ECONOMICS

HIGHER 1
(Syllabus 8819)
CONTENTS
Page

AIMS

ASSESSMENT OBJECTIVES

SYLLABUS CONTENT

ASSESSMENT FORMAT

NOTES OF GUIDANCE

RECOMMENDED READING

20

8819 H1 ECONOMICS (2014)

ECONOMICS
HIGHER 1
(Syllabus 8819)
FIRST YEAR OF EXAMINATION 2009

AIMS
The syllabus is intended to provide the basis for a broad understanding of economics. Specifically, the
syllabus aims to develop in candidates:
1.

an understanding of fundamental economic principles, theories and concepts, and of the

methods of analysis used by an economist;

2.

the ability to use the tools of economic reasoning to explain, analyse and resolve economic
issues, and evaluate policy decisions;

3.

the habit of reading critically, from a variety of sources, to gain information about the changing
economic activities and policies at the national and international levels;

4.

the ability to use evidence in making rational arguments in economic context and understand
the roles of various economic agents.

ASSESSMENT OBJECTIVES
Candidates are expected to demonstrate:
Understanding of
1.
the main concepts, principles and theories employed within the field of economics
2.

methods of analysis in economics

Ability to
3.
understand and interpret economic information presented in textual, numerical or graphical form
4.

select and apply economic concepts and principles to explain and analyse contemporary events
at the micro and macro levels

5.

recognise unstated assumptions

6.

make interpretations and valid inferences from information presented and evaluate the reliability
of information given

7.

evaluate alternative theoretical explanations and perspectives of economic problems, issues

and policy decisions

8.

organise and communicate economic ideas and arguments in a clear, logical and appropriate
form

SYLLABUS CONTENT
The theme for the H1 syllabus is Markets and Governments. The emphasis of the syllabus is on the application of economic concepts and principles to
explain, analyse and evaluate economic situations and policy decisions in a real-world context.
1. Microeconomics
This section provides an introduction to the basic terminology and concepts of economics. It enables candidates to consider what markets and governments
can and cannot do. It provides candidates with the opportunity to explain economic phenomena through the use of diagrams, data analysis and the evaluation
of economic materials. It is intended to make candidates aware of the role of economics in real-world situations. It is expected that these concepts and
principles are applied throughout the syllabus.
Candidates should be able to:

1.1 How the Microeconomy Works

Central Economic Problem

- The rationale for resource allocation: scarcity
and the inevitability of choice

Price as a rationing and allocative mechanism

Demand, Supply and the Market

- The individual and market demand curves as
representations of intentions to consume

Explain the central economic problem

Illustrate the concepts of scarcity, choice and opportunity cost, and the nature of trade-offs through
the use of examples and production possibility curves

Explain how the price mechanism allocates scarce resources among competing needs in a free
market

[A broad understanding of the concept of economic efficiency is required. Diagrammatic and/or

mathematical explanation is not required.]

Explain that demand reflects consumers satisfaction and recognise the inverse relationship between
price and quantity demanded

- The firm and market supply curves as

representations of intentions to supply

Explain that supply reflects opportunity costs and recognise the direct relationship between price and
quantity supplied

- Changes in demand and supply

Discuss the factors affecting demand and supply and the implications of the ceteris paribus condition

- Shifts vs movements in demand and supply

Differentiate between shifts and movements along the demand and supply curves

8819 H1 ECONOMICS (2014)

Syllabus Content

- Equilibrium price and quantity

- Price elasticities of demand and supply

Explain the determination of market equilibrium price and quantity through the interaction of demand
and supply

Analyse the effects of changes in demand and supply on equilibrium price and output

Explain the concepts of price elasticities of demand and supply

Explain the factors affecting price elasticities of demand and supply

Discuss real-world applications of demand and supply analysis

[Applications of price controls are not required.]

