For video 1, in my opinion, I think that economy is make up by people who are willing to sell and those people who are willing to buy a product and services. The economy will involve the transaction between buyers and seller which mean that someone’s spending is another person’s income. When income is increases, spending increases too. Next, the transaction can involve the credit transaction as well. This means that we can use a product and pay it later. The lender will find the creditworthiness of the borrower, if the borrower can able to pay back the money, then the credit transaction can be make easily or by take an asset as collaterals instead. In conclusion, debt should be lower that income and the production has to be faster than income rise, this will create a good economy situation. 

For video 2, I can understand the monetary system that drive up the economy. Bank can make money by lending the currency from savers to borrower who are in need to do any payment in their expenditure. Here means that, bank will collect interest payment from borrower together with the principle in order to make money. The bank can drive up the economy because when currency is deposited in bank, the bank then will get to lend it out. The process of redeposited and relent will occur over and over again.  Next, when the government lack of money, government will issue bond and borrow this money to bank and the people who in need.

 For video 1, In my opinion, economy was make up by many transactions and credit. To drive up economy growth, transaction and credit play an important role. First of all, transaction makes up by many buyers and sellers. Buyer agree to use money to exchanges services or goods sold by sellers. Someone’ spending is someone income. Therefore, people makes many transactions as more as possible can drive up the economy, because government can collect taxes from those peoples and companies. Second, credit is make up by lenders and borrowers. Borrowers have good quality creditworthiness can lend more money. Borrowers also can use collaterals to borrow more money. As long as borrowers spending money use money borrowed, the economy growth can be grow higher and higher. 

For video 2, this second video give us many information about bond, check and reserved ratio. Bond is issued by federal reserved and promises to pay an extra certain amount called interest rate in next certain date. When government is lack of money or funds to drive up economy, government will issue bond and lend it to banks and peoples. Check will function when people hold check and go to the bank to change for money. Last but not least, bank also can make money by lending. People will put deposit in bank and bank will lend those deposits to borrowers, borrowers will use money borrowed to pay their debt, expenses and so on and will drive up the economy indirectly. 

Video 1 

There are three main forces drive the economy which are productivity growth, short-term debt cycle and long-term debt cycle. Besides, credit is the most important part of economy because when a borrower receives credit, he is able to increase the spending. Here, it is important to know that spending could drives economy. This is because one person’s spending is another person’s income. Credit can be bad when it finances overconsumption. However, it can be good when it allocates efficiently. Therefore, we must keep in mind that don’t have debt rise faster than income, don’t have income rise faster than productivity and do whatever we can to raise our productivity. 

Video 2 

When we are depositing our currency in banks, banks can keep some as reserve and loan out the rest. Because of fractional reserve, the banks are allowed to reserve only a fraction of our deposit and loan the rest. When the massive amount of currency spewing into society, the more prices will rise and this will occur an inflation. 

From video 1,I can know this video use animation explain a lot of economic principle.Such as three parts of that.Long term/short term debt cycle,monetary value ,and transaction.Transaction is a important part connect buyers and sellers.

From the videos, its about money system that was about transaction. Transactions occur between seller and buyer. The transactions consist of credit, money, product, financial assets, services, . If amount money spend  and credit spend are plus it become total spending that can drive and boom economy. The total spending divided to the total quantity its become price. So that, all of them become a transactions. The transactions can create a market such as oil market, wheat, car and so on. Usually people, bank and government institutional. Governmental institutional collect tax and expand money and the central bank print money and fixed the interest rates in the country. The exchanges between lender and borrower cause the credit. The credit also can be called as debt because borrower get the money from lender and it will create spending in the market. It will drive an income to the economy. Borrow have a cycles. Credit is a bad if it was over consumptions and it will create a depression. Debt restructuring important to to increase liquidity and avoid bankruptcy.

 

Video 2

 

Monetary system is maintained through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the bank reserves. Treasury bond is national bond in the USA and people can get the money from the interest. Usually, it had a lower risk.

