1. Michael is looking for work as an internet technology programmer. He has had several job offers, but he has turned them down because he thinks he can find a firm that better matches his tastes and skills. Jonathan is looking for work in a steel mill. Every time he shows up for an interview there are more people looking for work than there are openings. Someone waiting in line with him tells him it has been that way a long time.

Based on the scenario above, discuss and describe the types of unemployment faced by Michael and Jonathan. (8 marks)

2. (i) The market basket used to calculate the consumer price index (CPI) in country Cancer is 4 loaves of bread, 6 gallons of milk, 2 shirts and 2 pants. In year 2018, bread cost RM1 per loaf, milk cost RM1.50 per gallon, shirts cost RM6 each and pants cost RM10 per pair. In year 2019, bread cost RM1.50 per loaf, milk cost RM2 per gallon, shirts cost RM7 each and pants cost RM12 per pair. Assume the year 2018 is base year, what was country Cancer's CPI in year 2019? (5 marks)

(ii) Catherine took a university teaching job as an assistant professor in year 1984 at a salary of RM10,000. By year 2013 she had been promoted to full professor, with a salary of RM50,000. If the price index in year 1984 was 50 and 2013 was 180, what is Catherine's year 2013 salary in 1984 Ringgit Malaysia? (4 marks)

3.Explain how each of the following actions will influence the money supply in an economy:

(i) BNM buys bonds from commercial banks; (2 marks)

(ii) BNM raises the discount rate; (2 marks)

(iii) BNM raises the reserve requirement. (2 marks)