Explain the meaning of market failure

Analyse why externalities arising from the divergence between private and social costs/benefits lead
to market failure (including discussions on environmental issues and congestion as examples of
negative externalities)

- Public, merit and demerit goods

Explain the characteristics of public goods and why public goods are not provided by the market
Explain the characteristics of merit and demerit goods and why they result in under- and overconsumption

Market Failure
- Positive and negative externalities

[Discussion of imperfect information and markets, and inequity is not required.]

Policies to correct market failure
- Direct provision
- Taxes and subsidies
- Tradeable permits
- Rules and regulations

Effectiveness of policies

Explain why governments intervene in the market with regard to the provision of public, merit and
demerit goods, positive and negative externalities
Analyse how governments intervene through direct provision of goods and services, imposition of
taxes, subsidies, tradeable permits, rules and regulations
Discuss the effectiveness of these policies in correcting market failure and their limitations

[Diagrammatic analyses of market failure and corrective measures using private and social marginal cost
and benefit curves are not required. Concepts of consumer and producer surpluses are not required.
Discounting, measurement and determination of present value in cost-benefit analysis (CBA) are not
required.]

8819 H1 ECONOMICS (2014)

1.2 Why Markets Fail

2. Macroeconomics
The emphasis of this section is on government objectives and policies relating to economic growth, employment, stability of prices and the balance of
payments. It emphasises the use of the AD-AS approach as a tool for the analysis of fiscal, monetary and supply-side policies, and their impact at the micro
and macro levels. Candidates should be able to acquire a good knowledge of recent economic trends and developments, with a focus on the Singapore
economy. Candidates should also be able to appreciate the possible underlying causes of these trends and developments and to evaluate the effectiveness of
government policies in the light of these events.
Syllabus Content

Candidates should be able to:

2.1 How the Macroeconomy Works

Explain the circular flow of income amongst households, firms, government and international
economy

Aggregate Demand (AD) and Aggregate Supply

(AS) Analysis
- Key determinants of AD and AS

Explain AD and AS, and their key determinants

Explain the determination of the general price level and national output through the interaction of AD
and AS

Analyse the effects of changes in AD and AS on general price level and national output

Explain the main macroeconomic aims, economic performance and living standards of a country

Explain the meaning of a sustained rate of economic growth, real and nominal GDP/GNP per capita,
low inflation rate, full employment and favourable balance of payments

- Determination of general price level and

national output
- Changes in AD and AS
2.2 Macroeconomic Aims, Problems/Issues,
Consequences and Policies
Macroeconomic Aims

Sustained rate of economic growth

Low inflation rate
Full employment
Favourable balance of payments

[Interpretation of the above economic information presented in textual, numerical or graphical form is
required. Derivation of index numbers is not required. Computation of national income and balance of
payments accounts is not required.]

8819 H1 ECONOMICS (2014)

The Circular Flow of Income

Macroeconomic Problems and their causes

Undesirable rates of economic growth

High inflation rate
High unemployment rate
Persistent or large balance of payments deficit

Explain the meaning of undesirable rates of economic growth, high inflation rate, high unemployment
rate and persistent or large balance of payments deficit

Analyse the causes and consequences of the macroeconomic problems

Explain monetary policy in a broader international context where interest rates and exchange rates
are alternative instruments

Explain the domestic and external effects of changes in exchange rates and interest rates

Discuss Singapores choice of using exchange rates (rather than interest rates) in an exchange ratebased monetary policy

Evaluate the effectiveness of monetary policy in achieving macroeconomic aims

Macroeconomic Policies

Monetary policy and its effectiveness

Fiscal policy and its effectiveness

Explain discretionary fiscal policy

Analyse the effects of fiscal policy on the economy. Understand the concept of the simple multiplier
process

[A detailed explanation of the multiplier process using numerical illustration and analysis is not required.]

Supply-side policies and their effectiveness

Evaluate the effectiveness of fiscal policy in achieving macroeconomic aims

Explain supply-side policies

Analyse the effects of supply-side policies on the economy

Evaluate the effectiveness of supply-side policies in achieving macroeconomic aims

8819 H1 ECONOMICS (2014)

[Determination of interest rates is not required. A broad understanding of flexible exchange rates and
managed float will suffice.]

