Production Output Performance Analysis by GDP, GDP per capita and GDP Growth Rate

This essay presents the production output performance analysis by GDP, GDP per capita and GDP growth rate. It also presents the labor market analysis by the unemployment rate. It demonstrates the price level analysis by inflation.

Running head: ECONOMICS
Economics

ECONOMICS 2
Introduction
This essay presents the production output performance analysis by GDP, GDP per
capita and GDP growth rate. It also presents the labor market analysis by the
unemployment rate. It demonstrates the price level analysis by inflation.
Real GDP
(Sources: Trading economics, 2018).
The real GDP growth rate
(Sources: Trading economics, 2018).
Real GDP per capita analysis

ECONOMICS 3
(Sources: Trading economics, 2018).
GDP demonstrates the value of all final products and services legally manufactured in
the economy in a specified time period. The real economic growth rate is demonstrated
as a percentage that indicates the rate of transformation in GDP of the country from one
year to next. In addition, real GDP per capita is an extent of whole economic
productivity of nation separated by quantity of individuals and can be altered with
inflation. It is practiced for comparing the wealth amid nation and eventually (Rodan,
2016).
As per the analysis, it could be stated that Real GDP is increased by 192.41 in 2010.
Moreover, real GDP is declined in the year of 2017. In addition, GDP per capita is
declined in the year of 2010 as compared to previous years. Thus, it can be stated that
the economic growth of Singapore is declining (Trading economics, 2018).
Singapore government has implemented different measures to attain the production
output performance, which is discussed as given below:
Government cuts down in taxes for increasing the disposable income and motivate
spending. But, lower taxes will gain the budget deficit and will lead to increase
borrowings. The expansionary fiscal policy is significant in a recession such as; in the
case of declining of consumer spending (Chiu, 2018).
The government may cut the interest rate to increase the domestic demand. This would
lead to achieving the production output performance.

ECONOMICS 4
Government plays important role in offering the political and economic stability that
makes competent in usual economic practices to take place. In addition, political stress
and uncertainty may discourage the economic expansion (Su, Ang, & Li, 2017).
The government can invest in infrastructure to gain the productive capacity and declines
obstruction. It can use deregulation and privatization for gaining the productivity and
efficiency (Friedman, 2017).
(Sources: Trading economics, 2018).
Unemployment is illustrated as a condition in which an individual of working period is
not proficient for performing task but would like to do full-time job.
Demand Deficient Unemployment type of unemployment may create in a recession and
stages of very low expansion. When there is inadequate aggregate demand then the
company can decline output. When the company will decline the output then they will
employ fewer employees. Companies will either decline in recruitment or discharge the
employees. In the case of a deeper recession, there would be chances of more demand
deficient unemployment. It could be a key cause of unemployment that is known as
cyclical unemployment (Yeung, 2017).
Structural Unemployment kind of unemployment created because of inefficiencies in the
labor market. This may create because of mismatch of geographical location as well as
skills. For instance, structural unemployment can be created because of occupational
immobility and technological alteration (Yien, Abdullah, & Azam, 2017).
Under the Occupational immobility, There might be the availability of proficient jobs;
however different employees may not have the relevant proficiency. In some cases, a

ECONOMICS 5
company can struggle for recruiting during the periods of high unemployment. It occurs
due to occupational immobility (Harvie & Van Hoa, 2016).
When an economy may go through the technological alteration then the performance of
some industries would decline. It would likely to lead the structural unemployment. For
instance, new technology can make coal mines for closing down and leaving different
coal miners unemployed (Zhang, 2018).
Frictional unemployment may create when employees are in among jobs such as
school leavers may find by taking time. This is known as frictional unemployment in the
economy as an individual takes time for finding a job as per their competencies (Irpan,
Saad, Nor, Noor, & Ibrahim, 2016).
In current times, Singapore is facing different types of unemployment such as cyclical,
structural and frictional unemployment. In this way, frictional unemployment is
transitional unemployment because people moving between jobs. For instance, newly
redundant employees entering into labor market can take time for addressing the
feasible jobs at wage rate they are organized to accept. There are different people who
are jobless for a shorter period whilst entailed in the finding of job (Irpan, Saad, R. &
Ibrahim, 2016).
Cyclical unemployment is unintentional joblessness because of inadequate aggregate
demand for products and services. In addition, In Singapore, there is growing cyclical
unemployment at the time of international economic disaster of 2008 and during 2011 in
which its key trading associate such as USA faced attacks of violence. It may decline
deal with Singapore because of the narrowing the economy of US (Singh, & Singh,
2015).
Automation can create the structural joblessness as an individual are ready jobless due
to capital-labor exchange. Along with this, there are high amount of jobless in low
proficiency industry hence it is difficult for increasing re-job rather than investing into re-
training. This issue is key professional immobility (Harvie, & Van Hoa, 2016).
Fiscal policy can decline joblessness by supporting to gain AD with the time of
economic growth. The regime would require tracking expansionary fiscal policy. It
entails to cut down the taxes and gaining government spending. Lower taxes gain
disposable income such as VAT cut to 15% in the year 2008. Hence, it helps to decline

