expansionary fiscal policies which would involve reducing the taxes and

Expansionary fiscal policies which would involve

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expansionary fiscal policies which would involve reducing the taxes and increasing the spending of the government. By reducing the taxes the government will increase the disposable income and hence it will also provide help in increasing the consumption that will result in higher aggregate demand. The higher aggregate demand will result in a rise in real GDP. If the organisations increase the production there will be a rise in demand for the workers 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 of organisations going bankrupt which will further reduce joblessness in the economy. The supply-side policies like that of education and training and reducing the frictional and structural unemployment in Singapore that would help in overcoming the imperfections that are present in the Singapore’s labour market and bring down the unemployment that is caused due to the supply side factors. The growth in the household debt can result in household deleveraging “following a balance sheet shock can imply an abrupt contraction in household consumption to well below the long-term level (overshooting)” (Debelle, 2004). The total cost related to contraction in the economic activities could be mitigated by offsetting it through the adoption of a temporary macroeconomic policy stimulus. The main rationale behind this is that in an economy where households are credit constrained expansionary fiscal policies and targeted government spending 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 such households which are in debt and have a marginally high propensity for consumption without the need for additional policy deliberation. In order to deal with the household debt, the government 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 the demand 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 will bring down the real value of household debt. New mechanisms for approving loans that will bring down the systematic risk in the sector. 5 | P a g e
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Source: (Buck, 2019) End of Part B 6 | P a g e
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PART C: Micro-credential on Information Literacy Brandon Cheng: Chew Yin Siew: Jomaine Ho: References Bei Yi, S. (2018). More Singaporeans find jobs, but long-term unemployment rate rises:MOM. Retrieved from -
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