2017 H2 Economics Paper 2 Essay 5: Suggested Answers
How to use these essay answers. The responses below, including the part (a) answer, are structured guides to the requirements of the question, the content, analysis and evaluation a strong answer must cover, rather than full essay prose with a written introduction and conclusion. Use them to see what to include and how to build the argument, then write it up in your own continuous prose, adding your own introduction and conclusion.
This essay explains the link between the standard of living, the cost of living and a country's macroeconomic performance, then asks which economic policies might have resulted in Singapore arriving at its position of high living standards, high costs and strong performance.
An AI guided TYS coach, on every question.
Every ETG student gets access to our AI guided Ten Year Series coach on the ETG learning management system. It walks you through exactly how to approach every single essay question and every single case study question from the last ten years, step by step. TYS Crashcourse students get the same access.
Explain the link between the standard of living, the cost of living and the macroeconomic performance of a country.
The standard of living, the cost of living and macroeconomic performance are distinct but interrelated, and together they describe a country's economic well being.
Macroeconomic performance and the cost of living. Macroeconomic performance is measured by indicators such as economic growth, inflation, the balance of payments and employment. Inflation is the most direct link to the cost of living: high inflation raises the general price level and erodes purchasing power, so when prices rise faster than incomes, households face higher living costs for essentials such as food, housing and healthcare. A government that keeps inflation low and stable helps to contain the cost of living and protect purchasing power.
Cost of living and standard of living. The cost of living directly shapes the standard of living, which has both material and non material dimensions. When the cost of essentials rises without a matching rise in income, households cut consumption or lower their quality of life, reducing the material standard of living, while the stress of struggling to meet basic needs harms non material well being. This is why, in a high cost economy like Singapore, it is important that wages rise broadly in step with costs.
Macroeconomic performance and the standard of living. Performance also affects living standards directly through growth and employment. Sustained, inclusive growth raises average incomes and allows a better quality of life, while low unemployment gives more people a regular income. Strong performance also raises government revenue, which can fund healthcare, education and infrastructure that lift the quality of life and, through human capital, raise productivity and future incomes.
Link macro performance to the cost of living via inflation, the cost of living to the standard of living via real consumption, and macro performance to the standard of living via growth, employment and public spending.
Tests: Standard of living, Inflation
Discuss the economic policies which might have resulted in Singapore arriving at this position.
- Frame Singapore's position of high living standards, strong performance and high costs as the outcome of deliberate policy.
- Develop a prudent fiscal policy strand and how it funds welfare and resilience, then note its trade offs.
- Develop a supply side strand that attracts investment and raises capacity, then note its limits.
- Explain how these same policies feed into the high cost of living.
- Weigh the gains in living standards against the cost pressures they generate.
- Reach an evaluative judgment on the balance the government must strike.
This part is gated. The full model answer with the worked analysis and the evaluation, with the diagrams and the full evaluation, is in the ETG TYS Answers book from SAP and is worked live in the TYS Crashcourse. ETG students also get the AI TYS coach that guides them through this exact question. Message the team to find out more.
Tests: Fiscal policy, Supply-side policies
Questions students ask
Where can I get the full worked answers to the 2017 H2 Economics paper 2 essay 5?
The full model answers, with the diagrams and the higher mark evaluation, are in the ETG TYS Answers book published by SAP and sold at Popular, and are worked live in the TYS Crashcourse. Every ETG student also gets the AI TYS coach on our learning management system, which guides you through how to tackle every essay and every case study question from the last ten years.
Are these the official 2017 A Level Economics answers?
No. SEAB sets and marks the A Level paper. These are suggested answers by Mr Eugene Toh, author of the H1 and H2 A Level Economics TYS answer keys, published by SAP and sold at Popular.
How should I use these suggested essay answers?
Treat them as a guide to the requirements of the question, the content, analysis and evaluation a strong answer must cover, not as full essay prose. Write the essay up in your own continuous prose, with your own introduction and conclusion.
Get the printable Summary and Diagrams pack.
The notes are free to read because the concepts should be. Join the mailing list for the 112 page Summary and Diagrams pack, drawn the way ETG teaches them, plus new chapters and worked answers as we publish. You can also follow along on Telegram.
Form not loading? Open the sign-up form.