BACHELOR OF BUSINESS ADMINISTRATION WITH HONOURS

JANUARY/2022

BBEK4203

PRINCIPLES OF MACROECONOMICS

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LEARNING CENTRE : KOTA BHARU LEARNING CENTRE

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PART I
1. Introduction
The definition of macroeconomic trends varies widely among different sources, but the
following examples should provide a basic understanding. A microeconomic model looks at
the actions of individual workers, households, and businesses. Macroeconomics focuses on
the economy as a whole, examining the effects of large-scale economic changes. It also
examines the interaction between a country's government, business, and households. In this
article, we will discuss the difference between micro and macroeconomics.
The term microeconomics refers to the study of individual actors within an economy. The
discipline focuses on the behavior of large sectors of the economy, such as industries,
companies, and individuals. A microeconomic model focuses on the interactions of these
actors. In contrast, a macroeconomic model looks at how these factors affect the overall
economy. A proper macroeconomic strategy is essential for poverty reduction and social
equity. But, it is not enough to address the problem of poverty alone. The rate of per capita
income growth in poorer countries is still far behind that of richer countries.
A macroeconomic model focuses on how large economic sectors affect each other. This
type of analysis enables economists to look at the big picture. Macroeconomics focuses on
the effects of major decisions on the economy as a whole. It can help businesses and
investors make better decisions.
Macroeconomics focuses on the general economy. A microeconomic model focuses on
the individual actors in an economy. An example of an economy that is dominated by a few
small firms will be a small business. A macroeconomic model that includes a variety of
factors will produce the greatest possible economic impact. Moreover, it will show us how to
make decisions that affect the entire economy. So, a macroeconomic model should be based
on the overall economy, not just the individual actor.
A macroeconomic model is a framework for analyzing the behavior of an economy. It is
important to remember that the prices of goods and services are determined by the cost of
production. Likewise, a macroeconomic model is used to analyze the impact of these factors
on the economy's overall economic health. A microeconomic model will focus on the
individual behavior of individual agents and will be a more detailed study of the larger
structure of an economy.
A macroeconomic model focuses on the factors that affect an economy, such as the
supply of labor and the price of goods and services. A microeconomic model is based on the

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costs of production and the costs of raw materials. The goal of a macroeconomic model is to
improve the functioning of an economy. This means that the definition of macroeconomics
will be different for different countries. However, they should both be used to describe the
same economic system.
A macroeconomic model is a model where the forces that drive economic growth and
employment are taken into consideration. In contrast, a microeconomic model is a model that
looks at the behavior of individual actors in an economy. It focuses on the choices of these
actors and the interrelationships of these actors. The two models are very different, and the
definition of macroeconomics should reflect these differences.
In macroeconomics, the costs of production and the prices of goods and services are
examined. In labor economics, the focus is on the patterns of wages and salaries. The latter is
concerned with the analysis of the economy's overall performance. Ultimately, a
macroeconomic model is the best way to understand the impact of changes in the economy. A
well-developed economy can benefit from monetary and fiscal policies, while a weak
economy can be weakened by them.
A macroeconomic model also examines the behavior of a country's economy. While
microeconomic models are based on individual decisions, macroeconomic models focus on
the economy as a whole. The macroeconomic model is the most comprehensive and detailed
description of economics. A microeconomic theory begins with a simple mathematical
model. Then, it moves to a more abstract and sophisticated system that is based on empirical
evidence. If a macroeconomic theory is used, it is referred to as a "macroeconomic policy."

2. Current macroeconomic problems in United States

As the population of the United States continues to age, one microeconomic problem
has arisen: how to provide for the aging population? Many economists believe that we should
work together to minimize costs and maximize efficiency. As Americans are feeling uneasy
due to the recent outbreak of the flu virus, they are cutting back on certain goods, and
increasing their emergency savings. But what can we do to address the aging population? The
first step is to educate ourselves on this issue.
The microeconomic problem of inequality affects everyone, not just the rich. Every
household must set a budget that will provide the right mix of goods and services for the
family. It is up to individuals to make decisions about what they spend their money on. A

