Economics Tuition – Video by Economics Focus

This e-learning video developed by JC Economics Tutor Simon Ng of Economics Focus examines the topic of National Income Determination and the AD-AS analysis to analyze why an increase in national income will be harmful to the economy. The question requires students to identify the possible impacts of an increase in national income on aggregate demand (AD) components, like consumption and investment expenditures. Changes in the level of national income can be interpreted in the changes of the real Gross Domestic Product (GDP), which then affects the General Price Level (GPL).

Discuss the view that a large increase in national income is often but not always desirable. [15]

Analysis of The Question

For this question, the requirement of the question is to analyse how an increase in national income is beneficial, following which evaluate how the increase in national income may be undesirable as it is associated with problems that may undermine the economy in terms of how other aims of government are affected when the economy focuses too much on the growth of national income.
Different perspectives must be set in trying to depict whether the increase in national income is beneficial or not



Source of Information

Part of knowledge needed for this question:

  • Benefits of increase in national income in terms of:

    • Employment

    • Improvement of standard of living

    • Potentially fuel greater actual and potential growth

  • How an increase in national income may lead to demand-pull inflation if the economy is near or at full employment

  • How an increase in national income may be associated with problems such as:

    • Structural unemployment

    • Income inequality

    • Worsen non-material standard of living



Economics Tuition: “Inflation is harmful to an economy and hence it should be the priority of the Singapore government to reduce inflation.” Discuss.

Economics Tuition: To what extent is the policy of gradual appreciation of the Singapore Dollar (SGD) always a desirable approach to maintain economic stability in Singapore?

Economics Tuition: Assess the view that the Singapore government should use taxes rather than any other economic policies when dealing with the market failure associated with negative externalities

Economics Tuition: Discuss the extent to which a government can assess that its goal to improve the general standard of living of its population has been achieved

Economics Tuition: Discuss the extent to which the austerity measures in the EU will have an adverse impact on the Singapore economy

Economics Tuition: Discuss the impacts of a volcanic eruption and oil spill on the airline industry and its related markets

Economics Tuition: Discuss the relative significance of input cost, consumer incomes and market concentration in influencing firms’ pricing decisions

Economics Tuition: Discuss the view that a large increase in national income is often but not always desirable

Economics Tuition: Explain how a government can improve the current and future standard of living of its population

Economics Tuition: Explain what would limit the effectiveness of the austerity measures in the EU

Economics Tuition: Explain why inflation can remain high despite a slowdown in economic growth in Singapore

Economics Tuition: Using appropriate examples, explain and illustrate the terms ‘externality’ and ‘public good’