ECON1010 Policy Brief Template for Macroeconomics 1 Course at RMIT University

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ECON1010, 2019S2, Policy Brief ‘Student template’
ECON 1010 – Macroeconomics 1
Policy Brief ‘Student template’
(strictly follow this template and use this template only for submission)
You must compose the policy brief according to the template detailed in this section.
Instructions for each required element of the brief are included within this template These
instructions are reflected in the requirements of the rubric detailed. Ensure that the policy
brief includes each of the elements detailed in the template and that you do not reorder,
rename, or omit any of these elements.
By signing below, you agree to the RMIT university’s student declaration
In principle, you need to form a group with a size of TWO(2) students. All group members
must be enrolled in the same tutorials (a strict requirement).
In the event that you would like to form a group with a student from a different tutorial or
you like to submit as the individual work, you will need to seek approval from the course
coordinator explaining the valid reasons (please email to [e-mail])
Student
name
Student
number
Tutorial
Date/Time
Signature (take a picture of a signature
and paste here)
Only one submission per group
Please indicate using * in student name who will be submitting the assignment in Turnitin
(in Canvas) on the group’s behalf.
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ECON1010, 2019S2, Policy Brief ‘Student template’
Template
Part A: Diagnostics Analysis
Name of country: Singapore
Indicator 1 from Group A (or B): A. Output measured as ‘GDP’ and Inflation measured
by price index (CPI or GDP deflator)
Presentation (2 marks)
Figure 1: Trend in GDP of Singapore in past 5 years
Source: Data.worldbank.org. (2019)
Figure 2: Trend in the inflation rate of Singapore in the last 5 years
Source: Data.worldbank.org. (2019)
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ECON1010, 2019S2, Policy Brief ‘Student template’
Comments and observations
Singapore being a free market economy has quality growth in the past five years.
Data from government sources reveal that the economy has expanded by 3.1 percent in the
last year. Inflation and unemployment are two most important factors to understand the
economic aspect of Singapore. Inflation and GDP have an inverse relation with each other
because with the rise in GDP, annual spending goes up and so does the demand for goods
and the aggregate price level. The economy is projected to grow in terms of GDP in the
upcoming years. Singapore has great growth opportunities, however a free market
capitalization can harm the economy with varied threats from its international competitors.
Singapore is reputed to be one of the most leading and advanced economies.
According to the reports of World Bank, businesses are reported to show a sharp increase in
the generation of revenue. Although, Singapore lacks natural resources, it successfully
fought against the great financial crisis of 2008. The economy of Singapore is known to
have highest revenue and positive surplus without any foreign debt (Yeung 2017). This
economic surplus is earned from the exports in manufacturing of electronics, tourism and
financial services, all of which makes Singapore as the busiest cargo sea port globally. The
manufacturing sector is the biggest sector which contributes over 25% of the annual GDP.
Singapore has over 200 banks which provides financial services to people. These services
leads to technological and skill transfer between local and global markets.
The state of well-being is properly estimated by the level of GDP and the
percentage of unemployed people in the work force. GDP determines the current value of
all the goods and services produced inside the economy, within a specific period of tie
(Sundbo and SËrensen 2013). The amount of aggregate income earned in the economy is
measured by the GDP level because it is related to the money derived as a result of the
work done daily. Per capita income of the economy is estimated from GDP by diving the
total value earned from the population. It indicates the standard of living of an economy as
income levels establishes the macroeconomic environment, leisure hours, health conditions,
education and aggregate spending of the economy. Real GDP expresses the value of goods
in terms of base year and current year prices is known as the inflation. Inflation is the rate
at which the overall prices are rising.
The growth in labor markets coupled with rising inflation rate leads to a short-term
inflation (Clammer 2019). An accelerating rate of inflation have an exponential impact on
the equilibrium price which diminishes the buying power of consumers leading to a fall in
demand. In the short-run, the impacts are positive, while in the long-run the economic
performance of the economy slows down causing joblessness among individuals. In order
to understand the economic condition of Singapore, the trend of GDP with respect to the
change in inflation rate has been considered. The data to be analyzed is taken for five
consecutive years, starting with 2014. The factors and causes that led to such trends are
focused and how these changes effect the economy of Singapore.
The above graph represented by Figure1, shows the trend in the rate of GDP in the
past 5 years, as represented by a line. In 2014, there has been an intense fall in in GDP of
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