The Monetary Authority of Singapore (MAS) has a unique monetary policy framework that focuses on managing the exchange rate rather than interest rates. This approach has implications for the country's macroeconomic objectives.

(a) Explain why Singapore chooses exchange rates rather than interest rates as its main tool of monetary policy.

TYS 2023 6a) 

Explain why expansionary fiscal policy designed to achieve economic growth or lower unemployment may lead to undesirable consequences. [10]