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Analyze the impact of the government budget deficit on Malaysia's open economy. Include a three-panel diagram, the market for loanable funds, net capital outflow and the market for foreign currency exchange to demonstrate the effects.

Analyze the impact of the government budget deficit on Malaysia's open economy. Include a three-panel diagram, the market for loanable funds, net capital outflow and the market for foreign currency exchange to demonstrate the effects.

ECON MACRO
ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter12: Federal Budgets And Public Policy
Section: Chapter Questions
Problem 3.8P
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(b) Malaysia's fiscal deficit to rise to level seen during global financial crisis KUALA LUMPUR - Malaysia's fiscal deficit for 2021 should hit a level similar to that seen during the global financial crisis more than a decade ago, according to the government's first-ever pre-budget statement. Released on Tuesday (Aug 31), the country's Independence Day, the pre-budget statement showed the fiscal deficit reaching between 6.5 per cent and 7 per cent for 2021, higher than the 5.4 per cent initially estimated. The deficit reached 6.7 per cent during the 2008-2009 global financial crisis. Malaysia's economy has been battered since a budget projection was first made late last year, with the country beset by surging Covid-19 infections and repeated lockdowns for much of the year. Analyze the impact of the government budget deficit on Malaysia's open economy. Include a three-panel diagram, the market for loanable funds, net capital outflow and the market for foreign currency exchange to demonstrate the effects.
Transcribed Image Text:(b) Malaysia's fiscal deficit to rise to level seen during global financial crisis KUALA LUMPUR - Malaysia's fiscal deficit for 2021 should hit a level similar to that seen during the global financial crisis more than a decade ago, according to the government's first-ever pre-budget statement. Released on Tuesday (Aug 31), the country's Independence Day, the pre-budget statement showed the fiscal deficit reaching between 6.5 per cent and 7 per cent for 2021, higher than the 5.4 per cent initially estimated. The deficit reached 6.7 per cent during the 2008-2009 global financial crisis. Malaysia's economy has been battered since a budget projection was first made late last year, with the country beset by surging Covid-19 infections and repeated lockdowns for much of the year. Analyze the impact of the government budget deficit on Malaysia's open economy. Include a three-panel diagram, the market for loanable funds, net capital outflow and the market for foreign currency exchange to demonstrate the effects.
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