In monetary system, there are seven step how currency are happen. First step is government creates glorified I.O.U.s. Second step is banks swap I.O.U.s to create currency. Federal reserve "pay the bond" that creates check that means it creating a money.The third step is government spends the numbers basically to the benefit to people. The forth step is banks multiply the numbers. Its fractional reserve lending which the banks are allowed to reserve only a fraction of your deposit and loan the rest out. The more currency that we have, the more prices are rise. The fifth step is our numbers are taxed that make central government can collect and make that as spending. The sixth step is debt ceiling delusion, it is all about the maximize value that can do for the debt. The last step is secret owner take their cut by sell the share. 

For video 1, the economy happen when have a transaction and it occur because of human nature. Usually the transaction happen between with buyers and seller. When the income is increase, the spending also increase and it can rise the productivity. However, when the income decrease, people will less creditworthy. The way to handle when in this situation, there are need to cut spending, reduce debt and central bank prints more money. What make me interested at the closing of this video is they give 3 rules of thumbs;- don’t have debt rise faster than income, to prevent suffering a debt. Next, don’t have income rise faster than productivity and lastly do all that you can to raise the productivity.  

For video 2, the government provides money in a country’s economy. In Malaysia, the Bank Negara are responsible in this task. The central bank issue bond to get a money from investor and will pay back the principal with interest. Usually bond will be issues when the government in debt.  

For video 1 

As we can see there are main forces drive the economy which are productivity growth, short-term debt cycle and long-term debt cycle. The economy will involve the transaction between buyers and sellers which mean that someone’s spending to another person. The transaction also can involve the credit transaction which means we can buy something today and pay it in another day. 

For Video 2 

Monetary policy consists of the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the vault 

From this video, it tell us  that there are 3 main forces to drive economics which are productivity growth, short term debt cycle and long term debt cycle. In economy, transaction do occur when buyer and seller connect together by changing their money(buyer) with seller (goods/services). Thus, in a country do have central bank, play main role in the flow of credit. Central bank also using the interest rate in order to manage the inflation and deflation. For inflation, price increase, interest rate also increase. For deflation,price decrease , interest rate decrease. If inflation and deflation balance, it creates beautiful deleveraging.

Video 2.

This video is about monetary system, which include 7 steps. When in deficit spending, government usually issuing bond to get some money. Thus, the currency is not from government policy but it is from banking system (92-94%). 

Based on the video, the economy money system involve two parties that occur between buyer and seller to exchange the goods, services or financial instruments. It was driven by three main forces of the economy:

1. Productivity growth

2. Short-term debt cycle

3. Long-term debt cycle

Basically, in economy, the biggest buyer and seller is the government which is central government and central bank. Central government collects tax and spend money. Central bank controls the amount of money and credit in the economy. Besides, central bank are controlling the influencing interest rates and printing money. An economic cycle also can be control by central bank by increasing the interest rate during the inflation and decrease the interest rate when the deflation occur. 

Video 2

This video explain about how monetary systems work in our real life. A monetary system is the set of institutions by which a government provides money in a country’s economy. When the government budget is low, they will issue bond to get a money as national debt to recover the deficit spending.

Based on the video, economy happen when there is a transaction between the seller and buyer where the seller provides good and services and buyer provides money for the seller to grow. There are three forces responding to economy which are; productivity growth, short-term debt cycle and long-term debt cycle. Deleveraging is the process or practice of reducing the level of one's debt by rapidly selling one's assets by cutting spending, debt reduced, redistribute wealth and lastly the central bank print new money. These activities affected the central bank due to the increase in unemployment rate and taxes collected decrease. 

VIDEO 2
 

The video explained about the process of monetary systems and how it affects the people. When the government ask to spend more money, deficit occurred. The bond will be issued which is a loan with specific period. After the bold sold to the largest bank, the will make a profit by earning interest. Bank the change the bond to produce currency. In short, the government will exchange the bond through a middleman with the federal reserve to create currency. 

