(a)[2]
State whether, over the period July 2013 to July 2017, the Malaysian ringgit depreciated or appreciated against the US dollar. Justify your answer.
(b)[4]
- Describe how you would expect a country’s foreign exchange rate to affect its balance of trade in goods and services. [2]
- Explain whether the evidence in Fig. 1.1 and Fig. 1.2 supports this relationship. [2]
(c)[2]
In July 2017, Malaysia’s balance of trade in goods and services was RM22 045 million, whereas its current account balance was RM9642 million. Explain the reason for this difference.
(d)[6]
Apart from exchange rate changes, explain two possible reasons for Malaysia’s rising balance of trade in goods and services surplus from July 2016 to July 2017.
(e)[6]
Discuss whether the Malaysian government ought to be worried about persistent surpluses in its balance of trade in goods and services.