2.3 International Economy

Explain the basis for trade using the concept of opportunity cost

Free trade and its benefits

Explain the benefits of free trade and the reasons for protectionism

[Knowledge of the theory of absolute advantage is not required. A brief explanation of the principle of
comparative advantage using the concept of opportunity cost is sufficient. Detailed discussion and
analysis of the principle of comparative advantage using numerical illustration is not required.
Explanation and analysis of the various forms of protectionism are not required.]

Globalisation and its impact

Examine the economic impact of globalisation on the Singapore economy

8819 H1 ECONOMICS (2014)

ASSESSMENT FORMAT
The assessment format for the H1 syllabus comprises 1 paper with 2 sections:
H1 Economics (3 hours) (100%)
Section A
2 hrs 15 min
(70%)

Case Study Questions

Each set of questions will carry 30 marks.

Section B
7

45 min

Essay Questions
Candidates are required to answer 1 out of 2 essay questions. Each question will carry 25 marks.

(30%)

Note:
Section A and Section B, taken as a whole, should incorporate a good balance of questions on microeconomics and macroeconomics.

8819 H1 ECONOMICS (2014)

Candidates will be given 2 sets of questions based on 2 condensed write-up of about 2-3 pages each on a multi-faceted economic issue
or policy decision, including a set of data. Questions pertaining to each of the cases will comprise data response type questions based
on quantitative data and higher order type questions which will require candidates to apply economic principles in analysing,
synthesising, evaluating or solving the economic problem. Each set of case study questions will consist of 35% of the total marks, of
which 14% of this will be allocated to data response type questions and 21% will be allocated to higher order type questions. Candidates
may also be asked to assume a role in resolving the economic problem of the case.

NOTES OF GUIDANCE
These notes of guidance provide further explanation on the content specifications in the H1 Economics (Revised) syllabus and help teachers understand the
depth and scope of coverage required. These notes are written as a guide to teachers designing the instructional programme. They are by no means
exhaustive and should not be used as a scheme of work. Teachers are encouraged to use these notes to design programmes, taking into consideration both
their teaching methods and their students learning styles. The concepts and principles covered should be applied in the real world context, where possible,
with a focus on the Singapore economy. Real world examples should be used where appropriate as the emphasis of H1 Economics is on the application of
economics concepts and principles to provide students with the opportunity to use problem-solving skills in addressing current economic issues.
Syllabus Content

Learning Outcomes
Students should be able to:

Remarks

1. Microeconomics

Central Economic Problem

- The rationale for resource
allocation: scarcity and the
inevitability of choice

Explain the central economic

problem

Explain the meaning of unlimited wants and limited resources, the concept of
scarcity and the inevitability of choice

Illustrate the concepts of

scarcity, choice and opportunity
cost, and the nature of tradeoffs through the use of
examples and production
possibility curves

Explain the concept of opportunity cost through illustrative examples at the

individual, firm and national levels. Define broadly the production possibility
curve (PPC) and illustrate graphically the concept of opportunity cost.
Understand that points on the PPC are efficient and attainable output
combinations with given resources and level of technology, points within PPC
are inefficient and attainable, and points beyond the PPC are unattainable
combinations. Explain the factors causing shifts of the PPC increase in
quantity and quality of resources, improvement in technology resulting in
economic growth

[Explanation for the concave-shaped PPC (law of diminishing returns) is not

required. Detailed mathematical analysis of the PPC is not required.]

Price as a rationing and
allocative mechanism

Explain how the price

mechanism allocates scarce
resources among competing
needs in a free market

Explain the broad working of the price mechanism how pricing influences the
allocation of resources to produce desired goods and services which are
distributed to consumers who are able and willing to pay

8819 H1 ECONOMICS (2014)

1.1 How the Microeconomy Works

Syllabus Content

Remarks

[A broad understanding of the

concept of economic efficiency is
required. Diagrammatic and/or
mathematical explanation is not
required.]

