Dunman High School

Economics Unit
Assessment Objectives

How the Macroeconomy Works Test 2

Information for H2 Candidates
Date:

2016 Term 1 Week 6 (8-12 Feb)

Format:

Question interpretation test consisting of 2 same-same-but-different essay

questions

Duration: 1 hour 30 minutes (to be arranged with tutor)

Assessment Objectives:
You will be assessed based on:
1.

Your understanding of the main concepts, principles and theories employed

within the topic of
(i)

2.

Macroeconomic Aims, Issues and Policies

Your familiarity with the concepts of:

Macroeconomic Aims and Issues
Inflation
Macroeconomic Policies
Fiscal Policy
Monetary Policy
Supply-side Policies

You should be able to:

explain government macroeconomic objectives in relation to low and steady
inflation
analyse the causes of economic problems in the above area, including the
significance of cyclical fluctuations, fiscal deficit or trade deficit in the level of
economic activity, and the economic consequences of failure to achieve the
objective of low and steady inflation

use AD/AS or AE-Income analysis to illustrate macroeconomic problems in an

economy
explain how the AD/AS approach may be used to analyse the way fiscal,
monetary and supply side policies, can affect the economic growth, levels of
employment, rate of inflation and the balance of payments position
define monetary policy in a broader context whereby interest rates and exchange
rates are alternative instruments
understand monetary policy framework in a small open economy such as
Singapore (i.e. openness to trade and capital flows)
explain objectives of monetary policy (inflation versus growth)
explain Singapores choice of using exchange rates rather than interest rates as
an instrument for its monetary policy
explain the causes and effects of changes in exchange rates and interest rates
on the economy
[An understanding of the exchange rate as a key indicator for a small open
economy like Singapore is required. Introduce the concept of exchange rate as a
price of foreign currency linked to balance of payments.]
discuss the possible conflicts in government objectives and the links between
macroeconomic problems and their inter-relatedness
evaluate the effectiveness of governments macroeconomic policies using the
AD/AS approach, especially with reference to the Singapore economy

3.

Your skill-sets, in particular, those that enable you to:

understand the directive words and key words to write an answer that
addresses all aspects of the question requirement
select and apply economic concepts and principles to explain and analyse
contemporary events at the micro and macro levels.
understand and interpret economic information presented in textual,
numerical and graphical forms
make interpretations and valid inferences from information presented and
evaluate the reliability of information given
select points that are significant to and display the breadth of scope as
required by the question
recognise unstated assumptions.
evaluate alternative theoretical explanations and perspectives of
economic problems and issues. In particular, to arrive at reasoned
conclusions,
a.
demonstrating sensitivity to the
(i) context
inherent characteristics of the domestic economy e.g. size
and openness of economy, economic structure,
macroeconomic environment e.g. recession, inflation,
globalisation, extent of government macroeconomic
intervention etc and the need to prioritise goals if they are
in conflict with each other
(ii) root cause of the problem and/or
(iii) time horizon.
b.
using

your own knowledge and understanding of real world issues,

information given in the preamble where relevant in support of

your arguments
organise and communicate economic ideas and arguments in a clear,
logical and appropriate form, in particular, to:

effectively illustrate economic concepts using titled, well-labelled and

suitably sized graphs (1/3 of page) that are effectively referenced in
the accompanying textual explanation.

use the Point, Explanation, Exemplification and Link method (PEEL)

to develop their arguments, specifically, to:
o
construct concise and relevant topic sentences.
o
construct balanced expositions.
o
explain the economic intuition underpinning their analyses.
o
exemplify points using contextual, authentic or hypothetical
examples.
o
link points/ arguments back to the question.