Section A

One or two of your chosen questions must be from this section

1. Analysts have predicted that executive condo (EC) buying interest will remain buoyant amid
tight supply of such units, rising incomes and improving market sentiment. ECs tend to be
priced 20 to 30 percent lower than a comparable private condo and hence, would be the more
economical option for the middle-income young families. New EC supply is set to be limited
with only one site offered under the government land sales programme in Sumang Walk this
year.
Adapted from: The Straits Times
Discuss the impacts of the above changes on the EC and other related markets. [25]

2. Not all mergers give rise to competition issues. Many mergers are either pro-competitive or
are competitively neutral. In order to determine whether a merger is anti-competitive, CCS will
assess whether the merger leads to a substantial lessening of competition. If so, such a
merger will not be approved.
Adapted from: Competitions Commission of Singapore
(a) Explain why a merger may not be approved. [10]
(b)Evaluate the measures to resolve lessen market dominance in oligopolistic and
monopolistic markets. [15]

3. In most markets, the main interested parties are the buyers and sellers. However, in markets
like healthcare, decisions often affect unwitting bystanders, a phenomenon that economists
call an externality.
(a) Explain the above statement and elaborate on the reasons government intervenes in the
market for healthcare. [10]
(b) Discuss whether there is a need to make adjustments to the current healthcare policies in
Singapore. [15]
 Section B
One or two of your chosen questions must be from this section
4. Singapores labour market remains close to unemployment, with unemployment rate
remaining low at 2.9% in 2014. The tight labour market has also led to further increases in
labour force participation rates, with more women working and more older workers staying on
in employment.
(a) Explain the types of unemployment that exists in Singapore. [10]
(b) Discuss the view Singapore should increase its reliance on foreign labour to meet its
macroeconomic objectives. [15]

5. The external outlook of Singapore remains clouded with significant uncertainties as trading
partners such as Eurozone are battling fears of deflation and China faces sluggish growth.
The appreciation of the US dollar and anticipated normalisation of US interest rates elevated
fears of capital outflows and added pressures on the Singapore currency.
Adapted from: Singstat.gov.sg, 2015
(a) Explain how the above changes can affect the economic performance of Singapore. [10]
(b) Discuss the relative effectiveness of supply-side policies and exchange-rate policies in
dealing with the above scenario. [15]

6. Economists have long argued that tariffs are bad for a countrys development in the long
run. They raise prices for consumers, steer capital away from the most productive investments
and breed inefficiency by limiting competition from abroad.
Source: The Economist, April 14th, 2016
(a) Explain the negative impacts of protectionism. [10]
(b) In light of the above disadvantages, discuss the view that free trade is always better than
protectionism in achieving economic growth. [15]