How to Answer Paper 1 Case Study Questions on Macroeconomics – this can be easily tackled using TET’s BAE Approach.
How to Answer Paper 1 Case Study Questions on Macroeconomics – B for BALANCE
When describing or summarising a trend account involving Balance accounts, the two marks should be allocated towards i) describing the position i.e. surplus or deficit; and ii) explaining the trend i.e. increasing/decreasing or improving/worsening.
Balance accounts include balance of trade (BOT) or the government’s budget balance, and both could end up as a surplus or deficit. BOT is given by export revenue minus import expenditure while budget balance equals government tax revenue minus government spending.
For example, if the BOT (in billions) was 500 (2021)), 600 (2022), 800 (2023), we will describe this as an increasing surplus.
Conversely, if the BOT (in billions) was 500 (2021)), 600 (2022), -800 (2023), we will describe this as worsening from a surplus to a deficit.
Note that in both cases, the positions and trends are clearly identified. Avoiding using increasing/decreasing unless a consistent surplus or deficit is noted throughout the entire period. A precise answer would be enough to secure both marks.
How to Answer Paper 1 Case Study Questions on Macroeconomics – A for Absolute (versus Growth Rates)
It is common for data (whether in the form of a table or chart) to present figures in growth terms, such as inflation rates or real GDP growth rates. Students are then asked to summarise the trend in level terms, such as price levels or real GDP levels.
The GOLDEN rule of thumb to remember is that while growth rates may decline, the underlying level is still rising as long as growth rates remain positive. For example, a real GDP growth rate trend as follows: 5% (2021) to 4% (2022) then 2% (2023) still illustrates a rise in real GDP levels.
How to Answer Paper 1 Case Study Questions on Macroeconomics – E for Exchange Rates
Finally, when analysing trends in exchange rates, there are two game-changing tips to ensure a 100% accurate answer:
- Terminology: Use “appreciate/depreciate” instead of “increase/decrease” to summarise exchange rate trends
- Reference: Always identify the currency which has been set to “1” in the axis. For example, a y-axis depicting “Price of SGD in terms of USD” would have SGD set as 1. On the other hand, a y-axis depicting “Amount of SGD to 1 USD” would have USD set as 1. For the currency set to 1, an upward trend reflects appreciation in its value (depreciation of the other currency). The reverse is true for a downward trend.
Summary
Students seeking to stay ahead in school need to learn more about exam-hacking techniques like the ones above. This will help them to ACHIEVE MORE WITH LESS, which is a basic principle underlining TET’s teaching methodology. Students or parents can check out TET’s regular Economics class schedule here, or contact us directly at 9070-6248.