Economic Shock Case Study

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1.0 Introduction Economic shock on Malaysian export can describe as a badminton competition between Dato’ Lee Chong Wei and Lin Dan, their relationship can be either positive or negative which is depends on their position whether they are involve in a competition or beyond the competition. In a single match of badminton competition, each smash is like a “shock” for other side even though they could predict it, but each “shock” is a test or challenge to the player whether the player able to handle and control the “shock” and win the match or otherwise. Similar to this real world, unpredictable volatility or shock is always a challenge or a test for an individual, firm, and country as well. Economic shock has its own wide meaning and its effect…show more content…
International trade is an exchange activity which is involving two parties to gain their profit in a market. Simply says, economic is an exchange. A higher total export can lead a greater cash inflow, to create trade surplus and it is usually cover the country’s debts. Hence, international trade brings more benefits to mother country than other colonies, especially exports activities. Based on Department Statistic Malaysia (2014), there was a rapid growth in total exports in Malaysia from 1970 to 2008. However, Central Asia Crisis in 2008 has declined total export. Malaysia’s exports performance was recovery during December 2013 until February 2014 due to increases of petroleum products, crude oil, palm oil products and natural rubber (Departure of Statistics Malaysia, 2013). Malaysian firms have tendency to break into export markets. To enter international market smoothly, government should become more concern on some unexpected economic…show more content…
With an evolution of Malaysian economy from primary sector (agriculture), secondary sector (manufacturing, and industry), tertiary sector (service), and now knowledge-based economy where has promotes the economy performance over the decades (Poon, 2005). Export competitiveness of Malaysia in world market should be encountered which may affected by change of exchange rate and structural transformation effect. The international trade is encouraging among countries is because of different factor endowments, however, in contrast, trading between developed countries actually have similar factor productions and relative prices (Malcolm & Rebecca,

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