ie which one is best), but you need to say that the effectiveness depends on factor
  • move PPC outwards: this is sort of essentially saying that we want to achieve increase in LRAS --> hence we need SSP (this is a question on SSP)

intro

  • as mentioned in part a, PPC is ...
  • Draw PPC
  • to move PPC from PPC1 to PPC2 is to increase the
    • quantity and
    • quality
      of FOP
  • these FOP are CELL
  • hence we will need to use SSP
  • this essay discusses the effectiveness of the various SSP in influencing the qty and qly of FOP

body

Land

Labour

Capital

Entrepreneurship

Conclusion

  • Define Land
  • Use PEEL to explain how to increase land
    • E: land is fixed in ss in the short run but in the LR we can use land reclamation and initiatives to discover new materials
    • E: Singapore has increased her size to more than 10% since independence
    • L (link + limitations):
      • Any further increase in the land reclamation is limited due to international boundaries and shipping routes
      • Sg which has limited natural resources, it is not worth to invest a lot to explore for possible materials
      • hence the only pocsiible policy is to use more high rise buildings and building underground
    • hence land has to be well regulated to meet the various dd
  • Define labour
  • There are two main aspects to improving labour: qty and qly
  • P:Qty
  • E: depends on the size of the labour force and the no of hours pple work
  • E:
    • We can extend the retirement age
    • create incentives for people to join the workforce
    • encourgage house wives to return to the workforce
  • L:
    • there is a limit to how much we can extend retirement age
    • in many developed countries, even if there is high women participation rate there is still low birth rate/insignificant rise in populaiton, which is more detrimental to population growth
  • P: Qly
  • E:
    • we can increase the human capital
    • educate and train, and improve healthcare for these workers
    • literate, healthy and skillful workers will be more productive, since they can better adaptto new techniques and are more willing to go for upgrading
  • E: (some ssp)
  • L:
    • involves huge funding
    • a lot of time
    • changing mindset
    • it is the most important for a resource scarce country like sg
  • P: Alternative to increase qly: to have more talented immigrants
  • E: This is done by reducing PIT and making the country a better place to live
  • E: Sg has been reinventing sg by having different events at GBTB, hosting F1 and the Women's Tennis Association
    • this helps to attract tourist and make sg a more interesting place to live
  • L:
    • it might be difficult to change the mindsets of the locals
    • might be difficult to help assimilate these people into the local community (these could threaten social cohesion)
    • infrastructure and housing must be handled well too

EV: this has been overlooked by the sg govt in the 2000s, and the increase in immigrants has made the poeple unhappy which made the govt tighten its immigrants restrictions

  • Define capital
  • The qly and qty of capital affects the level of pdtivity

qty

qly

  • E: increase in qty of capital allows the amt of capital to each worker to increase
    • enable workers to produce more g+s at a faster rate
  • E:
    • the latest technology is used in the creation of capital
    • countries can tap on existing resoruces and also R and D for better technology
    • ensures a higher qty and qly of output
  • L: NOt every country has enough funds to engage in R and D

EV:

  • Instead of coming out with own money for R and D, the govt can attract FDI, who will come to the country to share their development when they invest in the country
  • the country must be policitcally stable, attractive tax rates and low operating cost

investment in social capital (eg roads and telecoms)

  • effeiciency is greatly increased when the country has a good comms and transport network

  • this is also essential in attracting FDI


  • L:


    • such investments can be very costly

EV:

  • one way to solve the previous limitation is to wokr with other countryies or companies to establish areas of economic zone known internationally
  • the host country will thus have a lot of FDI and thus learn a lot about planning and infrastructure etc
  • E:
    • Entrpreneurs are the ones who coordinae FOP, take risks and nnovate
    • The more dynamic the pool of entrpreneurs the better they can carry out initiatives to exploit market opporutnieis and innovation
    • this moves the PPC outward
  • L: However, this is difficult to be achieved in the SR as it involves education, mindset and laws

  • effectiveness of policies depends on the conditions of th economy (eg level of development of the country)


    • less developed the country, the less room it has to develop and thus less able the PPC is to be shifted outwards

  • diff policies are suitable for Sr and LR respectively


    • attracting foreign talents: SR
    • training for existing labour force: LR
    • govt should use a mix of policies

its more important to give a good evaluation than to give a lot of policies

VERY IMPT