24 Aug 2016 . Wed . 9am . Econ : Tuiorial

19:08 Unknown 0 Comments

Case Study

The condominium price at 2013 was RM 300k in township, but 2 year later it is increase by 30%. Kindly explain the issue in term of inflation, what are the cause and what are the solution to reduce inflation?

Answer

What is Inflation

• general increase of price in the basket of goods  
• CPI consumer Produce Index.

Cause / Issues of Inflation

 Cost push and demand pull

Goverment ( Cost Push inflation )

• 6% GST 
• Policy
• 
  

Developer ( Cost Push )

•  production of cost material
• high labor cost - minimum wages
• increase in raw material
• increase the demand in the township

Buyer ( Demand pull )

• increase population
• high demand low supply
• worry about 6% GST  
• 
  

Natural ( Cost push )

•  Land shortage
•  

Demand-Pull Inflation and Cost-Push Inflation. Both types of inflation cause an increase in the overall price level within an economy





Remedies to reduce inflation

Fiscal policy
tax - increase tax - impose tax RPGT
gov spending - reduce

monetery policy ( expand or contract )
money supply - central bank - hard to control
interst rate - increase the rate - saving and borrowing

direct measure
subsidies price of certain product
during CNY / Raya


Solutions

1. Build the satelite township

Characteristic of money and types of monetary policy


durabiliyt
portabality
diversibility - smaller notes, match the value
 scarcity -

(stick to the note will give you good answer )

type
contractionary - increase the
expansionary - reduce interste rate , easy to borrow and spend money, print more money

(stick to the note will give you good answer )



Unemployment can be caused by many reasons, kindly explain

• effects of the unemployment in the different aspects
• measures to reduce the unemployment rate

 defination of unemployment

2 effect - social and economic effect

social - increase the crime rate
economic -

measure to reduce the unemployment rate
fiscal policy - implement program

direct measurement
increase job vacancy
own business
(stick to the note will give you good answer )

Kindly explain motives of money demand, what is the roles of Federal Reserve Bank in USA?

Motive of money demand
money demand
precautionary demand
speculative motive demand

role
issue notes /
manage payment
debot
supervise
transfer
resou
reserve