ECONOMICS 6
the consumption and leading to increasing aggregate demand (AD) (Yien, Abdullah, &
Azam, 2017).
Monetary policy will entail cutting the interest rate. In addition, lower rates may decline
the borrowing costs and encourages an individual for spending and investing. It gains
aggregate demand and supports for gaining GDP. It declines demand deficient
joblessness. Furthermore, declining interest rates will decline the exchange rate and
create exports more viable (Yeung, 2017).
The aim of Education and training is to provide the long-standing jobless new
proficiency that makes competent to address jobs for building industries such as retrain
jobless steel employees to have basic IT proficiency that helps to address work in
service segment. But, despite offering an education and training plan, the unemployed
might be unwilling or unable to learn new proficiency. It should take a different year for
reducing unemployment (Friedman, 2017).
Companies can provide tax breaks and subsidies to take on enduring unemployed. It
facilitates new confidence and one the job training. But, it would be costly and it may
motivate the company to replace the existing employees with the long-term
unemployment to get advantageous from the tax cut down (Chiu, 2018).
Inflation trends
(Sources: Trading economics, 2018).
Inflation is defined as increases in price. Moreover, inflation is a circumstance of
sustainably increase in the general price level in an economy. Moreover, inflation

ECONOMICS 7
indicates that an increase in the cost of living as the prices increase in goods and
services. The main cause of inflation can be either increase in aggregate demand or
cost-push factor (Su, Ang, & Li, 2017).
Under the Demand-pull inflation, when an economy is nearest to full time job then
increases in AD may lead to increases in the level of price. As the company arrives at
full capacity then they can increase in the prices of goods and services. It may lead to
inflation. In addition, when a nation has a high rate of full employment but there is a
shortage of workers, then employees can get higher wages. This may lead to an
increase in the spending power (Friedman, 2017).
(Sources: Friedman, 2017).
AD can gain because of increases in different elements such as C+I+G+X-M. This tends
to increase in the demand-pull inflation when growth of economic is greater than the
long-run tendency growth rate. In addition, the longer time movement rate of economic
growth can be assessed by enlargement in productivity (Yeung, 2017).
Under Cost-push inflation, when there is gain in the cost of the company then the
company will pass this to customers. There would be chances of shifting the curve in
the left of AS (Singh, & Singh, 2015).

ECONOMICS 8
(Sources: Singh, & Singh, 2015).
There are different causes of Cost-push inflation:
Rising wages is causes of Cost-push inflation. When trades union can demonstrate by
the union then they can negotiate to get maximum wages. Furthermore, the rising wage
is a key reason for cost-push inflation as wages could essential cost for different firms.
Moreover, higher wages can lead to increasing the demand (Harvie, & Van Hoa, 2016).
Rising house price cannot directly create inflation, however, it can create facourable
wealth effect and motivate for economic growth related to consumer-led. It may
ultimately reason of demand-pull inflation (Irpan, Saad, & Ibrahim, 2016).
Inflation is the constant increases in general level of price for a set of goods in over a
time period and could be caused of increasing aggregate demand at the higher rate as
compared to aggregate supply, and import- price push inflation (Zhang, 2018).
(Sources: Zhang, 2018).
While aggregate demand increases faster than the aggregate supply then there would
be higher chances of increasing the price level and it would be a key cause of inflation
in Singapore.

ECONOMICS 9
Furthermore, inflation could be increased in Singapore in the form of import price push
inflation. It is an effective reason of Singapore. This nation is highly relied on import
from other nations such as China and Malaysia because of small and open financial
system that have some natural resources. It imports and exports the expenditure in over
three times of GDP in Singapore. It indicates that while the inflation rate in another
nation is moderately higher then it will have import at a comparatively higher rate. It may
cause increases in the price of a given set of products. There may be inflation due to
import price push inflation. For combating the inflation in the nation, Singapore can use
integration of monetary, fiscal and supply-side policies (Singh & Singh, 2015).
In the Singapore, monetary policy is significant to maintain low inflation. The
government can increase the interest rate as it would support for declining the growth of
aggregate demand in Singapore economy. The declining growth may tend to decline
the inflation. Moreover, higher rates of interest may decline the spending of consumers
due to different reasons. It is assessed that increase interest rate may increase cost of
borrowing and discourage the customers from spending as well as borrowing.
Moreover, increased interest rates make it more attractive for saving money. In addition,
the increased interest rate may decline the disposable income of mortgages. Along with
this, the higher interest rate may gain the worth of exchange rate for declining the
exports and increasing the imports (Zhang, 2018).
The given diagram shows the fall in aggregate demand to decline the inflation.