[A broad understanding of the concept of economic efficiency as comprising

productive and allocative efficiency is sufficient. An understanding that productive
efficiency refers to the production of goods and services at the lowest possible cost
will suffice, detailed mathematical and graphical analysis is not required. An
understanding that allocative efficiency refers to the allocation of resources to
produce the combination of goods and services most wanted by society
(i.e. optimal product mix) will suffice. Detailed graphical and mathematical analysis
involving pricing and production costs is not required. Knowledge and derivation of
marginal cost pricing to illustrate allocative efficiency is not required. Knowledge of
the types of economic systems is not required.]

Explain that demand reflects

consumers satisfaction and
recognise the inverse
relationship between price and
quantity demanded

Understand the law of demand i.e. the inverse relationship between price and
quantity demanded. Changes (decreases/increases) in price of the good itself
lead to changes (increases/decreases) in the quantity demanded, as shown by
movements along the demand curve

[Derivation of the demand curve and the underlying explanation of consumer

equilibrium or utility theory are not required.]
- The firm and market supply
curves as representations
of intentions to supply

Explain that supply reflects

opportunity costs and recognise
the direct relationship between
price and quantity supplied

Understand the law of supply i.e. the direct relationship between price and
quantity supplied. Changes (decreases/increases) in price of the good itself
lead to changes (decreases/increases) in the quantity supplied, as shown by
movements along the supply curve

[Derivation of the supply curve and explanation of the theory of production costs
are not required.]

8819 H1 ECONOMICS (2014)

Demand, Supply and the

Market
- The individual and market
demand curves as
representations of
intentions to consume

Learning Outcomes
Students should be able to:

Syllabus Content

Learning Outcomes
Students should be able to:

Remarks

Discuss the factors affecting

demand and supply and the
implications of the ceteris
paribus condition

Discuss the factors affecting market demand and supply and their effects on
demand and supply, resulting in shifts of the demand and supply curves:
- Demand factors include prices of related goods, expected future prices,
incomes, tastes and preferences, population, government policies, climate
and weather, etc
- Supply factors include costs of factors of production, expected future
prices, technology, government indirect taxes and subsidies, climate and
weather, etc

- Shifts vs. movements in

demand and supply

Differentiate between shifts and

movements along the demand
and supply curves

Distinguish conceptually and graphically between changes in quantity

demanded/supplied (movements along curves) and changes in demand/supply
(shifts of curves)

- Equilibrium price and

quantity

Explain the determination of

market equilibrium price and
quantity through the interaction
of demand and supply

Explain the interaction of demand and supply curves graphically, disequilibrium

position with surplus/shortage and the market equilibrium position with
equilibrium price and quantity

[Knowledge of unstable equilibrium is not required.]

- Price elasticities of demand

and supply

Analyse the effects of changes

in demand and supply on
equilibrium price and output

Analyse how changes in market demand and/or supply affect market

equilibrium price and quantity illustrate cases where there is no change,
increase, decrease or indeterminate change in equilibrium price and quantity

Explain the concepts of price

elasticities of demand and
supply

Define price elasticity of demand (supply) as the degree of responsiveness of

quantity demanded (supplied) to changes in price
Use the formula for price elasticity of demand (supply)
Interpret the sign of price elasticity of demand (supply) and relate to the law of
demand (supply)
Interpret the magnitude of absolute value of price elasticity of demand (supply)
and explain the meaning of price-elastic, price-inelastic, unitary elastic,
perfectly elastic and perfectly inelastic demand (supply)

8819 H1 ECONOMICS (2014)

10

- Changes in demand and

supply

Syllabus Content

Learning Outcomes
Students should be able to:

Remarks
[Knowledge of point elasticity and varying price elasticity along a demand (supply)
curve is not required. The broad relationship between price elasticity of demand
and total expenditure direct relationship for price-inelastic demand and indirect
for price-elastic demand is required. Diagrammatic analysis showing the
relationship between demand, elasticity, marginal and total revenue curves is not
required.]

