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expansionary fiscal policies which would involve reducing the taxes and increasing thespending of the government. By reducing the taxes the government will increase thedisposable income and hence it will also provide help in increasing the consumption that willresult in higher aggregate demand. The higher aggregate demand will result in a rise in realGDP. If the organisations increase the production there will be a rise in demand for theworkers and therefore it will bring down the demand deficient unemployment (Snower &Dehesa, 2005). It will also mean that strong economic growth will result in less number oforganisations going bankrupt which will further reduce joblessness in the economy. Thesupply-side policies like that of education and training and reducing the frictional andstructural unemployment in Singapore that would help in overcoming the imperfections thatare present in the Singapore’s labour market and bring down the unemployment that is causeddue to the supply side factors. The growth in the household debt can result in household deleveraging “following a balancesheet shock can imply an abrupt contraction in household consumption to well below thelong-term level (overshooting)” (Debelle, 2004). The total cost related to contraction in theeconomic activities could be mitigated by offsetting it through the adoption of a temporarymacroeconomic policy stimulus. The main rationale behind this is that in an economy wherehouseholds are credit constrained expansionary fiscal policies and targeted governmentspending at the financially constrained household can help in reducing the household Debt(Debelle, 2004). Also does social safety net could provide a targeted transfer to suchhouseholds which are in debt and have a marginally high propensity for consumption withoutthe need for additional policy deliberation. In order to deal with the household debt, thegovernment would have to liberalise the planning laws and enable house building (Fay, Hurst& White, 2002). By normalising the house prices by increasing the supply and lowering thedemand will in the long run along with other benefits improve the mobility of the labour,reduce poverty reduce inequality and also will bring down household debt (Fay, Hurst &White, 2002). The Government of Singapore might also seek to create inflation that willbring down the real value of household debt. New mechanisms for approving loans that willbring down the systematic risk in the sector.5 | P a g e
Source: (Buck, 2019)End of Part B6 | P a g e
PART C: Micro-credential on Information LiteracyBrandon Cheng: Chew Yin Siew: Jomaine Ho: ReferencesBei Yi, S. (2018). More Singaporeans find jobs, but long-term unemployment rate rises:MOM. Retrieved from -