Economic Case
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Introduction
The key economic issues in this article reflect that Singapore is facing problems such as ageing population and housing shortage for the elderly, and career prospect and unemployment which Prime Minister Lee Hsien Loong mentioned during the Chinese New Year dinner in his Teck Ghee ward.
Singapore government is observing closely on the economic slowdown and assure that Singapore is going to be a strong country. PM Lee also highlighted a series of long term projects which the government have planned for Singapore citizens, especially the elderly, lower income households and the needy.
Singapore government will go the extra mile and at the same time, called for every Singaporean effort to help the country do better.
Discussion of Problems
Figure 2.1 shows the circular flow in the market economy (Parkin 2009).. If government spending helps the economy of the country, it will be at (a) where government spend in creating jobs by building more hospital, schools and roads.
In the article, Singapore government have plans in finance expenditure with taxes and pay finanical transfers to households, such as unemployment benefits, education and housing subsidies and pay subsides to firms. The origin of the expenditure came from taxes, reserves and debts. These financial transfer are not part of the circular flow.
Figure 2.1
Circular Flow in the Market Economy
Career Prospect and Unemployment
An ITE student asked PM Lee about job prospect and Undertaker, Mr Ong also voice out during the dinner hoping the government can lower business tax and price of general goods for SME companies.
Singapore government is aware that unemployment will results in loss of income, production and human capital. The loss of income is devastating and prolonged unemployment always damages ones job prospects by putting an end human capital. It will also lead to social concern. When jobs are sacred, people will not have any income and when there is no income, there will be less spending. This result in low production and the cycle will carry on as shown in Figure 2.1; firms will hire less which means further loss of income and jobs. This is bad on the countrys whole economy. Scarcity occurs when there are inadequate resources available to fulfil limitless wants and needs.
Refer to Appendix 6.1 for Singapore statistic on employment (Department of Statistic Singapore 2011).