An Overview of A Level H2 Economics Part 3: The National Economy

Learning economics is an important part of becoming a world citizen. Economics concerns how people, companies, and countries use their resources to produce goods and services. It’s also about how individuals interact in the marketplace with concerns for social welfare. 

Economics is about what we choose to do when given too many options or making economic decisions that affect others. Studying economics provides you with the knowledge to make informed choices.

A Level economics follows suit and teaches you valuable skills like making different trade-offs (choosing one thing instead of another) and related economics decisions.

A Level economics is available in two forms in Singapore, H1 and H2. Both these syllabuses have varying paper patterns, but they assess similar skills in each student.

The overall syllabus content comprises three primary themes:

• The Central Economic Problem 
• Markets 
• The National and International Economy

This is our third article in the series discussing the H2 economics syllabus. Today, we’ll be discussing “The National and International Economy.” 

So without further ado, let’s jump right in!

The third part of our syllabus gives students an overview of the mechanism of the national and international economy. This theme will mainly focus on governments as economic agents while acknowledging that the stretch of government interference differs in economies. 

Students will cross-examine macroeconomic issues, policies, and aims related to the following:

1. Growth
2. Inflation 
3. Unemployment
4. Exchange rates
5. Balance of trade
6. Income distribution

All mentioned references will be made in the context of the Singaporean economy. Students will have to examine Singapore’s position in the world economy and the effect of Globalization on Singapore. 

Students will assess the impact of external trends on the international, national, and regional economies, along with their complications for policy choices and decisions. 

In this theme, you will be required to use principles, concepts, and theories that you learned from Themes 1 and 2 to assess the problem of lack of resources and the concept of trade-offs at the national and international economy level.

Theme 3.1 Introduction to Macroeconomics

Economics Content

3.1.1 Circular flow of income as an interactive model involving households, firms, government and the foreign sector

3.1.2 Aggregate demand (AD) and aggregate supply (AS)

Concepts and Tools of Analysis

• Circular flow of income 
• Aggregate demand and factors affecting aggregate demand 
• Aggregate supply and factors affecting aggregate supply 
• National output 
• general price level 
• Multiplier effect

Theme 3.2 Macroeconomic Aims and Policies

Economics Content

3.2.1 Macroeconomic aims concerning

a. Living standards and its indicators
b. Economic performance and its indicators

3.2.2 Macroeconomic issues – causes and consequences concerning

a. Economic growth
b. Inflation and deflation
c. Full employment and unemployment
d. Balance of trade deficit and surplus

3.2.3 Macroeconomic policies to achieve macroeconomic aims

a. Policy measures and their effectiveness influencing AD/AS

Concepts and Tools of Analysis

• Standard of living
  – Material and non-material well-being
  – Gross Domestic Product (GDP) and Gross National Income (GNI)
  – Human Development Index (HDI)
• Income distribution
  – Income inequality
  – Gini coefficient
• Economic growth
  – Actual and potential growth
  – Sustainable growth
  – Inclusive growth 

• Full employment and unemployment
  – Types of unemployment 

• Price stability
  –  Inflation and deflation
  – Consumer price index (CPI)
• Nominal and real concepts
• Balance of trade surplus and deficit
• Current account of the balance of payments*
• Short-term capital flows
• Long-term capital flows
  – Foreign direct investment
• Fiscal policy
  – Discretionary fiscal policy
  – Automatic stabilizers
• Government budget surplus and deficit* 
• Monetary policy
• Interest rates
• Exchange rate appreciation and depreciation
• Supply-side policies

Theme 3.3 Globalization and the International Economy

Economics Content

3.3.1 Globalization and its impact on the economy

a. Factors affecting globalization
b. Benefits and Costs of Globalization

3.3.2 Trade policy decisions and their impact on the economy 

a. Free trade
b. Protectionism
c. Economic co-operation and trade agreements between countries

Concepts and Tools of Analysis

• Globalization 
  
• Theory of comparative advantage
• Dynamic comparative advantage
• Free trade
• Patterns of trade
• Free trade versus protectionism
• Protectionist measures
  – Tariffs and non-tariff measures
• International and regional economic co-operation 

Now I am aware that if you are a new H2 economics student, many of these mentioned terms here may seem highly technical or even gibberish to some, but you don’t have to worry.

We have the company of an expert economics tutor like Mr Anthony Fok available here at JC Economics Tuition Centre.

Mr Anthony teaches both H1 and H2 classes and will take you through the A Level economics syllabus in depth. You can check out his weekly economics tuition schedule here.

Still, have a query on our A Level economics tuition? Don’t hesitate to reach out to us!