Factors and Drivers of Gdp Gowth
Question 1
GDP growth occurs when there is an increase in change of real GDP from the previous year to the current year.
Labor, capital, land and entrepreneurship produces GDP and the productivity of these production factors determines the quantity of real GDP. In the Singapore economic environment, the supply of land is fixed and constant, so our real GDP growth constitute and depend heavily on labor and foreign capital investments.
A huge bulk of GDP generated, 71.7% comes from the services sector, based on a 2010 estimation by the CIA. Services like wholesale and retail, financial and business services most of which comes from our tourism and financial industry.
Factors and Drivers of Growth
Production
The quantity of labor employed in an economic environment is a variable factor that affects production, therefore it is one factor that can directly influence and change real GDP. Based on a labour market report of the second quarter of 2011 released by the Ministry of Manpower, unemployment rate increased in June 2011 to levels around the same as the previous year. In an environment of increased quantity of labour (with all productivity factors remaining constant), production can then increase, thus causing growth, therefore if labour quantity remains stagnant, production will, too and therefore impedes growth. With this sharp slowdown in production output, labour productivity also fell for the first time in two years, confirms the report.
Labour Market, Demand and Supply
What constitute the quantity of labour employed in a labour market, are basically the wage relationship between demand and supply of labour and how they come to labour market equilibrium.
What really drives the demand for labour may be a variety of reasons from the need for expertise to the need for expansion for corporations, but what really affects the quantity of demand is the wage rate of labour. The real wage rate is defined as the quantity of goods and services produced per
GDP growth occurs when there is an increase in change of real GDP from the previous year to the current year.
Labor, capital, land and entrepreneurship produces GDP and the productivity of these production factors determines the quantity of real GDP. In the Singapore economic environment, the supply of land is fixed and constant, so our real GDP growth constitute and depend heavily on labor and foreign capital investments.
A huge bulk of GDP generated, 71.7% comes from the services sector, based on a 2010 estimation by the CIA. Services like wholesale and retail, financial and business services most of which comes from our tourism and financial industry.
Factors and Drivers of Growth
Production
The quantity of labor employed in an economic environment is a variable factor that affects production, therefore it is one factor that can directly influence and change real GDP. Based on a labour market report of the second quarter of 2011 released by the Ministry of Manpower, unemployment rate increased in June 2011 to levels around the same as the previous year. In an environment of increased quantity of labour (with all productivity factors remaining constant), production can then increase, thus causing growth, therefore if labour quantity remains stagnant, production will, too and therefore impedes growth. With this sharp slowdown in production output, labour productivity also fell for the first time in two years, confirms the report.
Labour Market, Demand and Supply
What constitute the quantity of labour employed in a labour market, are basically the wage relationship between demand and supply of labour and how they come to labour market equilibrium.
What really drives the demand for labour may be a variety of reasons from the need for expertise to the need for expansion for corporations, but what really affects the quantity of demand is the wage rate of labour. The real wage rate is defined as the quantity of goods and services produced per
References: Singapore Department of Statistic (2010), THE REBASING OF THE CONSUMER PRICE INDEX, Singapore: Singapore Department of Statistic The People’s Action Party (2011), SECURING OUR FUTURE TOGETHER, Singapore: The People’s Action Party. Ministry of Trade and Industry (2010), Census of Population 2010 Statistical Release 3, Geographical Distribution and Transport, Singapore: Ministry of Trade and Industry Baud, S. 2007. Singapore Organic Food Market Overview: Queenscliff, DPI Agribusiness Group. Available [http://www.dpi.vic.gov.au/agriculture/investment-trade/market-access-and-competitiveness/markets/singapore] 7 Nov 2011 Ng, L.C. and Hoe, Y.N. 2011. 10 new hawker centers to be built after 26 years, Channel News Asia. [Online]. Available http://www.channelnewsasia.com/stories/singaporelocalnews/view/1158019/1/.html [7 November 2011]