Macroeconomic Issues: แบบฝึกหัด

Which of the following scenarios best illustrates the concept of cost-push inflation resulting from a supply-side shock?

A country experiences a persistent balance of trade surplus alongside high domestic inflation. Which combination of policy measures would be most appropriate to address both issues simultaneously?

Which of the following scenarios best illustrates the concept of inclusive growth in a developing economy?

According to the Marshall-Lerner condition, a depreciation of a country's currency will improve its balance of trade only if:

In the context of inclusive growth, how do transfer payments and progressive taxation affect the Gini coefficient?

Using the concept of the multiplier effect, explain how an increase in autonomous consumption in an economy with significant spare capacity leads to a more than proportionate increase in the equilibrium national income.

Explain the conflict between the macroeconomic objectives of low unemployment and price stability, and discuss how the use of supply-side policies aiming to increase productive capacity can potentially mitigate this trade-off in the long run.

Distinguish between demand-deficient unemployment and structural unemployment, and identify one specific cause for each type of unemployment as outlined in the macroeconomic issues syllabus.

In recent years, many advanced economies have faced the dual challenge of aging populations and rapid technological disruptions, leading to shifts in their long-term growth trajectories and employment patterns.

(a) Explain how a combination of an aging population and technological disruption may lead to both structural unemployment and a decline in potential economic growth. Use the Aggregate Demand/Aggregate Supply (AD/AS) framework in your explanation. \( (8) \)

(b) Evaluate the extent to which supply-side policies are the most effective way for a government to achieve inclusive and sustainable economic growth in the face of these challenges. In your answer, consider the possible trade-offs with other macroeconomic objectives. \( (17) \)

A small and open economy like Singapore often faces unique challenges in maintaining price stability and sustainable growth due to its high dependence on external trade and capital flows.

(a) Explain why a small and open economy might prefer using exchange rate management over interest rate management as its primary monetary policy tool.

(b) Evaluate the extent to which supply-side policies are necessary to complement demand-management policies in achieving long-term non-inflationary economic growth. In your answer, consider the limitations of relying solely on fiscal and monetary measures.