Explain the factors affecting

price elasticities of demand and
supply

Explain the main determinants of price elasticity of demand for example,

availability and number of close substitutes, degree of necessity, proportion of
consumers income spent on good, time period

Explain the main determinants of price elasticity of supply for example, level
of stocks or inventories, availability of spare capacity, ease of factor
substitution, nature of product, time period

11

[Discussion of elasticity is limited to price elasticity of demand and supply.

Concepts of and factors affecting income and cross elasticities of demand are not
required.]

Discuss real-world applications

of demand and supply analysis

[Applications of price controls are

not required.]

Identify and apply demand and supply factors in real-world context

Analyse the effects of changes of demand and supply on equilibrium price and
quantity

Explain why markets may not operate ideally and may fail in terms of nonprovision of goods and services by the market, or non-socially optimal
production and/or consumption

Identify possible sources and consequences of market failure:

- Externalities: positive and negative
- Public, merit and demerit goods

1.2 Why Markets Fail

Market Failure

Explain the meaning of market

failure

8819 H1 ECONOMICS (2014)

Syllabus Content
- Positive and negative
externalities

Learning Outcomes
Students should be able to:

Analyse why externalities

arising from the divergence
between private and social
costs/benefits lead to market
failure (including discussions on
environmental issues and
congestion as examples of
negative externalities)

Remarks

Explain positive externalities and illustrate through examples. Discuss the

divergence between private and social benefits leading to underconsumption/production in the market and inefficient allocation of resources

Explain negative externalities and illustrate through examples. Discuss the

divergence between private and social costs leading to overconsumption/production in the market and inefficient allocation of resources

[Environmental issues and traffic congestion are included as examples of negative

externalities in real-world context.]

12

Policies to correct market

failure
- Direct provision
- Taxes and subsidies
- Tradeable permits
- Rules and regulations

Explain the characteristics of

public goods and why public
goods are not provided by the
market
Explain the characteristics of
merit and demerit goods and
why they result in under- and
over-consumption

Explain the characteristics of public goods (non-excludability and non-rivalry in

consumption) and the non-provision by the market

[Diagrammatic analysis of the optimal provision of public goods is not required.]

Explain the characteristics of merit and demerit goods in terms of its social
desirability and the divergence between private and social benefits leading to
under- and over-consumption

[Discussion of imperfect information

and markets, inequity is not
required.]

[Discussion of market failure is limited to externalities, public, merit and demerit

goods only.]

Analyse how governments

intervene through direct
provision of goods and services,
the imposition of taxes and
subsidies, tradeable permits,
rules and regulations

Analyse how the various policy measures impact the achievement of the
socially optimal consumption/production level

8819 H1 ECONOMICS (2014)

- Public, merit and demerit

goods

Syllabus Content

Effectiveness of policies

Learning Outcomes
Students should be able to:

Discuss the effectiveness of

these policies in correcting
market failure and their
limitations

Remarks

Discuss how effective these policies are in correcting market failure and their
limitations for example, administrative, implementation and monitoring costs,
imperfect or inaccurate information, lack of public support

13

2. Macroeconomics
2.1 How the Macroeconomy Works

The Circular Flow of Income

Explain the circular flow of

income amongst households,
firms, government and
international economy

Explain the circular flow of income and expenditure amongst households,

firms, government and the foreign sector. Understand that income equals
expenditure from the flow

Aggregate Demand (AD) and

Aggregate Supply (AS)
Analysis
- Key determinants of AD
and AS

Explain AD and AS, and their

key determinants

Explain AD as the total quantity of goods and services demanded in an

economy at a given price level. Understand that the components of AD
comprise consumption expenditure, investment expenditure, government
expenditure and net export expenditure

Explain the key determinants of AD:

- Determinants of consumption expenditure for example, disposable
incomes, expected future price changes, availability of credit, interest
rates

8819 H1 ECONOMICS (2014)

[Diagrammatic analyses of market

failure and corrective measures
using private and social marginal
cost and benefit curves are not
required. Concepts of producer and
consumer surpluses are not
required. Discounting, measurement
and determination of present value
in cost-benefit analysis (CBA) are
not required.]

