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The University Economics Name of the Student Name

   

Added on  2020-03-16

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Running head: ECONOMICSEconomicsName of the StudentName of the UniversityAuthors NoteCourse ID

ECONOMICS1Table of ContentsPart A:........................................................................................................................................2Answer to question 1:.................................................................................................................2Answer to question 2:.................................................................................................................3Answer to question 3:.................................................................................................................4Answer to question 4:.................................................................................................................5Part B:.........................................................................................................................................6Answer to 1:...............................................................................................................................6Answer to question B:................................................................................................................7Part C:.........................................................................................................................................9Answer to A:..............................................................................................................................9Answer to question B:................................................................................................................9Reference List:.........................................................................................................................11

ECONOMICS2Part A:Answer to question 1: For Malaysian economy trade forms a sizeable part of the output as over the lastfifteen years the exports of products and services averages greater than 100% of the GDPwhich ultimately results in sustained trade surplus (Taussig and William 2013). This cushionof overseas reserves has enabled the government to run continuous budget deficits bysimultaneously maintaining a current account surplus. Nevertheless, being Malaysia anexport concerned economy, it is has transformed from excessively dependent on the electricaland electrical products chain to hydrocarbon concentrated industries with mix of productswhich is exported by Malaysia has turned out to be more volatile, resulting the nation tointernational market sentiments. The electric and electrical products have continued to contribute a significant portionof the total amount of exports for Malaysia, however in the recent decade there has been alarger divergence in the structure of the export products (Sloman et al. 2013). In the recentyears there has been an increase in the share of non-electrical and electric production withexports rising from 23.4% to 33.8%. During that same time, the portion of commodities inthe total amount of exports has augmented from 13.3% to 22.2%. Electrical and non-electrical products have from a very long time been the heart of the nation strategy of tradewith the bellwether segment rising increasing to highest during the year 2000, when it onlycomprised of only 60% of the total amount of exports (Bernanke et al. 2015). Ever sincethen, there has been a steady decline in the relative terms of the electrical and electric trade,which ultimately fell to one third of the entire export over the last four years. There has been a remarkable growth in the natural gas industry with the commodityhas comprised of marginally over M$ 13bn or 3% of the overall export. However, Malaysia

ECONOMICS3has now become the world’s second largest exporter of the LNG behind the nation of Qatarwith trade export aggregating over M$ 64bn in the year 2014 with over 8% of overall exports(Frank and Robert 2014). The spectacular rise in the trade of LNG together with the rise inthe petroleum other reliant sectors in Malaysia such as plastics and chemicals has increasedthe share of trade directly associated to carbons to approximately 30% of the overall exportfrom merely 13% in the year 2000. This ultimately makes the sector nearly as important asthe electronic and electrical segment. Such compositional shift in the exports replicates numerous factors. One of the primereason for the change in the export of Malaysia is because of the rising international demandfor the raw supplies. As evident from the wealth of the Malaysia in the natural resources suchas in agriculture and mining, the country is nicely placed to gain from the rising internationaldemand for raw supplies especially in the rising economies of Asia (Laibson et al. 2014).This has ultimately resulted in increasing share of commodity export of Malaysia in therecent decade with additional main commodities such as palm oil, liquefied natural gas, crudeoil and natural rubber comprises for large amount of the rise in the segment of the supplies inthe gross export throughout that period. Answer to question 2: The declining ringgit or instead an increase in the US dollar against the rest of theworld’s currencies has bought forward mixed amount of fortune for the local economy.Relating to such weakening of currencies organizations that generate their sales locally ordomestically with imported intermediate materials would be considered to be hit in a worsemanner from the weakening ringgit (Sunley 2017). The reason behind this is that they wouldhave to pay for their costs in the US Dollar and sell under the domestic currency. Eventhough they are hedged once the safety hedge expires it will return back to the actuality onceagain. On the other hand, if the ringgit continuous to remain weak or weakened further there

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