Alas, Term 3 has arrived... The term where 'people start to behave weirdly', as coined by Shenxiang.
Today during physics lecture, Joel suddenly turned around for about 10 seconds, looked at Rayshio, and when they made eye contact, Joel gave a creepy smile, and turned back again to face the front.
Pretty creepy.
Anyway, I don't know about the rest of you, but for me. I've been using foolscap paper more than I use toilet paper. And thats bad, considering my active bowel movement.
Thats why I have this conspiracy theory. that the A levels is merely a top-secret highly-confidential expansionary economic policy undertaken by the Singapore government under the codename 'MOE'.
This expansionary policy's target is to encourage spending in the economy, without requiring much government spending (other than edusave, subsidies, educational bursaries and scholarships). You might to call into question my theory, but I will further justify it.
1. In preparation for A levels, you buy TYS, Guidebooks, prelim papers, stationery (lots of pen ink refills, mechanical pencil lead, writing paper etc), and if desperate enough, buying the Popular Bookstore Students' Card so you can get discount on all of the items listed above. See? All this additional spending by Consumers (in this case, students) increases consumption in the Singaporean economy without needing much prompting. Admit it. You buy all these guidebooks, TYS etc on your own accord, not forced. Hence, this is, in fact, induced spending. You are induced to spend by the A levels.
2. By mugging, you increase your brain capacity in the long-run. This solves the problem of brain-drain in the economy, and adds more value-addedness to the Singaporean worker. With enhanced mugging capabilities, Singaporeans of the future will be more productive. With this increase in productiveness, the productive capacity of the economy will increase, hence shifting LRAS rightwards (sorry, can't really draw diagram here). Hence, with this increase in LRAS, potential output increases, and economic growth can be attained, and inflation kept in check as well. Wow. 2 macro goals solved there.
3. Did I mention how much we spend on A levels? Oh wait I did. But I forgot to continue on that train of thought. Anyway, with the increase in Consumption, Aggregate Expenditure increases, since C is a component of AE. With this increase in AE, National Income will increase more than proportionately, via the multiplier effect.
Assumptions (Let me try and recall...) :
1. 4-Sector Economy, consisting of households, investments, government expenditure as well as exports and imports.
2. The economy in Singapore is operating below full employment
3. Singaporean kids are kiasu/humji/scared fail, and spend a lot of textbooks, tuition etc, increasing expenditure by 5 billion
4. Marginal Propensity to Consume = 0.7 (Singaporean students can be big spenders)
Marginal Propensity to Import = 0.1
Marginal Propensity to tax = 0.1
Marginal Propensity to Save = 0.1
The Multiplier works on the principle that spending generates income, which then generates more spending.
(Imagine the AE-NY diagram is here, it's rather difficult to draw here)
When Singaporean students spent $5 billion on TYS, they will require additional tuition in order to know how to do every TYS question. Hence, they will hire more tutors. Hence, TYS publishers and tutors gain additional income of $5 bn. When households receive the $5 bn, $0.5 bn will be saved, spent on imports, and paid in terms of taxes each, leaving behind $(0.7)(5) bn to be spent. Thus, there will be an increase in consumption of $3.5 bn. In order to meet this excess demand, firms will hire more factors of production to increase production (probably production of more TYS), including labour. When these households take home this income of $3.5 bn, again, $0.35 bn will be saved, spent on imports, and paid in taxes each, leaving behind $(0.7)(0.25) bn to be spent. The multiplier process would continue until the increase in Consumption and National income is negligible due to the existence of leakages such as savings, tax and import expenditure.
(Insert the table here, or try and imagine it's here, I'm too lazy to include it again).
To calculate the total change in national income, we can use the following equation:
Change in National Income = K x Change in Aggregate Expenditure, where K, the multiplier, is 1/Marginal Propensity to withdraw.
In this case, k = 1/0.3. Hence, overall increase in National Income would be 3.33 x $5 billion. Wow.
So, with this increase in spending on TYS, National Income can increase more than proportionately via the multiplier, and we can see that not only does NY increase more than proportionately, there is also Long Run Economic Growth, with the real output and employment increasing. Wow. Okay lets move on to the next point.
4. Increasing demand for TYS and tuition leads to increased competitiveness in the industry.
All the various TYS publishers will try to DIFFERENTIATE their product, INTEGRATING it together with other ideas to give a creative product (e.g. JC2/IP4 March Math Revision Package). Also, different tuition agencies and tutors will spring out, offering a variety of choices to consumers/students. With the high competition, cost-effectiveness can also be ensured, and cost of production will be kept low, hence cost savings increase, which may be passed on to consumers in the form of lower prices of TYS. Tutors will also engage in 'creative' techniques to engage their students, hence 'separating XYZ tuition agency from the rest'.
So, as we can see from the justifications above, I can conclude that my conspiracy theory is valid. No need for evaluation, my whole post makes sense, and therefore requires no evaluation. It is flawless. Perfect.
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Disclaimer: Lots of assumptions, and some concepts may or may not be correct. Reproduce this essay at your own risk. The author holds no responsibility for any damage caused by the use of this essay or whatsoever.
I'd bet Ms. Heng would be pretty proud of me if she read this post!