supply chain disrup also increases cop

need to pay attention to type of exports affected due to border closure

this has to be explained, for links to preamble

so increase in costs of prod —> SRAS decrease, movement along AD—> fall in actual growth
 FDI will have lower profit margins..less incentive to invest into Singapore

until a fall in initial injection = sum of fall of withdrawals

yes true, but think that they still expereinced sharper decreases in domestic C and I
 lower external value of SGD

assuming dd for exports are price elastic

SG is a small and
open economy,
hence reliant on
export demand,
depreciation is
extremely effective..

SG is a small and
open economy
that lacks natural Domestic consumers find imports more expensive..assuming import demand is also price elastic, this leads to decrease in import expenditure.
resources such as
assuming marshall lerner condition holds..sum of PEDx and PEDm > 1..
sand, food and
oil..highly reliant
on imports as
FOP..

with this train of thought, and

COVID-19 root cause,, can
consider to conclude to say
that depreciation not very
effective, must wait for
recovery of global economy,
border reopening, not possible
to substitute a fall in (X-M)
with lower priced exports from
depreciation

While this solves

inflation, it by no means
solves the root cause
brought about by
border closures.. Think
easier to say demand
management policies
like fiscal and monetary
and western countries..
(read the VJC ans!)
dont think should explain imperfect info

Need to contextualise the additional costs to society —> see highlighted ans

think the idea is to explain the

considerations according to
costs, benefits and unintended
consequences, and unknown
information, the benefit of
intervention, which is the
reduction of deadweight loss
must be phrased and be
obvious enough? not like a
typical explanation of market
failure qn?
 Hm in explaining the benefits of intervention, i think that
only like the important parts of it like the contextualisation
of the costs, explaining the what is a external cost etc, no
need the full DWL explaination etc

see comments in answer attached regarding imperfect info

so all the explanation you had in the previous 2 pages for
the 2 respective market failures, they are supposed to be
here

Think there is a need to draw

the diagram to show a net
positive gain to society when
the elimination of DWL > loss of
CS and PS because that EC is
so high in the first place.
 this is
sound.

ok for both evaluations. think need to substantiate why gov will overestimate charges —> think that
plastic bags actually do help improve sanitation in singapore, so lowering its consumption could lead to
additional environmental consequences? therefore this could lead to overestimation of MEC?

higher costs of production,passed on to consumers in the form of higher prices, reduce equitability for society,

yeah, so perhaps the way to reduce DWL is to complement other policies such as recycling to reduce
the extent of EC to taxation, and to use public edcuation to solimperfect information. Point about lower
income groups could be elaborated, they already spend a large percentage of their income onto basic
necessities like groceries and hawker meals, to get them to pay more for hawker food or grocery
shopping to bring home food via plastic bag could really disproportionately reduce their material welfare.