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Eco 415 Economics: University of Technology Mara Seremban 3
Eco 415 Economics: University of Technology Mara Seremban 3
TECHNOLOGY MARA
SEREMBAN 3
NAME
GROUP
2015896558
2015239208
2015859598
S3 CS 248 3B2
LECTURER :
SUBMIT ON :
27 NOVEMBER 2015
1. Define inflation and name the economic indicator used to measure the inflation rate.
Inflation is a persistent increase in the general price level of goods and services in
the economy.
Inflation is measured using the CPI: an index that measures changes in the prices
of a consumer basket.
2. What is the way suggested by the article in order to take advantage of depreciated
economy? Explain why.
Promote exports and curb imports.
Because exports become cheaper and import become more expensive.
3. List the ways suggested in paragraph 4 to increase Malaysias economy.
Tourism industry must work hard to promote inbound tourism.
Rich Malaysians must spend their money on local products and services.
4. Briefly explain 2 types of inflation.
Demand-Pull inflation
Inflation that caused by increases in aggregate demand
Cots-Push inflation
Inflation that caused by continued decrease in aggregate supply
5. Depreciated currency is the effects the inflation rate. Suggest two (2) measures to reduce
inflation.
Using contractionary monetary policy. To reduce money supply.
Using Open Market Operation (OMO) by selling government bonds and security
in order to increase money supply to control inflation.
Increase the interest rate to discourage banks from excessive lending. This can
increase money supply to control inflation.