CBEB1108: MANAGERIAL ECONOMICS (SEM 1, 2010/2011)
PART I: DIVISION OF MARKS:
50% Final Exam
-
Essay type questions
15% Mid Semester Exam
-
Multiple choice questions
20% Group Assignment (group of 4’s)
-
As described below in Part III
10% Group Tutorial Presentation
-
Questions to be announced the week before the presentation
5% Class Participation
-
Contributing to the discussion of tutorial questions
-
Asking questions to the other groups during their presentation
PART II: CLASS SCHEDULE
Date
12/9
19/7
26/7
Lecture
Topic covered
References
1
Economics: Foundations and models
Ch1, H&O
2
Trade-offs, comparative advantage,
and the market system
Ch2, H&O
3
4
2/8
5
9/8
6
16/8
7
23/8
30/9
8
Prices: Interaction of demand and
supply
Ch3, H&O
Ch1 & 2
GDP: Measuring total production and
income
Ch7, H&O
Ch3
Unemployment and inflation
Ch8, H&O
Ch7
The Economic growth, financial
system & business cycles
Ch9, H&O
Ch8
Long-run economic growth
Ch10, H&O
Ch9
Aggregate demand and Aggregate
supply analysis
Ch12, H&O
Ch10
6/9
13/9
20/9
9
18/10
25/10
Group 1
Group 2
Money, and the bank system
Ch13, H&O
Ch12
Monetary policy
Ch14, H&O
Ch13
Fiscal Policy
Ch15, H&O
Ch14
Group 4
12
Inflation, Unemployment, and Federal
Reserve Policy
Ch16, H&O
Ch15
Group 5
13
Macroeconomics in an open Economy
International Financial System
Ch 17 & 18,
H&O
CH13
10
11/10
Presentation
MID SEM BREAK
MID SEM BREAK
27/9
4/10
Tutorial
11
14
Revision
Ch17&18
Group 3
PART III:
ASSIGNMENT TOPICS
The purpose of this assignment is to expose you to reading and understanding national economic
reports and to writing an academic report. The assignment requires you to do some research on the
statistics of the Malaysian economy. Apart from that, each question requires you to cover some
theoretical parts on the topic which may be found in textbooks and other similar references. You are
encouraged to express your own opinions – do not be too concerned whether it is wrong or right, but
your opinions must be carefully explained. To assist you in the assignment, you may refer to OFFICIAL &
RELIABLE sources from the web such as the Bank Negara Malaysia website and the Department of
Statistics of Malaysia website (websites such as Wikipedia are not considered reliable). Please cite your
sources within the report, and also, list down all your references at the end of the report. The maximum
length of the report is 20 pages (font size: 12, spacing: 1.5).
Topic 1 – Consumer Price Index (Group 1)
Name three (3) types of price indices. What are the differences amongst each? Are there weaknesses or
benefits of using each?
Why is it important to accurately measure price increase?
What are the components of consumer products to compute the CPI for Malaysia in the current year?
Have there been changes over the years in these components?
Are there any potential problems in relying solely on the CPI to measure inflation? What are they?
Draw a graph showing the CPI for Malaysia for a period of the last 20 years. Comment and elaborate on
the trend. Were there periods of unusual pattern? What was the base year used to calculate CPI in
Malaysia?
Topic 2 – Savings (Group 2)
Define the terms saving and investment. Carefully describe some activities that can accurately be
described as saving or investment. Is putting money in the stock market saving or investment? Explain.
Why does the saving curve slope upward? What does this imply about the relative strength of the
substitution effect versus income effect when the real interest rate changes?
What is the importance of savings in an economy? How can policymakers of a nation encourage savings?
Plot a graph showing Malaysian savings (in nominal terms) for the past 20 years/ Comment and
elaborate on your observations. What contributed to this savings pattern?
How does the banking and insurance industry contribute toward national savings?
Topic 3 – GDP (Group 3)
Define Gross Domestic Product (GDP). What is the difference between real and nominal GDP? Which do
economists use as an indication of an economy’s well-being? Why? Can an economy have an increase in
GDP and yet have negative growth at the same time? How can that be possible?
Why is it desirable for a country to have a large GDP? Give an example of something that would raise
GDP and yet be undesirable?
Explain the concept of chain-weighted real GDP. What are the problems in using this method?
Draw a graph of nominal and real GDP for Malaysia for the past 20 years. What can you observe about
the patterns? Give your comments. Were there any unusual patterns that you notice? What were the
factors that influenced this pattern of GDP?
Elaborate on the components of expenditure that contributed significantly towards the Malaysian GDP.
Topic 4 – Interest Rates (Group 4)
What determines interest rates in an economy?
Draw a graph of (i) savings deposit rate and (ii) base lending rate for the past 20 years in Malaysia.
Comment on the trend.
What is the average savings and lending rate over this period? Were there significant events that
occurred that influenced the movements of these interest rates?
Draw a graph showing Gross National Savings in Malaysia for the past 20 years/
Is there any obvious relationship between the amount of Gross National Savings and the savings deposit
rates during this time frame?
Topic 5 – Open Economy (Group 5)
What are Malaysia’s main imports and exports? Illustrate the components of Malaysia’s imports and
exports using a graph or chart and elaborate on it. Which countries are Malaysia’s main trading
partners?
Compare these components with the components of imports and exports twenty years ago. What are
the changes? Elaborate clearly.
What are the benefits of engaging in international trading? Are there disadvantages as well?
Define foreign direct investment (FDI). What are some of the policies and incentives provided by the
local government to boost FDI in Malaysia?
Topic 6 – Inflation and Unemployment (group 6)
Explain what a Phillips curve is. How did it originate? Does it hold true?
Gather data on inflation and unemployment in Malaysia for the past 20 years. Using this data, draw a
Phillips curve for Malaysia. What can you observe? Were there unusual patterns? If so, were there any
particular factors contributing to these patterns?
Do you think that the Phillips curve for Malaysia hold true as per theory?
Define structural and cyclical unemployment. Give examples of each.
Discuss strategies how the government could reduce unemployment in or among (i) depressed
industries (ii) unskilled workers (iii) depressed geographical regions and (iv) teenagers. Include
comments on the type of unemployment you would expect to see in these groups, as well as on the
relative duration of unemployment spells that should exist among these groups.