Understanding Static and Dynamic Economic Concepts
Students doing A Level Economics should understand the differences between static and dynamic economic concepts. Static concepts involve memorization of factors affecting economic performance and living standards, while dynamic concepts focus on the impact of events on macroeconomic outcomes. JC Economics students under TET should be familiar with various frameworks and structures to aid in understanding these concepts, such as the DIRCO and GDV essay structures.
Understanding Macroeconomic Performance
H1 and H2 Economics students should also be aware that 80% of macroeconomic problems are linked to Aggregate Demand (AD) and Aggregate Supply (AS) analysis. For example, when AD is too high, demand-pull inflation results. When AD is too low, macroeconomic problems include a recession, deflationary pressures and cyclical unemployment. On the other hand, AS links to macroeconomic problems (goals) such as cost-push inflation and an economy’s productive capacity.
Historical Economic Events and Current Trends
At the same time, drawing real-world links to key historical economic events, starting with the Asian financial crisis in 1997 and continuing through the dot-com bubble burst in 2000 and the global financial crisis in 2008 can help to deepen a student’s understanding of macroeconomic goals. For example, the current surge in gold prices and the increased public interest in purchasing gold represent investors’ responses to global volatility, indicating a climate of uncertainty.
Understanding Macroeconomic Problems
Other than understanding the relationship between business cycles and macroeconomic issues, and noting that 80% of these problems are linked to changes in aggregate demand and supply, JC Econs students should also be familiar with key concepts like cost-push inflation and demand-pull inflation, including their relationship with actual growth and unemployment. One should also recognise different types of unemployment, including structural and frictional unemployment, and their difference compared to demand deficient unemployment.
Understanding Structural and Frictional Unemployment
Structural and frictional unemployment are unique in that they are not reflected in AD-AS analysis. Structural unemployment arises from a mismatch between available skills and job requirements, exemplified by workers losing jobs to AI. Frictional unemployment is however defined as a temporary state where individuals are transitioning between jobs or searching for their first employment. One should recognise the importance of improving information flows between employers and potential employees to reduce frictional unemployment.
Understanding Level 3 Criteria for Essays
Aside from the above content highlights, students should be familiar with the Level 3 criteria necessary for scoring high marks on essays, specifically focusing on the importance of content and context. TET H2 Econs tuition students are trained on the framework for infusing context into responses, using the acronym DDEE.
With regard to inflation, other than defining it as a sustained increase in the general price level, students should also be able to distinguish between cost-push and demand-pull inflation. Students should recognise the importance of providing rigorous examples that identify root causes of changes in aggregate demand, rather than merely stating components that have changed. It is also important to note that induced consumption cannot be considered a root cause.
Understanding The Importance of Context
TET Economics tutors make it a point to reiterate the significance of context in macroeconomic discussions, particularly regarding inflation. Through introducing the PTSD framework, students can have a laser focus to infusing context into their answers.
P for Preamble – importance of utilising events highlighted in preamble for answer
T for Trend – recognising the distinction between a recession and an economic slowdown, noting that a recession is characterized by a decline in GDP, while a slowdown involves a decrease in the growth rate of GDP. This includes providing diagrams to illustrate how rising aggregate demand (AD) at a falling rate can indicate a slowdown.
S for Singapore – understanding Singapore’s economic characteristics, such as being export-driven and vulnerable to cost-push inflation due to its reliance on imports.
D for Differentiate – distinguishing between domestic and international factors.
Conclusion
Through focusing on CONTENT and CONTEXT in exam preparations, TET has helped students who were previously struggling with answering techniques in Economics gain more confidence, certainty and speed in writing their answers.
To find out more, book a trial Economics class with us today!