Basically, there are three forces that drive the economy. The productivity growth; the short-term debt cycle; and the long-term debt cycle. What I find interesting and thought-provoking in the video is the matter on the debt cycles. "Cycle" here indicates that an economy needs to undergo upturns and downturns. The real question that everybody needs to be asking is where exactly are we on the long-term debt cycle? The person who made the video, Ray Dalio, believes that we are at the end of the debt cycle. He believes that there is a possibility for a "beautiful deleveraging" to occur in the future. Whether his opinion on this is indeed accurate or not, it should be giving us all hope that the restructuring of debt can reduce the economic problems that are happening in the world today.

Video 2

A much more complicated video that summarizes the "fraudulent" monetary system that almost everyone is unaware of. Also highlighted the difference between money and currency. The video basically talks about how the government creates currency through the issuance of bonds.

Speaking about money printing, I believe that the second video actually completes the first video where it explains more about the monetary system. It is because the Central Bank holds a very important role in deleveraging. In the second video, I learn more about bond issued by the Central Bank to the government to fund its deficit spending and I finally understand why do people would say that the “future generation would be paying for the debt the government made today”. Even in the video 2 says that there are actually more debts than money in our current economy due to the monetary system today. (plenty of IOUs)

 In an economy, transaction plays an important role.  Transaction occur when buyers and sellers meet to exchange goods or services that buyer want to buy where seller receive in term of money or credit from the buyer. It is important to highlight that spending drives the economy because increase in income lead to increase in borrowing (credit) and thus increase the level of spending in an economy. Here, credit considered good when the goods or services is bought by a credit can generate income whereas credit considered bad when it is bought is just for own consumption. 

Video 2 explained more about the monetary system. How government deals with money when it faced deficit, why did bond exist, how reserve came from and so on. When government face deficit they will issue bond to maintain the economy of the country. When savers deposit their money into bank, bank will keep a portion of the total deposit that known as reserve in bank and loan the rest out. 

Video 1. 

A monetary system is the set of institutions by which a government provides money in a country's economy. In economy, transaction do occur when buyer and seller connect together by changing their money(buyer) with seller (goods/services). The economy will involve the transaction between buyers and seller which means that someone's spending is another person's income. And we can know that the productivity growth, the short-term debt cycle and the long-term debt cycle are three main focus drive the economy. 

Video 2.

I understood the monetary system that drive up the economy. Bank loans give borrowers some new money and an equal amount of new debt and capital is the owners’ equity in the bank.Because banks are highly leveraged, a small decline in the value of bank assets can have a huge impact on bank capital. Here means that, bank will collect interest payment from borrower together with the principle in order to make money. The bank can drive up the economy because when currency is deposited in bank, the bank then will get to lend it out. The process of redeposited and relent will occur over and over again.  Next, when the government lack of money, government will issue bond and borrow this money to bank and the people who in need.

VIDEO 1 

Based on this particular video, basically there are three main factors that are very crucial to the economic cycle which are productivity growth, short term and also long term debt cycle. As for the money and credit, we knew that they do not preclude each other. Money is the commonly accepted medium of exchange while credit is the exchange of present goods against future goods. A money credit transaction it the exchange of present money against future money. But virtually all credit transactions are money credit transactions. 

VIDEO 2 

As for this video, it explains about the currency. In order to get a money, we knew that government will need to issue bond as the result of the deficit spending and this will actually drive to national debt. This video mainly explains how government faced the deficit spending. 

Khamisah Chow Binti Mohd Aman BB15110302 

Video 1 

Based on the video 1, transaction driven by human nature and they create 3 main forces which are productivity growth, short term debt cycle and long term debt cycle. Beside, credit is the most important part of the economy because it’s the biggest and volatile part.   Credit can help both lenders and borrowers get what they want. And borrowers promise to repay the amount they borrow called principal plus and additional amount called interest. So when borrowers promise to repay and lenders believe them then the credit is created. Thus, credit look simple but it a bit tricky because it has different name since when the credit is create and the credit will turn into debt. And the debt will be settle when the borrower repay the money to the lender. Lastly, credit is so important because borrower receives credit, he is able to increase the spending and spending drive the economy, since one person spending is another person’s income, so when we spent more someone else earns more and when the income rises it makes lenders more willing to lend their money. 