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budget will help people decide what they want to buy, whether they should work full-time or
part-time, how much to save for the future, and how much to spend beyond their means.
The United States has a large, unrelenting microeconomic problem. This country has
historically had a low interest rate, which limits the potency of the Federal Reserve's
monetary stimulus. So, to ignite economic activity, the federal government needs to provide
fiscal stimulus. While we cannot change the behavior of our government, we can change the
laws that govern it. The first step is to make our budgets more realistic.
Consumers' consumption binge is a contributor to the low level of personal savings.
In normal times, market forces would increase the price of consumable goods. But the
situation in the past few years has been different. Some groups, such as the wealthy, are
willing to trade in American seed stocks. Others are willing to finance our federal budget
deficits. And with higher mortgages and dollar values, our consumption binge is reducing.
Microeconomics focuses on the behavior of individual agents. It identifies the right
combination of goods and services to provide for the family. In the United States, people also
decide to work full-time or part-time, whether to save for the future, and whether to spend
beyond their current means. A person's behavior is based on their budget and their choices. If
he or she is working, they are making decisions that will maximize their net utility.
Consumers are the most significant group of people in the economy. They determine
how much food they eat and how much money they spend. Their decisions are often driven
by their individual needs. In the United States, the five largest companies in the world have
$504 billion in cash reserves. Yet many people live in poverty. The lack of sufficient food is
a microeconomic problem. Insufficient resources lead to an inefficient economy. If this
happens, the nation's economic growth will decrease.
The theory of the firm is another type of economic theory. This theory examines the
behavior of businesses and people in the market. This theory states that the goal of people in
the market is to maximize their utility and minimize their costs. They should avoid
regulations that limit the free flow of money. This would increase their productivity. If they
have to borrow money, they should be able to borrow it. They will have to pay for it, but this
is not enough to sustain their livelihood.
While China is not the only investor in the United States, it is the dominant one. In the
long run, this will lead to a more equitable society. However, China will always be the
biggest investor in the world. Aside from this, the United States has a savings glut. The

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booming economy has been a great example of capitalism. Its policies should help to promote
economic growth by improving the lives of all people.
Lastly, a microeconomic problem exists in the United States. People in the U.S.
typically expect the government to take care of their economic problems. This is the case for
a consumer's budget. If he or she isn't satisfied with the choices available, it will be hard to
live within his or her means. While the demand for goods and services in the marketplace is
increasing, the supply of these goods is declining. The price of goods increases, and the price
of homes goes down.

3. United States use macroeconomic policies to mitigate the macroeconomic problems

In order to keep the economy humming, the United States must use macroeconomic
policies to mitigate the impact of recession. The first step in this process is to protect
households, which are the foundation of the economy. By reducing the negative impacts of
economic downturns, the government can support consumption, which is the main pillar of
the economy. Once this is done, the government must implement the second step: rebalancing
the economy.
In the meantime, the flu virus and a sudden slowdown in activity are making
Americans uneasy about their finances. Some are considering cutting back on some goods,
while others are boosting their emergency savings. The most effective policy is a
combination of both. As long as the government focuses on solving these problems, the
economy will recover quickly. This will help the United States mitigate the risks of future
crises and boost the economy.
Another way to fight the economic consequences of global instability is through the
use of fiscal policy. Many countries use fiscal policy to address these problems. The short-
term objectives may be macroeconomic stabilization, expanding spending, fighting inflation,
and reducing external vulnerabilities. In the longer term, the objectives may include
education and infrastructure development. The relative importance of these objectives will
depend on the circumstances of each country. And the policy should aim to reduce these
risks.
A sudden stop in the economy can expose structural weaknesses. A rational response
can minimize the risks and ensure a quick recovery. Andres Vinelli, vice president for
Economic Policy at the American Progress Foundation, and Christian E. Weller, a senior
fellow at the American Progress Foundation, are writing the paper. Their research is

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published in the journal Macroeconomic Policy. These authors discuss the policy options in
the context of these challenges.

