Question 1

There are a few possible sources of unemployment in Singapore. First, economic

slowdown since if the economy is slowing down, companies may cut back on hiring or even
lay off workers, resulting in higher unemployment rates. Second is technological
advancements, as technology continues to advance, some jobs may become automated or
outsourced to other countries, leading to job losses in certain industries. Third, skills
mismatch. There may be a mismatch between the skills that job seekers possess and the skills
that employers are looking for, resulting in unemployment. And the last one is structural
unemployment, this occurs when the structure of the economy changes, such as when certain
industries decline, and workers may not have the skills to transition into new industries.
(BLS, 2022).

Low unemployment is an important macroeconomic objective for the Singapore

government, as it can lead to higher standards of living, lower poverty rates, and greater
social stability. However, it should not be the sole objective, as other factors such as inflation,
economic growth, and income inequality also need to be taken into consideration. The
government can take steps to address the sources of unemployment, such as investing in
education and training programs to ensure that workers have the skills needed to succeed in
the job market, encouraging the growth of industries that are in high demand, and providing
support for workers who are transitioning to new industries. Additionally, the government
can implement policies such as tax incentives and subsidies to encourage businesses to hire
more workers, especially during times of economic slowdown. (OECD, 2019).

Question 2

A global recession is a period of significant economic decline that occurs

simultaneously in many countries around the world. During a global recession, economic
output decreases, and there is a reduction in the demand for goods and services. This, in turn,
can lead to lower employment rates and a decline in income levels. The circular flow of
income is a fundamental concept in economics that shows the flow of money and resources
between households, businesses, and governments. In a global recession, the circular flow of
income is disrupted as the demand for goods and services decreases. This, in turn, leads to a
reduction in the production of goods and services by businesses, causing a decrease in
employment rates and income levels. (IMF, 2021).
 As businesses experience a decline in revenue, they may reduce their investment and
hiring, leading to job losses and lower consumer spending. This, in turn, can lead to further
declines in economic activity, leading to a downward spiral. Governments may try to
counteract the effects of a global recession by implementing economic policies such as fiscal
stimulus, monetary policy, and other measures to increase consumer spending and stimulate
economic activity. However, these policies may take time to have an effect and may not be
sufficient to prevent a global recession from occurring or continuing for an extended period.
(NBER, 2021).

REFERENCE

BLS. (2022). Labor force statistics from the current population survey.
https://www.bls.gov/cps/tables.htm#charemp

OECD. (2019). Economic policy reforms: Going for growth 2019.

https://www.oecd.org/economy/going-for-growth-2019-9789264312114-en.htm

International Monetary Fund. (2021). Global economic outlook: A long and difficult ascent.
https://www.imf.org/en/Publications/GFSR/Issues/2021/03/23/global-financial-stability-
report-march-2021

NBER. (2021). The global economy. https://www.nber.org/global-economy-fallout-covid-19