Cun Cun: Economics

The COVID-19 pandemic has undoubtedly caused massive disruptions throughout the economy- not solely on a local level, but on a much more precarious, global scale. This unprecedented shift has caused incredible strife within SMEs, causing massive waves throughout multiple sectors of the economy. Sadly, the majority of affected businesses have been within the private sector- having sustained a great amount of loss and/or closures.

This blogpost aims to inform the reader of the basics of economics, and how Cun Cun may potentially be able to assist those struggling during these uncertain times.

What is Economics?

Economics can be tricky, with two distinct categories defining the subject: Macroeconomics and Microeconomics. To minutely break down the two categories, Macroeconomics is the study of the economy as a whole, looking at variables such as inflation, national output, and aggregate demand. Microeconomics on the other hand, is the direct study of segments of the economy, including study into particular markets. Microeconomics deals with the theory of firms, consumer behaviour, and individual labor markets.

A Brief Overview

To understand the Malaysian economic sphere, we will discuss fiscal policy, monetary policy, and our balance of trade and private spending, and how they affect our lives on a day-to-day basis.

  • Fiscal Policy: Regarding fiscal policy, tax and government spending (e.g. government subsidies and monatormiums), as well as subsidies by the government (reduced tax payable by citizens, rebates on electronics and travelling) all fall within this particular category. As the economy is emerging from a state of lockdown, policies implemented by the government, such as rebates, have the government channeling money back into the economy, whereby the beneficiary of the monies given will be able to continue spending within the market.

    In terms of tax, the payee’s tax is reduced so that they will have more money to spend within the market.
  • Monetary Policy: Essentially, monetary policies encompass interest rates and financing, allocated to citizens by banks.

    A simple way to explain monetary policy is as follows: if you were to take money (e.g. a loan) from the bank, you will be paid (or will pay) interest rates according to the interest rate of the central bank. These rates are fixed by the government in order to perpetuate spending within the economy. For instance, if a bank has a lower interest rate, citizens will borrow more money from the bank- thus creating more spending within the market. 
  • Balance of Trade and Private Spending: Balance of trade is rather simple- it’s regarding the input/output of the country. For instance, if a country imports more goods than it does exports, the country would be operating within a trade deficit, otherwise known as a negative trade balance. If a country exports more than it imports, the country would then have a trade surplus. Essentially, the calculation for Balance of Trade is simple: the total value of exports, minus the total value of imports. 

    Private Spending on the other hand, denotes the spending of people within the country. As long as there is spending within the specific country, there is a perpetuation of cash flow to sustain the economy. *Note that both Fiscal and Monetary policies positively impact the balance of trade and private spending.

How Does Cun Cun Help?

Cun Cun may assist the economy in two ways: perpetuating private spending, and enabling merchants to have an additional platform to sustain themselves by means of attracting more customers, and to potentially stave off closure.

By assisting merchants to go online, Cun Cun helps to enable merchants to grow their business with our own, virtual Digital Economy Community System (DECS) model. By allowing our users/citizens to have access to a wider variety of merchants the rate of spending increases, while allowing merchants to gain an increase in audience, awareness, and sales. 

As users/citizens and merchants come together and form our DECS model within our SuperApp, there is a direct benefit to the overall economy of the country, as spending is being encouraged and perpetuated- directly contributing to the country’s economy.


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