ECONOMICS

1. How do we level up, as a country, given the UN Sustainable Development Goal 17 of economic growth?
Are we on the right track toward the achievement of this goal?
a. If yes, explain the policies that are geared toward the achievement of the goal.
- To achieve the UN Sustainable Development Goal 17, which focuses on global partnerships for
sustainable development, countries should prioritize collaboration, both internationally and
domestically. This involves fostering cooperation, trade, and investment while creating a supportive
domestic environment. Collaboration can provide access to technology, knowledge, and financial
resources, facilitating economic development. Commitment to open, fair, and rule-based trade can
boost exports and diversify the economy. To measure progress towards Goal 17, countries should
evaluate their engagement in international initiatives, trade agreements, and collaborative efforts to
address global challenges. Indicators such as foreign direct investment, trade balances, and
participation in international development projects can be used to assess progress. Regular
assessments and policy adjustments are essential to ensure continued progress in aligning with the
goal's principles and contributing to overall development.

2. The years 2020-2021 have been a rough journey for almost all countries around the world in dealing
with the COVID-19 pandemic. How did the economy perform in terms of its public health policy in
dealing with this health crisis? What are the notable steps undertaken and their impact on economic
growth?
- The COVID-19 pandemic has significantly affected global economies, prompting countries to
implement diverse public health policies to curb the virus and minimize economic repercussions.
The impact of these measures on economic growth varies, with notable actions including strict
lockdowns and restrictions on economic activities to control the virus's spread. While necessary for
public health, these measures led to disruptions such as job losses, reduced consumer demand, and
economic output decline. Central banks worldwide responded with monetary policy interventions
like interest rate cuts and asset purchases to inject liquidity and support economic activity. The
pandemic accelerated the adoption of digital technologies and remote work, as businesses and
individuals shifted operations online. This shift, driven by necessity, is likely to persist due to its
benefits, including increased productivity and reduced costs. Overall, the effectiveness of responses
to the pandemic in terms of economic growth depends on specific measures taken and individual
country circumstances.

3. What are the mediating variables in determining economic growth in terms of government policies?
How was each one of the following affected by a sudden change of market behavior of international
magnitude?

a. Savings and Investment: Economic uncertainty and lockdowns led to a decrease in consumer spending
and business investment. Individuals and businesses focused more on liquidity and preserving capital
rather than investing in long-term projects. To stimulate the economy, governments implemented fiscal
policies, such as stimulus packages and tax breaks, to encourage spending and investment. Central
banks also adopted monetary policies, including interest rate cuts, to make borrowing cheaper.
b. Research and Development: Many R&D activities were slowed down or redirected towards finding
solutions to the health crisis. Some sectors experienced delays in innovation and product development
due to supply chain disruptions and financial constraints. Governments increased funding for health-
related research and development, supported vaccine development, and implemented policies to
ensure the continuity of essential R&D activities.

c. Foreign Direct Investment (FDI): Global uncertainty led to a decline in FDI as investors became more risk
averse. Travel restrictions and economic downturns also affected cross-border investments.
Governments implemented policies to attract and retain foreign investment, such as providing
incentives, streamlining regulations, and addressing concerns related to the business environment.
Some countries also enhanced screening mechanisms to protect critical industries.

d. Education: School closures and a shift to online learning disrupted education systems worldwide. This
affected students' learning outcomes, access to education, and the overall human capital development.
Governments had to adapt quickly by investing in technology for remote learning, providing financial
support to students, and implementing policies to address educational inequalities exacerbated by the
pandemic.

e. Health and Nutrition: The health sector faced unprecedented challenges, with increased demand for
healthcare services, strained healthcare systems, and disruptions in the supply chain for essential
medical supplies. Malnutrition and mental health issues also became concerns. Governments
implemented public health measures, increased healthcare funding, and adopted policies to ensure the
availability of essential medical supplies. Social welfare programs were expanded to address the
economic impacts on nutrition and mental health.

4. The countries that are considered poor almost always have workers in less capital- intensive production
processes like agriculture. It is simpler and it entails fewer tasks. Explain this using the O-Ring model.
- Agriculture is often considered a less capital-intensive and simpler production process compared to
more advanced industries. The O-Ring model suggests that in economies with a shortage of skilled
workers, engaging in simpler tasks becomes a rational choice. The complexity of tasks is limited to
match the available skill level, preventing the economy from moving towards more intricate and
capital-intensive production. To break out of this cycle, interventions that address the skill gap and
promote the development of human capital are crucial. Investments in education, training
programs, and technology adoption can help enhance the skill level of the workforce enabling
economies to transition to more effective production processes.

