Question
Question 2 The primary goal of effective macroeconomic policies is to reduce uncertainty and risk in economic decision-making and maintain healthy levels of economic growth
Question 2
The primary goal of effective macroeconomic policies is to reduce uncertainty and risk in
economic decision-making and maintain healthy levels of economic growth and minimize
price changes.
What would be the response by the government for the following events and
why?
a) In March 2021, the inflation rate for Malaysia was 1.7 %. The inflation rate of Malaysia
increased from -2.9 % in April 2020 to 1.7 % in March 2021 growing at an average
annual rate of 149.69%. (3 Marks)
b) The labour market is expected to remain pressured in the near term on the back of
surging COVID-19 cases and the reimposition of nationwide Movement Control Order
(MCO 3.0). (3 Marks)
c) The survey shows that 84.5% of small and medium enterprises (SMEs) will be
significantly affected by MCO 3.0. If the same type of measures that were enacted during
MCO1.0 are exacted in MCO 3.0, more than 40% of SMEs will be in dire financial straits
and two million jobs will be lost. (3 Marks)
d) Many small and medium enterprises (SMEs) proprietors have long stopped taking
salaries, curtailed operating expenditure and reduced staff to the minimum to ensure
their survival. (3 Marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started