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Technical Recession Looms for Singapore

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Added on  2019-09-16

Technical Recession Looms for Singapore

   Added on 2019-09-16

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Technical Recession Looms for Singapore_1
MACRO ECONOMICS 2Table of ContentsSummary of the article 1...........................................................................................................................3Economics Concepts related to article.....................................................................................................3Economics Analysis...................................................................................................................................5Conclusion................................................................................................................................................11Summary of Article.................................................................................................................................13Economics Concepts related to article...................................................................................................14Economics Analysis.................................................................................................................................16Conclusion................................................................................................................................................21Topic of article 1: Singapore consumer prices rise for 2nd straight month in January on recovering oil prices...................................................................................................................................................23Topic of article 2: Technical recession looms' for Singapore...............................................................23
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MACRO ECONOMICS 3Article 1)Singapore consumer prices rise for 2nd straight month in January on recovering oil prices.Summary of the article 1Singapore oil prices are recovering from a recession period and gradually showing positive inflation in the month of January 2017. According to figures released by the Singapore department of statistics on February 23, 2017. The base for measuring the inflation is CPI: consumer price index which rose 0.6 percent from last month compared with the same month a year ago. This scenario is seen after 2 years of recession from November 2014 to October 2016, and a flat CPI in November. Finally, in December this data turned positive and increased 0.2 percent gradually. Recession in the oil market and car market ultimately affect the whole economy and main drivers behind that long session of negative inflation. In the oil market, a sudden increase in services and cost of oil-related items leads to increase the price of oil in January. Overall inflation is predictable to pick up to 0.5 to 1.5 % this year, from negative 0.5 % in 2016. This mainly reflects the positive contribution of energy-related components as well as some administrative price increases.Economics Concepts related to articleReal gross domestic products: during a given period of time, the quality of all the products produce inside the border of a nation is known as RGDP.Inflation: a rate at which prices of goods and services increase consistently, as inflation prevailing in an economy, every currency an individual holds can buy small percent of goods andservices he can buy before.
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MACRO ECONOMICS 4Cost-push inflation: when the prices of inputs like labor, raw material, etc. lead to increase the cost of production; as a result price of that product increases as well, known as cost-push inflation.Recession: consistent fall in prices and output in two successive quarters which leads to falling in RGDP and a period of temporary decline of trade and production activities.Aggregate demand: at a given period of time, the final demand of goods and services from all the individuals in an economy is referred as aggregate demand.Aggregate supply: during a specific period of time, the total quantity of goods and services an economy is planning to supply is refers as aggregate supply.Unemployment – workforce those are willing to work and looking for work but not able to find any work are refers as unemployed, and percentage of them with reference to total population is unemployment.Expansionary fiscal policy: It is a policy by the government which is adopted so that the money supply in the economy gets increased and the rate of inflation is raised. This is done by decreasing the rate of taxes and increasing the expenditure of the government (Hansen, 2013). Thus, this helps in fighting the recessionary pressures of the economy. When the taxes are reduced, the disposable income of the people gets increased. Thus they spend more and consumemore. When the goods and services are invested into, and the people spend more, the GDP of thecountry gets improved.Full employment: It is a condition where all the people who can work and they are willing to work are employed in the economy at a particular time (Beveridge, 2014).
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MACRO ECONOMICS 5Economics AnalysisDetermination of price in the economyAt a given period of time, the final demand of goods and services from all the individuals in an economy is referred as aggregate demand. Aggregate demand is a combination of consumption, investment , government and net export.AD = C+ I + G + (X-M)Where,AD is aggregate demandC is consumptionI is investmentG is government expenditureX is exportM is importDuring a specific period of time, the total amount of products and services an economy is planning to supply is refers as aggregate supply. Aggregate supply is different in the long and short run, in short run aggregate supply is upward sloping because an economy is below full employment and able to achieve full employment gradually. On the other hand, in long run aggregate supply is vertical, and economy ultimately reaches full employment level. In an
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MACRO ECONOMICS 6economy, the price of all the goods and services are determined by the intersection of aggregate demand and aggregate supply. As shown in below diagram: Determination of price by intersection of AD & ASIn the above diagram, the prices of goods and services are determined at point ‘e’ when the aggregate demand (AD) curve intersects aggregate demand (AS) curve. This is the level at whichthe optimal level of price and output of the economy can be determined.Due to fall in oil prices in, the whole economy gets affected, Recession in the oil market, and car market ultimately affects the whole economy and main drivers behind that long session of negative inflation.
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