5. On the assumption that the economy is closed, and no technological progress is going on, explain the
relationship of depreciation, capital, and output in a graph. Why is capital, at a certain level, diminishes
in value on a certain point of steady state?
- In a closed economy without technological progress, the relationship between depreciation, capital,
and output reflects the dynamics of diminishing marginal returns. At the steady state, the value of
additional capital diminishes as it only offsets the depreciation, leading to a stable equilibrium
where the economy operates at a constant level of capital and output.
6. How does external debt affect the economic growth and development of a country?
- External debt can significantly impact the economic growth and development of a country. While
acquiring external debt can provide a source of financing for investments in infrastructure and
development projects, excessive or mismanaged debt can lead to adverse consequences. High levels
of external debt may result in increased debt servicing costs, diverting a significant portion of
government revenue away from critical public services and investments. This can hinder economic
growth by limiting the government's ability to fund essential development initiatives.

7. Can you still remember the factors of production? Each one of them plays an important role in economic
growth and development. Explain each.

a. Land: refers to all natural resources that are used in the production process, such as agricultural land,
forests, water, minerals, and other natural resources. Land is a fixed factor of production and is essential
for the production of goods and services.

b. Labor: refers to the physical and mental efforts of people who are involved in the production process.
Labor includes both skilled and unskilled workers. Labor is a mobile factor of production that can move
between different sectors of the economy based on demand.

c. Capital: refers to the man-made resources used in the production process, such as machinery,
equipment, buildings, and infrastructure. Capital is a more durable factor of production compared to
labor and plays a crucial role in enhancing productivity and efficiency.

d. Entrepreneurship: Entrepreneurship refers to the ability of individuals to take risks, innovate, and
organize the other factors of production to create goods and services. Entrepreneurs play a crucial role
in driving economic growth by identifying opportunities, mobilizing resources, and creating value.

8. Is the study of economic growth and development more inclined to microeconomics or

macroeconomics? Why?
- The study of economic growth and development is more inclined toward macroeconomics. While
microeconomics focuses on the behavior of individual agents and firms, macroeconomics examines
the broader aggregates that shape the overall performance of an economy. Macroeconomics
provides a framework for understanding how these elements interact to influence long-term
economic trends and the overall well-being of a society. By studying macroeconomic indicators and
policies, economists can gain insights into the systemic factors that contribute to sustained
economic growth and development on a larger scale.

9. The Philippines currently has a program called, "Build Build Build," geared toward more infrastructure
projects, especially in the rural areas, Research how far we have come so far and what the future entails
when this is completed.
- The "Build Build Build" program, launched by the Philippine government in 2016, aims to accelerate
infrastructure development in the country, particularly in rural areas. The program aims to address
long-standing infrastructure gaps and improve connectivity, mobility, and access to basic services in
various regions. One of its projects was the Cebu-Cordova Link Expressway or what we called CCLEX.
 It is an 8.5-kilometer cable-stayed bridge connecting Cebu City and Cordova City, expected to reduce
travel time between the two areas from 45 minutes to just 15 minutes. The both ends of the bridge
were joined nearly four years since the construction began, completed on October 2021.

10. How do we balance between health security and economic growth relating to our experience during the
quarantine periods of 2020 to 2021?

- Balancing health security and economic growth during the quarantine periods of 2020 to 2021
required a delicate approach. The measures implemented, such as lockdowns and restrictions,
aimed to curb the spread of the COVID-19 virus and protect public health. However, these measures
had economic consequences, leading to job losses and reduced economic activity. Striking a balance
involved implementing targeted public health interventions, like testing and contact tracing,
alongside economic stimulus packages to support affected individuals and businesses. Flexibility in
quarantine measures allowed for a nuanced response, prioritizing health when necessary while
gradually reopening economic activities when conditions permitted. This balancing act emphasized
the interconnectedness of health and the economy, highlighting the importance of adaptive policies
to navigate the evolving challenges posed by the pandemic.