The global crisis had its origins in the mortgage market meltdown in 2007. The
collapse in the mortgage market affected many economies worldwide. In addition, financial
sector difficulties adversely affected private consumption and investment, as well as
international trade. In response, governments used fiscal stimulus to help stabilize the
economy. Automatic stabilizers go into effect automatically when tax revenues change. But
fiscal policies are less effective if they create unequal conditions in the economy.
Inflation is one of the key causes of economic declines. Inflation increases the costs of
goods, which are essential to the economy. Inflation is an economic phenomenon that has
both positive and negative effects. Inflation can be beneficial for the economy, but it can also
increase the cost of commodities and services. The rise of food prices is one of the most
recent challenges to the global economy, and it is not yet clear whether the world's population
can adapt to it.
A sudden drop in economic activity may expose structural vulnerabilities. But an
intelligent response to these problems can help the economy recover faster and minimize the
impact of a global crisis. By following the three steps outlined above, the United States will
be able to maintain its economic growth and avoid deep and prolonged recessions. If the
economy is not prepared to face these risks, it will be harder for it to cope with a global crisis.
In addition to these actions, the U.S. government should use macroeconomic policies
to manage a global crisis. The virus, which is responsible for COVID-19, has already spread
across the globe. By limiting exports, the U.S. government can ensure that it does not suffer a
major economic crisis. In addition, the United States government can increase its exports and
imports, which will benefit its citizens and the economy.
In addition to these measures, the U.S. government can implement macroeconomic
policies that reduce the impact of a global crisis. These policies should address the effects of
a crisis, such as a global outbreak. It is also important to implement other strategies to help
the economy recover. The United States is currently experiencing a large economic
disruption due to the outbreak of the virus, which could potentially cause the economy to
suffer.

4. Conclusion.

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 The U.S. government has made significant progress in improving macroeconomic
indicators during this pandemic. Although the virus itself has killed more than 50,000
Americans, the resulting impact on the nation's economy has been devastating. To estimate
the impact of this crisis, the difference between the expected mortality and the actual
mortality of the population is calculated. This number is then divided by the employment to
population ratio. The unemployment rate is a measure of how many people are working full
time.
The COVID-19 pandemic has wreaked havoc on the economy, resulting in a massive
loss of life. However, the economic impact of this crisis is still unknown. It is impossible to
predict the economic impacts of the virus, but the following calculations should help
determine the necessary steps to take. After all, the cost of the epidemic will be borne by the
nation's consumers.
In conclusion, the COVID-19 pandemic offers four key lessons for economic
policymakers. The characteristics of the outbreak are unique, and the response to it is
different from past recessions. Yet, it is similar in that good policies are never implemented.
The problem lies in the poor administration of the program, and the lack of coordination
among the policymakers. Moreover, there is a need to modernize the frameworks and tools of
macroeconomics, which can only be achieved through collaboration and introspection.
The COVID-19 pandemic has thrown global economics into chaos. It has shut down
major sectors of the economy, including the United States. In contrast, the OECD forecasts
that the US will experience a deep recession are comparable to those for the previous two
years. As a result, there is no single clear economic policy that will address the underlying
causes of the pandemic and its consequences.
Assuming that the effects of the pandemic are similar to past recessions, there is little
reason to worry. Despite the fact that the effects of the pandemic are different than those of
previous recessions, there are commonalities between the two. For instance, the global
economy will need to continue to improve the policies that it has already implemented to help
those affected by the virus. There are several policies that will be required to address the
lingering challenges of the pandemic, including improving its macroeconomic framework.
The impact of the pandemic on the economy is similar to that of past recessions. The
COVID-19 virus has not only impacted the health of millions of people, but it has also had a
profound impact on the economy. The COVID-19 pandemic's effect on the US economy is

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not only catastrophic, but it is a significant shock for the nation. The US is one of the only
countries where the disease has affected a high level of economic output.
In addition to addressing the immediate health needs of the poor, macroeconomic
policies should focus on the needs of low-income workers. These are the people who will be
affected by the disease, and the government should prioritize their needs in a pandemic
situation. Informed decisions will help protect the population and maintain the economy.
When the vaccine is widely administered, the United States will be able to withstand the
effects of the virus.
While the COVID-19 pandemic is unique, the economic policies implemented to deal
with it are similar. The government must make sure that its economic policy responds to the
needs of the country. The policies must also be designed in a way that ensures the best long-
term outcomes. There are several ways to implement policies that will address the pandemic.
A policy that promotes equity and social justice will help the country recover.
2662 words