Syllabus Content

Learning Outcomes
Students should be able to:

Remarks
-

Determinants of investment expenditure for example, interest rates,

level of technology, business outlook or expectations
Determinants of government expenditure discussed under fiscal policy
Determinants of net exports for example, foreign income levels
(affecting exports), domestic income levels (affecting imports), exchange
rates, relative price levels

Explain AS as the total quantity of goods and services produced in an

economy at a given price level

Explain the key determinants of AS for example costs of production, level of

technology

[Detailed explanation and analysis of the determinants of AD and AS are not

required.]
14

Determination of general

Explain the determination of the

general price level and national
output

Explain the determination of the general price level and national output through
the interaction of AD and AS

Analyse the effects of changes

in AD and AS on general price
level and national output

Analyse how changes in AD and AS lead to changes in the general price level
and national output. Recognise that changes in government policies
(discussed at 2.2) can lead to changes in AD and AS

price level and national

output

Changes in AD and AS

8819 H1 ECONOMICS (2014)

Syllabus Content

Learning Outcomes
Students should be able to:

Remarks

2.2 Macroeconomic Aims

Sustained rate of economic
growth

Low inflation rate

Full employment

Favourable balance of
payments

Explain the main

macroeconomic aims, economic
performance and living
standards of a country

Explain the meaning of a

sustained rate of economic
growth, real and nominal
GDP/GNP per capita, low
inflation rate, full employment
and favourable balance of
payments

Explain the main macroeconomic aims a sustained rate of economic growth

to imply positive and stable growth, full employment to indicate non-zero low
rate of unemployment compatible with price stability, low inflation rate to
indicate price stability and favourable balance of payments to indicate
avoidance of large or persistent balance of payments deficit

Explain economic performance (as measured broadly by key economic

indicators such as GDP/GNP, inflation rate, unemployment rate, balance of
payments)

15

[Interpretation of the above economic information presented in textual, numerical or

graphical form is required. Derivation of index numbers is not required.
Computation of national income and balance of payments accounts is not
required.]

Explain the meaning of living standards in terms of quantitative and qualitative

aspects as measured by real GDP/GNP per capita, taking into account
income distribution, leisure time, externalities, quality of life, etc

[Comparison and discussion of living standards over time and between countries is
not required. Computation of GDP deflator is not required. Discussion of
Purchasing Power Parity Theory is not required.]
Macroeconomic Problems
and their causes

Undesirable rates of
economic growth

High inflation rate

High unemployment rate

Persistent or large BOP
deficit

Explain the meaning of

undesirable rates of economic
growth, high inflation rate, high
unemployment rate and
persistent or large balance of
payments deficit

Explain undesirable rates of economic growth and its causes for example
lack of AD, structural rigidities, insufficient resources, excessive demand.
Analyse their domestic and external consequences for example on price
levels, output and employment, balance of payments

8819 H1 ECONOMICS (2014)

Syllabus Content

Learning Outcomes
Students should be able to:

Analyse the causes and

consequences of the
macroeconomic problems

Remarks

Explain high inflation rate and its main causes demand pull and cost push
factors. Analyse their consequences for example on output and employment,
redistribution of income, balance of payments, exchange rates

Analyse the types of unemployment for example cyclical, frictional and

structural unemployment. Analyse their consequences for example, on
output, price levels

Macroeconomic Policies
16

Monetary policy and its

effectiveness

Explain monetary policy in a

broader international context
where interest rates and
exchange rates are alternative
instruments

Explain monetary policy in a broader international context where interest rates

and exchange rates are alternative instruments

Explain the domestic and

external effects of changes in
exchange rates and interest
rates

Explain the domestic and external impact of changes in interest rates on output
and employment, price levels and balance of payments

[Detailed analysis of interest rates as a monetary policy tool is not required.

