2021 H2 Economics Paper 2 Essay 6: 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 one demand-side cause and one supply-side cause of real GDP growth, then asks whether a reduction in the rate of real GDP growth makes it harder for Singapore to achieve both inclusive growth and sustainable growth.
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Explain one potential demand-side cause and one potential supply-side cause of real GDP growth.
Real GDP measures the total value of all final goods and services produced within a country's borders over a period, adjusted for inflation. Real GDP growth is the change in this value over time, showing the economy's expansion or contraction. It can be driven by both demand side and supply side factors.
Demand-side cause. A demand side driver is a rise in aggregate demand, the sum of consumption, investment, government spending and net exports. For example, an increase in government spending on infrastructure such as roads, railways, schools or hospitals raises aggregate demand. This shifts the aggregate demand curve rightward from AD0 to AD1, raising real national income from Y0 to Y1 and so raising real GDP. This actual growth occurs when the economy is operating below full employment, where there is spare capacity to bring into use.
Supply-side cause. A supply side driver is an expansion in the long run aggregate supply. Factors such as demographic changes that raise the birth rate, or an increase in the number of foreign workers, enlarge the labour force and raise the economy's productive capacity. This shifts the long run aggregate supply curve rightward from AS0 to AS1, raising potential output and contributing to real GDP growth. This effect operates when the economy is near or at full employment, where further growth requires more capacity rather than the use of idle resources.
Real GDP growth can therefore be driven by demand side factors such as government spending and supply side factors such as a larger labour force.
Define real GDP growth, then give one developed demand side cause via AD and one developed supply side cause via LRAS, each with a diagram in words and the relevant capacity condition.
Discuss whether a reduction in the rate of real GDP growth makes it harder for Singapore to achieve both inclusive growth and sustainable growth.
- Define inclusive growth and sustainable growth as the two goals to be assessed.
- Develop the case that slower growth makes both harder, through the fiscal capacity channel and the cost of sustainability policies.
- Develop the counter case that slower growth can shift the focus from quantity to quality of growth.
- Bring in the longer run effects of green innovation and human capital investment.
- Weigh the short run constraints against the longer run opportunities.
- Reach an evaluative judgment on whether slower growth makes both objectives harder for Singapore.
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.
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Where can I get the full worked answers to the 2021 H2 Economics paper 2 essay 6?
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 2021 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.
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