5. References.

5.1. Acemoglu, D., S. Johnson, J.A. Robinson, and Y. Thaicharoen. 2003. “Institutional
Causes,Macroeconomics Symptoms: Volatility, Crises, andGrowth.” Journal of
Monetary Economics 50(1):49–122.
5.2. Aguiar, G., and M. Gopinath. 2007. “Emerging Market Business Cycles: The Cycle
is the Trend.”Journal of Political Economy 115(1):69–102.
5.3. Aizenman, J. 2006. “International Reserves Management andthe Current Account.”
University ofCalifornia, Santa Cruz, Department of Economics. Santa Cruz, Calif.
5.4. Athanasoulis, S., and E. van Wincoop. 2000. “Growth Uncertainty and Risk-
Sharing.” Journal of Monetary Economics 45(3):477–505
5.5. Bergoeing, R., N. Loayza, and A. Repetto. 2004. “Slow Recoveries.” Journal of
Development Economics 75(2):403–506.

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PART II.

1. The outlook of the world’s economy after COVID-19 pandemic

The latest McKinsey survey shows an uptick in confidence in the world's economy after
the COVID-19 pandemic. Executives report that conditions are more likely to improve six
months from now, while only 30 percent expect them to worsen. Overall, executives'
confidence in the world's economy rose, but the decline in global economic growth has
stymied their expectations.

Figure 1
The latest McKinsey
survey
In the survey, the COVID-19 pandemic looms large as a risk for economic growth,
followed by unemployment and domestic political tensions. These three risks are the most
common in all regions except for Latin America and India. The most significant challenges
for the world economy after the COVID-19 pandemic are inflation and terrorism. Companies
in these regions are more likely to mention these threats than those in Europe and North
America.
Despite the threat of a second COVID-19 variant, the world economy is expected to
recover by 2020. In the medium term, the world economy is expected to grow at 5.5%,
although some countries will remain below their pre-virus baselines. The extent of the losses
varies across countries, with the most severe losses seen in low- and emerging market

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economies. The United States, however, has recovered from the worst downturn since the
Great Depression and is on course for a recovery. The euro zone is expected to return to pre-
pandemic levels in the next few years.
The outlook for the world's economy is not bad. Recent vaccine approvals increase
the hope of a global turnaround later this year. However, the renewed waves of the virus and
the introduction of new variants of the disease raise concerns about the global economy.
Furthermore, the global economy is projected to grow at a rate of 5.5% in 2021, with the
potential to increase at 4.2% by 2022.
The rapid spread of the COVID-19 variant has slowed the recovery process and has
slowed the pace of economic growth. While some countries have remained in full growth,
others may experience a temporary dip in GDP. The CDC says it is a temporary effect, but
the global economy will still grow at 5.5% by 2021. The World Bank forecast for the next
two years is positive, and the outlook for the next decade is bleak.
The outlook for the world's economy has improved since the COVID-19 pandemic hit
in May. The average global economy is projected to recover at a rate of 4.5% this year, but it
will still be below its pre-virus baseline by 2021. The impact on individual countries'
economies is different, but the overall picture remains positive. The recent approval of
vaccines is encouraging. The world's economic health will improve in 2021, but this does not
mean that the virus won't return, however.
The outlook of the worlds economy after COVID-19 is positive. It is expected to
return to its pre-pandemic level in 2022. The World Economic Outlook will be released a
week after the outbreak. The report will incorporate the COVID-19 pandemic and the effects
of the virus. The World's economy will grow by 5.5% this year and 4.2% in 2021. The
impacts of the COVID-19 are largely concentrated in developing and low-income countries.
The recent approval of vaccines has raised hopes for a turnaround of the pandemic
later this year. However, the virus has returned with new and unidentified variants, posing a
risk for the outlook. The World Bank also predicts that the worlds economy will grow by
5.5% in 2021, but with rising inequality and the recurrence of the COVID-19 virus, the
recovery will be slower.
The impact of the COVID-19 pandemic on global economic growth is relatively low
in the short-term, but the consequences in the medium-term are significant. While the overall
global economy is likely to recover this year, the effects will remain high until 2021. In the
meantime, the effects of the virus will continue to negatively affect many countries. The EU,

