FACULTY OF BUSINESS AND MANAGEMENT

BACHELOR OF HUMAN RESOURCE MANAGEMENT

COURSE CODE:

ECONOMICS (ECO415)

REPORT TITLE:

ASSIGNMENT 2

PREPARED BY:

MUHAMMAD KHAIRI BIN GHULAM AHMAD

(2022398703)

GROUP CLASS:

NBH3B

DATE: 16th July 2023

 ECONOMICS (ECO415)
ASSIGNMENT 1 (50 MARKS = 30%)
DATE SUBMISSION: 28 MAY 2023

ECONOMICS (ECO415)
ASSIGNMENT 2 (50 MARKS = 20%)
DATE SUBMISSION: 16th JULY 2023
PART A (30 MARKS)
QUESTION 1 (MULTIPLE CHOICE QUESTIONS)
1. Macroeconomics is mostly focused on
A. the individual markets within an economy.
B. the largest industry in the economy.
C. answering the basic economic questions.
D. the economy as a whole.

2. Which of the following is the best measure of the production or output of an economy?
A. Consumer price index.
B. Unemployment rate.
C. Gross domestic product.
D. Inflation rate.

3. Which of the following would be included in the calculation of gross domestic product?
A. Government purchase of a new submarine.
B. Social Security payment to a retired military officer.
C. The purchase of a home built 10 years ago.
D. Contributions to a charity organization.

4. If the price index in a country were 100 for the year 2021 and 120 for 2022 and nominal gross
domestic product in 2022 were $480 billion, then real gross domestic product for 2022 would be
A. about $360 billion.
B. about $380 billion.
C. about $400 billion.
D. about $600 billion.

5. Real gross domestic product is a measure of the

A. average price level in the economy.
B. value of final output produced within a country in one year, using current prices.
C. value of final output produced within a country in one year, adjusted for changing prices.
D. total value of available resources in a nation.

6. Total output produced by Cambodian workers in Malaysia will be included in

A. personal income.
B. GNP.
C. personal disposable income.
D. GDP.
7. National income can be computed through the following approaches except
A. expenditure approach.
B. income approach.
C. profit approach.
D. output approach.

8. Which of the following is the primary use of national income accounts?

A. To analyze the environmental cost of economic growth.
B. To assess the economic efficiency of specific industries in the economy.
C. To measure changes in the value of production and income in the economy.
D. To determine whether there is a fair and equitable distribution of income in the economy.

9. The largest component of the GDP is the

A. net export.
B. government expenditure.
C. personal consumption.
D. gross private domestic investment.

10. Aggregate supply is the total amount

A. of goods and services produced in an economy.
B. of products produced by a given industry.
C. of labor supplied by households.
D. produced by the government.
(1.5 marks X 10 = 15 MARKS)
QUESTION 2 (TRUE (T) or FALSE (F))

1. Economic phenomena such as the rate of unemployment and inflation are studied in microeconomics.
(F)

2. During a recession, the economy often has higher rates of unemployment, whereas during a boom, the
economy often has higher rates of inflation. (T)

3. According to the Keynesians, the government can reduce unemployment through changes in its
spending and taxation policies. (T)

4. Real national product can be defined as the national product valued at current price. (F)

5. A man sells illegal drugs and fails to report his income is an example of underground economy. (T)

6. Gross domestic product is officially measured by adding together the quantity of each good and
service produced by Malaysian. (F)

7. Real and nominal income are different because real income has been adjusted for changes in the price
level. (T)

8. A simple circular flow diagram, households receive income from firm as payment for factors of
production. (T)
9. To calculate the value of Gross National Product at factor cost (GNPfc) based on Gross National
Product at market price (GNPmp), the step needed is minus indirect taxes and add subsidies. (F)

10.Fiscal policy includes the changes in interest rates and the changes in government expenditures. (T)

(1.5 marks X 10 = 15 MARKS)

PART B (20 MARKS)

CASE STUDY

Budget 2023: GDP to grow 4.5% in 2023

PETALING JAYA: The Malaysian economy is projected to grow by 4.5% in 2023, even as the
World Bank warned about the global economy being “perilously close” to falling into recession
this year.

In the first section of the 2023 Economic Report, the Finance Ministry said all economic sectors
are expected to remain in the positive growth trajectory in 2023, driven by the services and
manufacturing sectors. Other sectors, namely agriculture, mining and construction - which
remained below pre-pandemic levels as of 2022 - are also expected to grow further in line with the
improvement in economic activities.

“However, downside risks such as prolonged geopolitical conflict, climate-related disasters and
persistently high inflation are expected to further hamper the global economic growth, hence,
affecting Malaysia's performance.

Overall, the nation’s gross domestic product (GDP) is forecast to grow approximately 4.5% in
2023,” the ministry said. Earlier this month, Bank Negara said the economy could grow by 4% to
5% this year. In 2022, the GDP expanded by 8.7% - the strongest growth since 2000. The growth
in 2023 would be mainly supported by steady domestic demand primarily private expenditure as
well as initiatives under Budget 2023 and development expenditure under the 12th Malaysia Plan
2021-2025.

“However, a slowdown in external demand is expected to moderate exports growth, particularly in

the electrical and electronic products and major commodities,” the Finance Ministry said.

Commenting on the global growth, the Finance Ministry said the world economy is expected to
further soften in 2023 at 2.9%. The global economy would be weighed down by persistent
pressures such as inflation, tightening global financial conditions and economic deceleration
among major economies.

Extracted from The Star Online Feb 24, 2023

a) Based on the article, briefly explain the term Gross Domestic Product (GDP) and three methods of
measuring GDP.
Gross Domestic Product (GDP) is a measure of the total value of goods and services produced
within a country's borders in a given period of time, usually a year. Three methods of measuring
GDP are:
1. Expenditure Approach
2. Income Approach
3. Production Approach

(4 marks)

b) List four (4) sectors which will expect to contribute a positive growth in 2023.
1. Services sector
2. Manufacturing sector
3. Agriculture sector
4. Mining and construction sectors
(4 marks)
c) Discuss two (2) global problems expected to have effect on Malaysia's performance.
1. Climate-related disasters
2. Prolonged geopolitical conflict
(4 marks)

d) Explain the main government expenditure which would lead to a forecasted growth of approximately
4.5% in 2023.
1. Development expenditure under the 12th Malaysia Plan 2021-2025
2. Budget 2023 initiatives
(4 marks)
e) “However, a slowdown in external demand is expected to moderate exports growth,
particularly in the electrical and electronic products and major commodities,” the Finance
Ministry said. Explain how exports growth may result with lower GDP.
Export growth can result in lower GDP Reduced production and employment When exports
decline, businesses may need to reduce production levels to keep up with lower demand. This can
result in reduced employment opportunities and lower wages in export-oriented industries.
(4 marks)

END OF QUESTIONS