Reference no: EM132396548 , Length: word count : 500
Question 1
If the USA wants to reduce its imports (to promote domestic production) from China due to its trade deficit with China, compare which policy works more effectively, an import quota or an equivalent tariff? Reflect harder to compare the market adjustment by quota or tariff when domestic supply decreases due to a higher wage in a new labour contract. Use a graph to support your analysis.
Question 2
Discuss and compare fixed and flexible exchange rate systems with the necessary diagrams. How has the MAS worked with its managed float for Singapore?
Question 3
In the table given below, Singapore's balance of payments (BoP) comprises:
(a) Current account of goods, services & factor income (primary & secondary income balance)
(b) Capital & Financial account as DFI & Portfolio Investment
(c) Errors & Omissions
(d) A+B+C = BoP reflected in E
(e) Reserve Assets
(f) Official reserves (stock as accumulated over the years)
Explain the balance of payments position of Singapore and why traditionally, its trade in services rather than trade in goods dominated its Current Account. Why is this not a problem in policy?