BBBE1033 ECONOMICS Question 4 (a) According to the Minister in the Prime Minister's Office, Mustapa Mohamed and the Finance Minister, Tengku Zafrul Aziz, there is no chance of a consistent and robust recovery with a 6% to 7.5% growth for 2021 following the four-stage plan as introduced by the Prime Minister Tan Sri Dato' Haji Mahiaddin bin Md. Yassin. Weak recovery is only possible even if there are significant policies response. Source: Modified from, Casadio, P. & Williams, G. (2021) 'Covid-19 exit plan, tipping into recession', The Sun (No.7802), 17 June [online]. Available at: https://www.thesundaily.my/local/covid-19-exit-plan-tipping-into-recession-YH7977771 (Accessed: 18 June 2021). Propose TWO (2) types of policies that can be used to boost the recovery process. (4 marks) (b) The table below shows the production of Good ABA and Good BAB for Country M and Country N before international trade. Country Country M Country N Good ABA 25 14 Good BAB 17 56 (i) Briefly explain the difference between absolute advantage and comparative advantage (2 marks) (ii) Explain which country has absolute advantage in producing Good ABA and Good BAB, respectively. (4 marks) (iii) Explain which country has comparative advantage in producing Good ABA and Good BAB, respectively. (8 marks) (iv) Predict the trading pattern between Country M and Country N. (2 marks) (c) Given the current account for Country CAP is -RM375 million and capital account is RM240 million with a statistical discrepancy of RM150 million. (i) Distinguish between current account and capital account. (2 marks) (ii) Compute the official reserve balance. (3 marks) [Total: 25 marks]