Some economists argue that heavy government spending and trade unions can generate market disequilibrium. Even so, trade unions can also have an important part in economic development. Singapore has more than 60 trade unions, operating in both labour-intensive and capital-intensive industries.
(a)[2]
Define market disequilibrium, using your own words.
(b)[4]
Explain the distinction between labour-intensive and capital-intensive industries.
(c)[6]
Analyse the ways in which trade unions could increase economic development.
(d)[8]
Discuss whether high government spending can help a government achieve its macroeconomic aims, or not.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Quantity demanded is not equal to quantity supplied” …