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TOPIC 7 : MALAYSIA & INTERNATIONAL TRADE (ADVANTAGES OF OPEN ECONOMY…
TOPIC 7 : MALAYSIA & INTERNATIONAL TRADE
STRATEGIES TO OVERCOME DECLINE IN TRADE BALANCE
Lack of new markets to export our products especially OIC countries & other third world countries
Increase exports & reduce imports
Reducing the price & increasing the quality of our local products to gain competitive advantage
INTERNATIONAL TRADE
Open economy
Closed economy
BALANCE OF TRADE
Difference between the monetary value of imports and exports in an economy over a certain period of time
STEPS TO OVERCOME DEFICIT IN SERVICE ACCOUNT
Training
ICT based education produce
Reduce intangible imports / increase intangible reports
Promote scores are
ADVANTAGES OF OPEN ECONOMY
Necessary for globalization any internalization of Malaysia
Transfer of technology
Income generation from open economy activities
Transfer of knowledge
Assisting the country towards international market and developing economy
BENEFITS OF I. T
To get benefit from specialization
Mean of production can be used efficiently
To get goods not produce within country
Expand the local industries market
IMPLICATIONS I.T.
Export earning
Deficit in the current account & balance of payment
Depend on foreign trade
Implication on income
BALANCE OF PAYMENT
The record of all the inflow and outflow of money arising from international trade are kept in teh BOP account
CAUSES OF IMBALANCE BOP
The government's fiscaldeficit
Business competitiveness
Private behavior such as willingness of consumers
Exchange rate
FACTORS THAT INFLUENCE BOP
Overall economic growth & GDP
Balance of trade
Current account
Others ( political stability, sociio economic factors
Capital account
PROTECTION & THE NEEDS OF TRADE BARRIERS
Revenue resource
Improvement employment and BOP
To protect infant / new industries
Anti dumping
CURRENT OF ACCROUNT
It records the payment of import and export of goods and services flowing into and out of the country
THE STATEMENT STRUCTURE OF C.A.
Export and i port of tangible goods
Export and import of intangible goods
Transfer of payment
WHY HUGE SURPLUS IN TRADE BALANCE ?
High demand for export market
Economies of scale
Having less imported products
Produce more goods internally
Highly competence workers
CAPITAL ACCOUNT
An account that tracks the movement of fund for investment and loans into and out of a country
TYPES
Short term capital
Long term capital
The capital account makes uo part of the balance of payment
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