TUTORIAL EXERCISES TOPIC 5

Essay Questions

1. Define a business cycle

2. With the aid of a diagram, explain the phases of a business cycle.

3. Define the meaning of unemployment from economics perspective.

4 Explain the types of unemployment in Malaysia with appropriate example.

5. The government will implement the fiscal policy to control the unemployment in
Malaysia. Briefly explain this policy with suitable example.

6. Define the meaning of inflation and state the types of inflation.

7. The government will curb the inflation using monetary methods. From Malaysian
government point of view, explain this method.

8. Distinguish the government policies to control unemployment and inflation from the
following methods:
a. open market operation
b. interest rate
c. reserve requirement

9. State the unemployment rate formula and give some example.

10. Explain the effect of unemployment in Malaysia.

11. Inflation will affect the consumers’ real disposable personal income and their
expenditure pattern. Explain the following effect of the inflation:
a. distribution income
b. savings
c. production
d. balance of trade