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EC201 Microeconomics Assignment 1 A.L.

Kelebit

(a) What is the issue that you have chosen?


‘A lighter load for parents with kids studying abroad’ is the title of
the issue that I have chosen. I choose this issue because the title is
interesting and it is something that I concerned too. It is written by
Karen Chapman, an article that I cut from ‘The Star’ newspaper
which dated 23rd May 2010. The article is about effect of ringgit
toward Malaysian especially for parents, whose kids is studying
abroad. Some would be affected directly while some would not be
affected at all. For example, those who are affected are S. Siva
Ahnantham and Ben Wong, and those who are not are Wayne Wang
and Law. But the main point is that the ringgit is getting more
stable, and this indicates a stronger Malaysian economy.

(b) Why is it a Microeconomics issue?


The reasons that make it a microeconomics issue because it
discussed about behaviours of buyer and sellers indirectly. I said so
because the effect of ringgit or money currency is because of
buying and selling of stock in global market. Beside, from the
definitions of microeconomics, this article also tells us how
households make decision toward changes in economy and how
they both interact in markets. For example, from the article, those
who are affected have their way of struggling toward the changes in
the currency. Ben Wong and his wife are willing to cut down their
expenses for the sake of their children.

(c) What views have been put forth by the authors?


The views that have been put forth by Chapman are the increase
of strength of ringgit from 2.4 to 3.2 is a beneficial incident toward the
Malaysian economy. This show that Malaysia could be compete again
other countries on the currency changes globally. Moreover, the author
also supports her views by taking example such that this would mean
more jobs for fresh graduates. Chapman also written that a strong ringgit
EC201 Microeconomics Assignment 1 A.L. Kelebit

would definitely bring smiles to parents because this will reduce the high
difference between Malaysian’s
Ringgit and United State’s Dollars. Author also put forth different views of
others toward this issue. This action will balance her article such that
there are positive, negative and also neutral led views.
(d) Which views are normative?
Normative views are those statements which prescribe how the world
should be:
i)‘A strong ringgit will certainly bring smiles to parents who are
paying for their children’s education overseas or planning to
visit them soon’.
This statement is normative because it is explained from the
word ‘will certainly’ which prescribe that if the ringgit is getting
stronger, the world should react in the way that this will bring
good impact to parents whose children studying overseas.
ii) ‘He had estimated that the fees and living expenses would
come up to US$40,000 annually, or RM132, 000 on an
exchange rate of RM3.30 to the dollar.’
Normative view that I can conclude from the statement is that
the word ‘estimated’ which strengthen the reason it is
normative because it explained that impact of living expenses
that should be increasing after the increase of the ringgit
currency.
iii) ‘“For the sake of a good British education for our children, my
wife and I are willing to watch our expenses here and cut down
on luxuries such as eating out,” he says.
Another normative statement here indicates that Ben Wong
and his wife should do this action so that it will benefit their
children whose studying overseas. This claims that attempt to
prescribe how the parents should be.

(e) Which views are positive?


EC201 Microeconomics Assignment 1 A.L. Kelebit

Positive views are those statements which describe the world as it is:
i)‘”I usually send money to my children every three months,” he says,
adding that a 10% fluctuation in the ringgit would not have
much effect.’
This statement is positive because it describes the incident as it
is since it is a fact which show that difference in 10% toward
currency changes would not affect some people especially S.
Siva Ahnantham because he sending the money to his children
every 3 months.
ii) ‘”I was hit more badly last year when my daughter first went to
Australia . Originally the exchange rate was 2.4 but then it went
up to 3.1 within a few months,” shares the father who has
opted to work in Singapore to support his children’s education.
This is positive because it gives bad impact on the father which
this is a fact that had happen between the few months. A shift
in the currency would affect the people especially when the
changes are high.
iii) ‘”The good thing is, this indicates a stronger Malaysian
economy. Hopefully, this will mean more jobs for us fresh
graduated.”’- A statement given by one of the respondent,
David Lim.
Positive view from the statement is that it describe that a
stronger Malaysian economy will directly impact on fresh
graduates which it is a positive impact and a fact that these
people is beneficially success from the economy.

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