Determination of interest rates is not required. Detailed knowledge of the financial
markets and institutions is not required. Discussion of other monetary policy tools
and their limitations is not required. Description and discussion of the credit
creation process and operation are not required.]

8819 H1 ECONOMICS (2014)

Explain persistent or large BOP deficit and its main causes for example, changes
in global demand, competitiveness, interest rates and exchange rates. Analyse
their domestic and external consequences for example, on output and
employment, price levels, exchange rates

Syllabus Content

Learning Outcomes
Students should be able to:

Discuss Singapores choice of

using exchange rates (rather
than interest rates) in an
exchange rate-based monetary
policy

Remarks

Discuss Singapores choice of using exchange rates in an exchange-rate

based monetary policy of maintaining price and macroeconomic stability to
achieve sustained economic growth

[Understand monetary policy framework in a small open economy such as

Singapore. A broad understanding of the managed float in the Singapore context
and flexible exchange rates will suffice. Knowledge of fixed exchange rates is not
required. Detailed discussion of the different types of exchange rate systems is not
required. Discussion of Real Effective Exchange Rate is not required. Detailed
discussion of exchange rate policies is not required.]
Explain the domestic and external impact of changes in exchange rates on
price levels, output and employment, balance of payments

17

[The Marshall-Lerner condition is not required but an understanding of the

importance of price elasticity concepts in determining the effectiveness of
exchange rate change in correcting BOP deficit is required.]

Evaluate the effectiveness of

monetary policy in achieving
macroeconomic aims

Evaluate the effectiveness of monetary policy as a whole for example, time

lags, accuracy and availability of information, political acceptability

[Evaluation of interest rate and exchange rate policies is not required.]

Fiscal policy and its
effectiveness

Explain discretionary fiscal

policy

Explain government expenditure and taxation as tools of discretionary fiscal

policy

[Only discretionary fiscal policy is required when discussing fiscal policy as a tool
for macroeconomic stability. Automatic stabilisers are not required. Detailed
discussion of the types and examples of taxation are not required.]

8819 H1 ECONOMICS (2014)

Syllabus Content

Learning Outcomes
Students should be able to:

Analyse the effects of fiscal

policy on the economy.
Understand the concept of the
simple multiplier process

[A detailed explanation of the

multiplier process using numerical
illustration and analysis is not
required.]

Discuss how discretionary fiscal policy is used to influence output and

employment, price levels and balance of payments

[A broad understanding of the simple multiplier concept an increase in AD will

have a multiplied effect on output will suffice. Mathematical analysis involving the
derivation and use of the multiplier formula is not required. Balanced budget
multiplier and deficit financing are not required.]

Evaluate the effectiveness of

fiscal policy in achieving
macroeconomic aims

Evaluate the effectiveness of discretionary fiscal policy for example, accuracy

of forecast, availability of information, time lags, crowding-out effect, policy
acceptability

Explain supply-side policies

Analyse the effects of supplyside policies on the economy

Explain the various types of supply-side policies for example, supply-side tax
cuts, deregulation and competition policies, elimination of structural
bottlenecks, promoting labour mobility and productivity

Evaluate the effectiveness of

supply-side policies in achieving
macroeconomic aims

Discuss how supply-side policies are used to influence output and

employment, price levels and balance of payments

Evaluate the effectiveness of supply-side policies for example, accuracy and

availability of information, time lags, uncertainty of outcomes, policy
acceptability

8819 H1 ECONOMICS (2014)

18

Supply-side policies and their

effectiveness

Remarks

Syllabus Content

Learning Outcomes
Students should be able to:

Remarks

2.3 International Economy

Free trade and its benefits

Explain the basis for trade using

the concept of opportunity cost

Explain broadly the principle of comparative advantage, how trade is possible

based on differences in opportunity costs and beneficial exchange ratio (terms
of trade) between countries

[Detailed discussion and analysis of comparative advantage using numerical tables

is not required. Theory of absolute advantage is not required. Measurement and
detailed knowledge of terms of trade are not required.]

