Singapore Economics Tuition - Sample H1 and H2 Macroeconomics Essay

The aim of this question is to on how to write a good Economics 'A' Level essays, with macroeconomic problems and objective in Singapore as the context.

No matter for H1 or H2, You can use this sample Economics essay to identify common mistakes usually made in an essay.

As you can recall, the 5 types of Economics GCE 'A' Level skills are knowledge, comprehension, application, analysis and evaluation.

This example will show you the lower order thinking skills (knowledge & comprehension) should have a smaller weighting while the higher order thinking skills (application, analysis and evaluation) must be greatly emphasised.

H1 / H2 Model Economics Essay (SAMPLE MACROECONOMICS QUESTION):

In my conduct of home tuition as well as group tuition for Economics (I have classes for H1 Econs, H2 Econs and IB Diploma Econs), I always aim to use the latest questions for discussion purposes, to illustrate and impart the higher order thinking skills, namely application, analysis and evaluation.

To date, the above question seems to be the most "terrifying" question almost everyone of my junior college (JC) students has found it to be the most unmanageable question.

So upon popular request, I've decided to make available here the approach to this question.

Bear in mind that I'll focus on the required examination skills rather than content answers.

Thinking Process - Analysis and Application

As always, the easiest way is to use the 5-step approach that I advocate, in order to dissect the question and to fully understand the question's requirements.

This IS the BIGGEST obstacle countless students have when sitting for Advanced Level ('A' Level) Economics, even for other subjects such as General Paper, Humanities or Social Sciences such as History, Geography and Literature, not forgetting Project Work.

At first glance, it is not difficult to understand and explain these 3 concepts of MULTIPLIER, the PRICE ELASTICITIES OF DEMAND for imports and exports (The Marshall-Lerner Condition), and CROWDING-OUT.

It is also relatively easy to explain how each of the 3 concepts influence the macro policy decisions.

What is challenging is how to structure your answers so as to make the essay answer flow well and how to get it organised. You might not realise it, but it is largely your use of analysis skills that will determine your structure. This is even more crucial in a 25-mark, no-part essay question.

After the required analysis, we have to perform evaluation - to discuss the RELATIVE significance of each of the 3 concepts.

Here's how my 5-step system will work:

Instantly, we will be to recognise these 3 concepts are ways to evaluate, i.e. to comment on the corresponding policies. In other ways, the question has FIXED or chosen the evaluation.

All you need to do is to "work backwards" and figure out the correct macroeconomic policy decisions they're hinting here.

Right now, I'm going to provide you with the biggest tip you can have for your answers: remember the following:

IN ORDER TO DECIDE ON THE MOST APPROPRIATE CHOICE OF POLICY, ONE HAS TO KNOW THE SOURCE OF THE PROBLEM IN QUESTION.

Hence, for this question, the multiplier has to relate to either FISCAL or MONETARY policy.

And what can these 2 policies solve? It can solve any or all of the problems of inflation, unemployment, low or negative economic growth and balance of payments (BOP) deficit / surplus.

As for the Marshall-Lerner Condition, it must relate to exchange rate policy only. Recalling your content knowledge, it can tackle either BOP problems or combat import-push (imported)  inflation.

Crowding out effect must only relate to an expansionary fiscal policy, and it's aim is to increase aggregate demand (AD), likely to reduce unemployment and / or raise economic growth.

Organisation Process - Relate Policies to Problems

Without overlapping answers and to also provide a wide variety of answers and balance, the 5 step system yields the following:

Multiplier hints at: contractionary monetary policy, and targets to reduce inflation.

Sum of PEDx + PEDm hints at using exchange rate policy to reduce BOP deficit.

Crowing-Out effects hints at expansionary fiscal policy to raise the level of AD, in order to reduce unemployment and boost economics growth.

(Other combinations are allowed. However this combination is the sure one to reach your desired Level 3 answer.)

Now we're on the right track as we've aligned the appropriate policy to tackle the underlying problem.

Thus, so far the required skills of Analysis and Application are complete.

The core key economic concepts of the macro goals and the selected policies provide the main content answers of Knowledge and Comprehension.

What's left is Evaluation, and this is the easiest because it is GIVEN in the question.

So our remaining task is to address the RELATIVE SIGNIFICANCE.

Judgement - How and What to Evaluate

So which evaluative judgement is correct?

i) compare the 3 policies to solve one common problem.

OR

ii) compare the 3 concepts in the influence of policy for a small and open economy like Singapore, as compared to another like USA.

OR
iii) compare how critical each concept in the working of the policy decision in question?

In my opinion, all 3 are possible. However, the 3rd option is the true and complete one, and underlines the real purpose of examining each policy.

If I were to rephrase the question, it means:

How critical is the multiplier to the monetary policy?
How critical is the MLC to the exchange rate policy?
How critical is the crowding out effect to the expansionary fiscal policy?

IF you have followed me so far, you will realise that multiplier is VERY critical to the effectiveness of demand management policy such as monetary policy (MP). In S'pore, MP is redundant.

MLC is SOMEWHAT critical to the effectiveness of demand management policy such as monetary policy (MP). For eg, in S'pore, we do not engage in devaluation to sell more exports (this is equal to price competition in micro economics). We actually engage in non-price competition, by focusing on quality, R&D, etc

Crowing out is NOT critical at all. It only occurs if government borrows from the domestic economy. By simply borrowing from elsewhere such as the World Bank, Asian Development Bank, other economies' central banks, foreign commercial banks and financial intermediaries, crowing out effect can be easily avoided.

Before I end, I wish to bring you to your attention that i have emphasised greatly on the econs exam skills.

Given the nature of the case study paper (Paper 1 for H2), and the increasing difficulty in essays (Paper 2 for H2), possessing even 100% of the content won't get you even near a grade B. having the vital exam skills will see you breeze though the subject with your desired outcome- distinction.

Hope this is all clear.

Happy revision and good luck!

Warmly

Adam Smith Economics Tuition Agency

As we help our many JC2 and IB Economics Students for their coming examinations, we are also preparing to conduct JC1 H1 and H2 September Holidays econs revision classes.

Contact us through email or just simply reach us on our mobile at 9695-9650.

Try us for a RISK-FREE first lesson, to determine if we can add value to your revision for prelims , GCE 'A' Level and promos exams!