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2. How does the world’s economy affect Malaysia’s economy during the COVID-19
pandemic?
A resurgence of COVID-19 cases has occurred in Malaysia, with most cases being of
the highly transmissible Omicron variant. Despite this, the government of Malaysia has
pledged not to re-impose lockdowns. More than three quarters of the country's citizens have
been immunized with the COVID-19 vaccine. By March 1, 2020, mandatory quarantine for
inbound travelers will be lifted.
The economic impact of COVID-19 will depend on the government's measures to
support private sector activity. The depleted fiscal space will limit public investment-led
expansion and reduce exports. This means that incremental growth will depend less on factor
accumulation and more on productivity. With the country's low productivity growth,
Malaysia's development path will rely more on raising labor and capital inputs.
While income inequality in Malaysia is high relative to other East Asian countries, it
is reducing. Despite the reduction, the absolute gap between the poor and the rich has grown.
Throughout the past decade, the government has been moving toward more targeted
measures to support the poor. These measures have included cash transfers to low-income
households. During the COVID-19, however, this approach has led to an increase in
corruption and increased vulnerability among low-income households.
Despite the global economic climate, the country's near-term economic outlook is still
largely dependent on the government's measures to sustain private sector activity. With no
room for expansion from public investment, incremental growth will have to rely more on
increasing productivity. While the government's policies aimed at boosting the poorest 40
percent of the population are important, these policies will be crucial for maintaining
Malaysia's development trajectory in the near future.
Despite the global economic slowdown, Malaysia’s income inequality is high
compared to other East Asian economies, but it has decreased relative to other countries.
Although Malaysia's income gap has increased, the absolute gap between low-income and
high-income households has shrunk to just over 50%. The government's efforts to support the

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poor have been ineffective in raising productivity. In the near term, these measures have had
little effect.
Since the COVID-19 pandemic, Malaysia's economy has seen a massive increase in
unemployment and poverty. Almost 40 percent of households live below the national poverty
line. The government's focus on improving the lives of these people remains paramount. The
government is taking steps to increase the level of economic prosperity for the poorest forty
percent of its population. While the government's economic growth is strong, the government
is still facing challenges. Currently, the country's economy is experiencing a 4% decline
annually.
With Malaysia experiencing a COVID-19 pandemic, the country's economy is also
experiencing a severe decline in export-led growth. Meanwhile, public investment-led growth
has been slowed due to depleted fiscal space. As a result, incremental growth in Malaysia
will require greater focus on raising productivity. At present, the country's low-income
population remains particularly vulnerable to economic shocks. They face mounting financial
obligations and rising costs.
The COVID-19 pandemic has affected the Malaysian economy. Its poverty line was
recently revised, and 5.6% of the population lives in absolute poverty. During the COVID-19,
the government plans to reduce the gap between low-income households and high-income
households. At the COVID-19, the government will focus on improving the livelihoods of the
poorest 40% of the population.
The COVID-19 has severely affected the nation's economy, especially the low-
income group. This group has been the main source of growth for Malaysia. The nation's
economy grew primarily through exports and has remained resilient to external shocks. The
recent growth in the world economy has boosted consumer confidence, but the country's
government has had to limit foreign investment to boost domestic consumption. The lack of a
globalized supply chain means that the country must focus on the well-being of the people in
the lower 40%.
The fourth wave of the COVID-19 is already taking its toll in many countries, but
most of the world's population is now protected with vaccines. But, this fourth wave of the
coronavirus is taking a toll on global businesses. The world's governments are under
immense pressure to come up with better solutions to combat the virus. Fortunately, the
government of Malaysia has implemented a multi-year anticorruption plan in 2019. But
Malaysia's financial sector lags behind other major Asian financial centers.

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