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Economics Tuition Singapore A Level H2 H1 Economics Tuition – National Income of Singapore Essay Model Answer
Economics Tuition Singapore A Level H2 H1 Economics Tuition – National Income of Singapore Essay Model Answer
The government is spending about $1bn on the Singapore Sports Hub, which is currently being built on the original site of the National Stadium. Construction on the Singapore Sports Hub began in 2011 and this sports complex is expected to open in April 2014
Explain how construction of the Sports Hub will lead to an increase in the national income of Singapore.
SUGGESTED ANSWER
The key to interpreting the question is to identify the type of expenditure related to construction of Sports Hub (preamble states that “the government is spending…”, so clearly this should be government expenditure) and then explain how G (an injection) can lead to an increase in NY.
Define government expenditure and national income
Explain the multiplier process, the process whereby an increase in government expenditure leads to a larger increase in national income.
- The k value will determine the extent of the change in national income caused by the change in government expenditure.
- A detailed explanation of the multiplier process is expected – use appropriate examples and illustrations to show how the injection of S$1bn (increase in G) has an expansionary multiplier effect and will lead to a larger increase in NY.
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