COLLEGE OF BUSINESS MANAGEMENT AND ACCOUNTING

SULTAN HAJI AHMAD SHAH CAMPUS

INDIVIDUAL ASSIGNMENT

INTERIM SEMESTER 2020/2021

PROGRAMME : BFIN (HONS)

SUBJECT CODE : ECMB313

SUBJECT : MALAYSIAN ECONOMY

DATE : AUGUST 2020

DURATION : 2 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of TWO (2) questions.

2. Answer ALL questions.

3. ALL answers must be written on a sheet of paper.

4. Each answer for every question must start on a new page.

5. SUBMIT your answers as per instructed by your lecturer.

THIS EXAMINATION BOOKLET CONTAINS 5 PAGES INCLUDING THE COVER PAGE

Page 1 of 5
 ECMB313 Interim Semester 2020/2021

QUESTION 1 [20 Marks]

Based on the article below, answer the following questions.

FDI into Malaysia rises to RM31.7bil

Friday, 12 Jun 2020

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin (pic below) said the encouraging performances in
both FDI and DIA showed the country’s favourable economic situation that attracted foreign companies
to continue investing, and similarly, for local companies to expand and diversify their activities abroad.

PETALING JAYA: Foreign direct investment (FDI) into Malaysia in 2019 rose 3.1% to
RM31.7bil from RM30.70bil in 2018, the Statistics Department reported.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin (pic below) said the encouraging
performances in both FDI and DIA showed the country’s favourable economic situation that
attracted foreign companies to continue investing, and similarly, for local companies to expand
and diversify their activities abroad.

“The higher FDI was mainly due to injection of equity from Japan to Malaysia, precisely, in

Page 2 of 5
 ECMB313 Interim Semester 2020/2021

health activity. The foreign inflows were mainly channeled into the services sector, particularly
in health, real estate and financial activities, ” he said in a statement yesterday.

Mohd Uzir said the manufacturing sector was the second highest, mainly in the form of debt
instruments and equity in refined petroleum and electric and electronic products, followed by the
mining and quarrying sector.

Major contributors by country for FDI flows in 2019 were Japan, Hong Kong and the
Netherlands.

Source: https://www.thestar.com.my/business/business-news/2020/06/12/fdi-into-malaysia-rises-to-
rm317bil

Required:

(a) What do you understand by foreign direct investment and international trade?
[4 marks]

(b) Why do countries engaged in international trade?

[6 marks]

(c) What are TWO (2) advantages and disadvantages of foreign direct investment (FDI) to
Malaysia economy?
[4 marks]

(d) Based on the article above, discuss why foreign direct investment (FDI) to Malaysia rises.
[6 marks]

Page 3 of 5
 ECMB313 Interim Semester 2020/2021

QUESTION 2 [20 Marks]

Based on the article below, answer the following questions.

Statistics Dept: Malaysia’s new poverty line income is RM2,208,

over 400k households considered poor
Friday, 10 Jul 2020 04:09 PM MYT

In announcing the new national poverty line income (PLI), Malaysia’s chief statistician Datuk Seri Mohd
Uzir Mahidin explained that the new figure was obtained based on changes in methodology that now
emphasised healthy eating and quality basic needs. ― Picture by Hari Anggara

KUALA LUMPUR, July 10 — Malaysia revised the national poverty line income from RM980
to RM2,208, which means that over 400,000 households in the country with monthly incomes
below this level were considered poor in 2019, the Department of Statistics Malaysia (DOSM)
revealed today.

Based on the new poverty line income, DOSM said Malaysia’s poverty levels have fallen in
2019, when compared to the last available figures in 2016.

Page 4 of 5
 ECMB313 Interim Semester 2020/2021

In announcing the new national poverty line income (PLI), Malaysia’s chief statistician Datuk
Seri Mohd Uzir Mahidin explained that the new figure was obtained based on changes in
methodology that now emphasised healthy eating and quality basic needs.

He said the DOSM worked with various stakeholders including the Health Ministry to revise the
national PLI, following the 11th Malaysia Plan’s launch where it was stated that there was a need
for Malaysia to review its poverty level indicator.

The previous 2005 methodology, which determined the national PLI of RM980, was based on
the minimum food requirements of each household member and 106 non-food items based on the
spending patterns of the country’s bottom 20 per cent group (B20) in the 2004/2005 household
expenditure survey.

Source:https://www.malaymail.com/news/malaysia/2020/07/10/statistics-dept-malaysias-new-
poverty-line-income-is-rm2208-over-400k-house/1883285

Required:

(a) What do you understand by poverty line income and what is poverty line income in
Malaysia?
[4 marks]

(b) Based on article above, what is the main purpose of government increase the poverty line
income in Malaysia?
[2 marks]

(c) List down TWO (2) causes the cost of living to increase and how does Malaysia resident
can reduce their cost of living in urban area?
[8 marks]

(d) What are THREE (3) possible effects of a rise in cost of living to society?
[6 marks]

-END OF QUESTION PAPER-

NZR

Page 5 of 5