Eco203E International Economics - Assessment Answer

Section A

Question 1

If the USA wants to reduce its imports (to promote domestic production) from China due to its trade deficit with China, compare which policy works more effectively, an import quota or an equivalent tariff? Reflect harder to compare the market adjustment by quota or tariff when domestic supply decreases due to a higher wage in a new labour contract. Use a graph to support your analysis.

Question 2

Explain the causes and impact of a financial crisis as seen in the Asian Financial Crisis in 1997 and Global Financial Crisis in 2008. As both Singapore and Hong Kong have good banking regulations and are surplus economies in the balance of payments, how do they suffer from contagion effects of the Asian Financial Crisis and what can they do to minimise such effects?

Question 3

Discuss and compare fixed and flexible exchange rate systems with the necessary diagrams. How has the MAS worked with its managed float for Singapore?

Question 4

In the table given below, Singapore’s balance of payments (BoP) comprises:

(a) Current account of goods, services & factor income (primary & secondary income balance)

(b) Capital & Financial account as DFI & Portfolio Investment

(c) Errors & Omissions

(d) A+B+C = BoP reflected in E

(e) Reserve Assets

(f) Official reserves (stock as accumulated over the years)

Explain the balance of payments position of Singapore and why traditionally, its trade in services rather than trade in goods dominated its Current Account. Why is this not a problem in policy?

Section B

Prepare a video recording of the presentation on Question 4 of at least 3 minutes but not exceeding 6 minutes. There are two methods for ECA video assignment submission; either Record Media or Upload Media. For Upload Media, please note that your file size should be

Section C

Prepare a set of PowerPoint presentation upon which the video presentation is based. Please note that the PowerPoint must be converted to PDF before submission to Canvas.