 

Video 2 

Based on the video 2, it explained how the currency are happen in the monetary system. Firstly, government will creates glorified I.O.U.s. when particular leader applies deficit spending. After that the banks will creates I.O.U.s to create the currency. Then the government make some spending that benefit to the people. Next, the banks multiply the number.  Lastly, maximize value that can do for debt and secret owner take their cut sell the share. 

From the Video 2, it talks about how the monetary system run in the economy. Actually, the bank pays the important role to lending the fund from savers to the borrower. When the bank lends the money to the borrower, the borrower needs to pay the extra money bank, it is called ‘interest’. This process will be redeposited and relent again and again in our economic system nowadays.

Based on the video, it shows about the how economy works. Transactions is where people in the market doing business by exchanging between the money or credit to get the goods and services. And then, the government is the biggest buyers and sellers which plays important role collect taxes and spend the money. While central banks also control the amount of money and credit in the economy by influencing the interest rates and print the money. The credits is very important to make the economy growth as we can see when a borrower receive a credits, they can raise their spending. When there is a growth in the economy it leads to the productivity for the short run and not the long run. Credits actually a way to increasing the spending by borrowing. 

Monetary systems is the set of institutions by which a government provide money in the country's economy. When the government lack of money the will issued a bond, to stabilise the nation's economy. Bond is a fixed-income security, is a debt instrument created for the purpose of raising capital. They are essentially loan agreements between the bond issuer and an investor, in which the bond issuer is obligated to pay a specified amount of money at specified future dates.

i think the sector that are mostly positively impacted would be the consumer sector, The personal income tax cuts and special payments to civil servants should boost consumption and benefit consumer companies. i would expect the GDP next year to increase by a few percentage.

Thus, in budget 2018 also stated that 2% from the individual income taxes will be reduce. As the impact, people would have more cash flows and this can make standard of living be much better. Moreover, people that have more income also most probably want to have or increase their own savings and investing in the financial markets. With the investment increase, our GDP also could be rise then the standard of living become more better.

In my opinion, based on the Malaysia budget 2018, the government decides to reduce the individual income tax rates. Reduction of individual income rate is RM20,001-RM35,000 : 5 to 3 percent, RM 35,001-RM50,000 : 10 to 8 percent and RM 50,001-RM70,000 : 16 to 14 percent. This is will increase disposable income between RM300-RM1, 000. Implementation of this step is more than 261 thousand does not have to pay taxes. When individual income tax rates reduce, it will increase individual income and it will increase the consumer spending. When consumer spending increase, the GDP will increase because companies tends to perform more to produce the product. Next, the government decides to increase export by way promotion and expansion of export market. By this way, the Malaysia GDP will increase because inflows of money into the country increase. By promotion and expansion of export market, demand for Malaysia goods will increase. This will increase product production and further increase GDP and unemployment will decrease because production company need more workers to cover increase product production. 

 

Not to mention, as soon as the new baby's birth early next year until 2022, the consolation worth RM200 in the form of Amanah Saham unit is given to the baby .This latest incentive will encourage parents to save money for their children from infancy. Incentives are also given to children who have grown up through various educational and scholarship assistance to mature children such as MyBrain schemes for those who wish to continue their studies at masters and doctoral degrees. For a non-working mother, tax incentives for a 12-month tax exemption were given to persuade them to work again. What is interesting, maternity leave incentives for working women in the private sector are extended to 90 days compared to just 60 days before. This gives them the opportunity to take care of a newborn as best they can as possible while keeping themselves fit before returning to work. Budget 2018 also eases family burden in getting maids at a cheaper price than it is today. This makes it easier for parents who are in need of a maid because of their busy work and at the same time have many children who need to be well-managed. In addition, for a low-income family will enjoy the 1Malaysia (BR1M) aid for a maximum of RM1,200.

This situation will improve the purchasing power of consumer and they will spent more. However the increase on the spending will increase the amount of money in the market which will lead to inflation.

Then, impact for equity market Budget 2018 does not expect to fully excite the market, although it does provide sufficient drivers to lift consumption spending, manufacturing capital expenditure and continued construction activity. The budget was expected to have some positive implications on the local finance sector. 

