Economic Assignment: Analysis of Production Output, Labor Market and Price Level in Singapore

Running Head: ECONOMIC ASSIGNMENT
Economic Assignment
Name of the Student
Name of the University
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Table of Contents
1. Introduction..................................................................................................................................3
2. Production output performance analysis.....................................................................................3
2.1. Gross Domestic Product (GDP)............................................................................................3
2.2. GDP growth rate...................................................................................................................4
2.3. GDP per capita analysis........................................................................................................6
2.4.Government measure adapted to achieve production output performance...........................7
3. Labor market analysis..................................................................................................................7
3.1. Definition of Unemployment and its type............................................................................7
3.2. Trend of Unemployment.......................................................................................................9
3.3. Types of unemployment in Singapore..................................................................................9
3.4. Government measure to achieve full employment.............................................................10
4. Price level analysis....................................................................................................................11
4.1. Definition of inflation and its typical cause........................................................................11
4.2. Trends of inflation..............................................................................................................13
4.3. Causes of inflation in Singapore.........................................................................................14
4.4. Government measure to achieve stable price.....................................................................14
5. Conclusion.................................................................................................................................14
6. References..................................................................................................................................16

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1. Introduction
The economic characteristic of Singapore resembles to the nature of a developed nation.
In this nation, economic reliance is mostly on a policy of free market. Singapore employs a free
trade policy with heavy export of electronic machinery and equipment, Mineral fuels,
pharmaceutical, gems and precious metal, organic chemicals and other chemicals. Among these,
the fastest growing export sectors are Optical, medical and technical apparatus. The major
imports of Singapore include Integrated Circuits, Gas Turbines, Refined Petroleum, computers
and crude petroleum.
The economic performances of Singapore economy for the last ten years are analyzedin
this paper. For evaluating economic performance the three main economic indicators such as
aggregate economic output, employment status and price level are considered. Besides free
market economy, government intervenes to promote economic performance. In order to promote
economic growth and development, saving and investment policies are undertaken by the
government. The government’s policies are designed to increase aggregate output level, achieve
a state of full employment and stability in the price level.
2. Production output performance analysis
2.1. Gross Domestic Product (GDP)
Gross Domestic Product is defines as a quantitative measures representing aggregate
economic activity of nation. It is the money values of produced goods and services within a
specific geographic region in the accounting year. There are different methods of estimating
Gross Domestic Product, the most common being aggregate expenditure method. In the method
of GDP computationeither the market value of current year or the values of a base year is used.
The former is called nominal GDP while the later is termed as real GDP (Bernanke, Antonovics

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& Frank, 2015). The real GDP determines GDP at constant prices and hence is adjusted for
inflation. Real GDP is a more accurate measure of actual output performance of the economy.
Figure 1: Real GDP in Singapore
(Source: trradingeconomics.com, 2017)
The real GDP figures of Singapore reveal that GDP has become 104973.20 Singapore
Dollar Million in the third quarter of 2017 from 104973.20 SGD Million in the previous quarter.
There is an overall rising trend for Singapore GDP at constant prices. The average GDP at
constant prices from 1975 to 2017 is recorded as 42592.22 Singaporean Dollar in Million. The
all-time highest GDP is accounted in the third quarter of 2017 and is amounts to 104973.20
million Singaporean dollar. The recorded low GDP is estimated in 1975, the GDP figure being
only 7052.10 Singaporean Dollar in Million.
2.2. GDP growth rate
Growth in GDP is the percentage change in GDP in a year with respect to its previous
year. The growth rate is computed by taking the difference between GDP of two consecutive