ECONOMICS 10
Supply-side policies are used for increasing the long-term competitiveness as well as
productivity. For instance, it was expected that deregulation and privatization will enable
the company to become more productive as well as competitive. Hence, supply-side
policies can support to decline the inflationary stresses in the long-time. But, supply-side
policies are highly used in the long-run and it cannot be practiced for declining sudden
increases in the inflation rate. There is no guarantee of government supply-side policies
for reducing the inflation (Harvie & Van Hoa, 2016).
It is another demand-side policy that entails the government changing tax with spending
level for influencing the level of AD. For declining inflationary pressures, government
can gain tax and decline spending of government. It would decline AD (Yeung, 2017).
Conclusion
From the above interpretation, it can be concluded that real GDP is increasing and GDP
per capita is declining. It can be summarised that there are certain government
measures for increasing economic growth such as Expansionary fiscal policy,
Expansionary monetary policy, Stability, and Supply-side policies. It can be summarised
that unemployment rates are declining due to different causes such as cyclical,
structural and frictional unemployment. Certain policies can decline the unemployment
rates such as Fiscal Policy, Fiscal Policy, Education and training, and Employment
subsidies. Furthermore, the inflation rate is declining due to certain causes of inflation in

ECONOMICS 11
Singapore like AD rises at the higher rate as compared to AS, and import- price push
inflation. Certain strategies used by the Singapore government for avoiding the inflation
such as Monetary Policy, Supply Side Policies, and Fiscal Policy.

ECONOMICS 12
References
Chiu, S. W. K. (2018). City states in the global economy: Industrial restructuring in Hong
Kong and Singapore. UK: Routledge.
Friedman, B. M. (2017). The moral consequences of economic growth. In Markets,
Morals, and Religion (pp. 29-42). UK: Routledge.
Harvie, C., & Van Hoa, T. (2016). The causes and impact of the Asian financial crisis.
UK: Springer.
Irpan, H. M., Saad, R. M., & Ibrahim, N. (2016). Investigating Relationship between
Unemployment Rate and GDP Growth in Malaysia. International Information Institute
(Tokyo). Information, 19(9B), 4057.
Irpan, H. M., Saad, R. M., Nor, A. H. S. M., Noor, A. H. M., & Ibrahim, N. (2016, April).
Impact of foreign direct investment on the unemployment rate in Malaysia. In Journal of
Physics: Conference Series (Vol. 710, No. 1, p. 012028). UK: IOP Publishing.
Rodan, G. (2016). The political economy of Singapore's industrialization: national state
and international capital. USA: Springer.
Singh, S., & Singh, A. (2015). Causal Nexus between Inflation and Economic Growth of
Japan. Iranian Economic Review, 19(3), 265-278.
Su, B., Ang, B. W., & Li, Y. (2017). Input-output and structural decomposition analysis of
Singapore's carbon emissions. Energy Policy, 105, 484-492.
Trading economics. (2018). GDP growth. Retrieved from:
https://tradingeconomics.com/singapore/gdp-growth
Trading economics. (2018). GDP per capita. Retrieved from:
https://tradingeconomics.com/singapore/gdp-per-capita
Trading economics. (2018). GDP. Retrieved from:
https://tradingeconomics.com/singapore/gdp
Trading economics. (2018). Inflation. Retrieved from:
https://tradingeconomics.com/singapore/inflation-cpi
Trading economics. (2018). unemployment rate. Retrieved from:
https://tradingeconomics.com/singapore/unemployment-rate

ECONOMICS 13
Yeung, H. W. C. (2017). The political economy of transnational corporations: a study of
the regionalization of Singaporean firms. In Singapore (pp. 57-84). UK: Routledge.
Yien, L. C., Abdullah, H., & Azam, M. (2017). Granger Causality Analysis between
Inflation, Debt and Exchange Rate: Evidence from Malaysia. International Journal of
Academic Research in Accounting, Finance and Management Sciences, 7(1), 189-196.
Zhang, W. B. (2018). Economic Growth Theory: Capital, Knowledge, and Economic
Structures. UK: Routledge.