19

Globalisation and its impact

Explain the benefits of free

trade and the reasons for
protectionism

Explain the benefits of free trade for example consumption gains and lower
prices, larger variety of goods and services, economies of scale, economic
growth, social, political and cultural ties

[The theory of absolute advantage

is not required. A brief explanation
of the principle of comparative
advantage using the concept of
opportunity cost is sufficient. A
detailed explanation of the principle
of comparative advantage using
numerical illustration is not required.
Explanation and analysis of the
various forms of protectionism are
not required.]

[Knowledge of the types of economies of scale is not required.]

Examine the economic impact

of globalisation on the
Singapore economy

Explain the reasons for protectionism to protect domestic employment,

correct balance of payments deficit

[Detailed knowledge, explanation and analysis of the various forms of

protectionism such as tariffs, quotas, etc, and their effectiveness are not required.
Diagrammatic analysis of tariffs and quotas illustrating redistributive effects and
changes in consumer and producer surpluses are not required.]

Explain the trend towards globalisation and discuss how economic

globalisation impacts on trade in goods and services and foreign direct
investment with respect to the Singapore economy

[A broad understanding of competitiveness is required. Detailed mathematical and

graphical analyses of the above impacts are not required. Detailed discussion of
free trade agreements (FTAs) is not required. Discussion of the types of
globalisation is not required.]

8819 H1 ECONOMICS (2014)

RECOMMENDED READING
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2
3
4

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2

Title

Year

Publisher

Cambridge International AS and A Level Economics

Economics, 8th Edition

2010
2005

Cambridge University Press

McGraw Hill

Principles of Economics, 9th Edition

Economics: Private Markets and Public Choice, 7th Edition

2008
2006

Pearson
Pearson

Principles of Economics, 3rd Edition

Stanlakes Introductory Economics, 8th Edition
Economics, 4th Edition
Economics, 11th Edition
Principles of Economics, 5th Edition
Economics, 8th Edition
Economics: Principles, Problems & Policies, 17th Edition
Economics Today, 15th Edition
Principles of Economics

2007
2009
2007
2007
2008
2008
2006
2009
2007

McGraw Hill
Pearson
Pearson
Oxford University Press
Cengage Learning
Cengage Learning
McGraw Hill
Pearson
Pearson

Economics: Principles and Tools, 6th Edition

Economics, 8th Edition
Principles of Economics: An Asian Edition

2006
2007
2007

Pearson
Pearson
Cengage Learning

Exploring Economics, 5th Edition

Economics, 7th Edition
Essentials of Economics, 5th Edition

2010
2009
2009

Cengage Learning
Pearson
Pearson

Economics in Public Policies The Singapore Story

2009

Marshall Cavendish Education

Economic Review (quarterly)

Economics Today (quarterly)

Philip Allan
Economics Today Ltd

8819 H1 ECONOMICS (2014)

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Author
General Texts
Bamford, Colin; Grant, Sue
Begg, David; Fischer, Stanley &
Dornbusch, Rudiger
Case, Karl E. & Fair, Ray C.
Ekelund, Robert; Ressler, Rand &
Tollison, Robert
Frank, Robert H. & Bernanke, Ben
Grant, Susan J.
Ison, Stephen & Wall, Stuart
Lipsey, Richard & Chrystal, Alec
Mankiw, N. Gregory
McEachern, William A.
McConnell, Campbell R. & Brue, Stanley
Miller, Roger
OSullivan, Arthur; Sheffrin, Steven M.;
Lim, K.L. & Seevaratnam, Vijayakala
OSullivan, Arthur & Sheffrin, Steven M.
Parkin, Michael
Quah, Euston; Wilson, Peter & Mankiw,
N. Gregory
Sexton, Robert
Sloman, John
Sloman, John
Supplementary Text
Tan, Say Tin et al.
Journals
-