The personal income tax cuts and special payments to civil servants should boost consumption and benefit consumer companies. Contractors should gain from the increase in the value of construction projects. Income tax to be cut by 2 percentage points for those earning RM20,000-Rm70,000 annually.

In the budget, Datuk Seri Najib Tun Razak announced that there is an allocation of RM250 million for the education of generation TN50 - fourth industrial revolution including to develop science, technology, engineering and mathematics (STEM) for the country to move into a more knowledgeable and innovation-based society. The impact of this is Malaysia can walk align and be more prepared to face the emerging technology advancements as well as other nations. This may help improve many industries in the country if we are able to get the gist of the technological improvements.

In addition to that, the property industry will definitely benefit from economic boost due to the specific housing budget allocation in Budget 2018. The scheme such as Pr1MA Skim Pembiayaan and MyDeposit programme will greatly help people of the first-time home buyer with their deposits and installment when buying a house.

  

According to possibilities that RHB sees in Budget 2018, the government is expected to boast growth in the digital economy and possible tax incentives for industries that pioneer into fields such as automation, robotic development, big data and cloud services. This is one of the reason why IT companies at boosting upwards in share price recently. For example, Kronologi Asia Berhad is the service companies that provide for online data storage and protection solution. Kronologi share had been rocketing upwards from lowly 30 cent and now it’s currently trading at almost PER X 20 based on annualize earning of 5 cents for FYE 2017. This flying up this year because of Budget 2018 in term of taxes incentives for being involved in cloud services.   

Moreover, Malaysia budget 2018 bring more benefits to all of us especially as a student. There’s more discounts of paying PTPTN loan based on how they pay thieir loan. These implementation can increase people’s cash flow. This is because if people’s cash flow increases, they will increase their consumer spending and will directly contribute to economic growth.

We appreciate the government’s efforts to further invigorate the capital market by introducing the Alternative Trading System. The demand for ATS in South East Asia is growing, and we are eager to see how this can drive capital market growth, bring improvements in execution speed, and reduce transaction cost.

Large-scale infrastructure development is a potent stimulus in driving domestic growth, and the growth of the Malaysian capital market; we see this in the major projects announced by the government, especially in the RM6.5billion allocation for infrastructure development in rural areas. Continued capital expenditure on infrastructure projects such as this is evidence of the long-term view taken by the government on providing the right ecosystem to support future economic growth.

The continued growth of SMEs and entrepreneurs is key to a robust economy and we are pleased to see the government continue to pay close attention to this sector by allocating R200 million for soft loans, training and grants via SME Corp. This is in addition to the RM7 billion allocated for the Working Capital Guarantee Scheme for SMEs and microenterprises to grow their businesses. Such initiatives are a positive sign for the continued growth for the Malaysian SME segment.

Based on the Malaysian Budget 2018, Prime Minister Datuk Seri Najib Tun Razak announced that the largest allocation for farmers, fisherman, rubber tappers and smallholders communities of RM6.5 billion. In my opinion, this situation good for the economic growth. This is because the agriculture sector had potential to help economic growth in the future. Other than that, there will be many employment opportunities in the rural. At the same time, this is good for entrepreneurs in agriculture to increase production and reduce the cost of living especially in rural areas. Additionally, improvement in the agriculture sector are capable of generation substantial revenue for the country by reducing import of goods and increasing export. In conclusion, it will attract the investor from local and foreign to invest their money in agriculture industry. Indirectly, the flow of money abroad reduce, as well as consider the revenue of export will increase.

          In the invigorating the economy, this budget also boosting the digital economy and high tech sector. For example is the Cyberjaya Futurise Centre and expansion on regulatory sandbox to elevate innovation. Next, it can promote the regional hub, principal hub tax incentive extended to 31 Dec 2020. This budget also can develop the tourism. A special tourism healthcare incentive will increase to 100%. RM1billion funding for venture capital investments. The most interesting is, the budget will lowering the cost of business. Certain GST relief such as handling services rendered to cruise operators, importation on the aircraft, ships and oil rigs. Services also will be provided by local authorities and not subject to GST.