In 2015, the Malaysian government set out its objectives to increase productivity and savings. There has been higher consumer expenditure, driven in part by higher wages received mainly by older workers. However, low levels of savings remain a concern. Savings provide funds for investment (spending on capital goods) which contributes to economic growth and can influence inflation.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. [1] (a) raise the rate of interest
2. [1] (a) introduce tax-free saving schemes
3. [1] (a) provide information / education about the benefits of saving
4. [1] (a) introduce compulsory saving schemes
5. [1] (a) government measure that can increase income e.g. lower taxes
6. [1] (b) Improvements in education and training
7. [1] (b) would increase the skills of workers
8. [1] (b) More capital equipment / investment
9. [1] (b) which may increase the speed / accuracy at which workers work / more efficient machinery
10. [1] (b) Increase in wages
11. [1] (b) which will motivate workers
12. [1] (b) Lower working hours
13. [1] (b) workers less tired
14. [1] (b) Better working conditions
15. [1] (b) less stressed
16. [1] (b) Better weather / improvements in the type of crops grown / better feed for animals
17. [1] (b) which can increase agricultural output / which may result from research and development
18. [1] (b) Immigration of workers
19. [1] (b) with better skills
20. [1] (b) Better healthcare
21. [1] (b) workers fitter
22. [1] (b) Successful supply-side policy measure
23. [1] (b) e.g. spending on infrastructure
24. [1] (b) Specialisation
25. [1] (b) workers concentrating on particular tasks may produce products more quickly / efficiently
26. [1] (c) Higher investment will mean higher spending on capital goods
27. [1] (c) it could increase total (aggregate) demand
28. [1] (c) this could increase demand-pull inflation
29. [1] (c) if total (aggregate) demand exceeds total (aggregate) supply
30. [1] (c) May increase demand for imported capital goods / raw materials
31. [1] (c) causing imported / cost-push inflation
32. [1] (c) Higher total (aggregate) demand could increase employment / decrease unemployment
33. [1] (c) which could increase total (aggregate) demand further
34. [1] (c) In short run may raise costs of production (purchase of machines)
35. [1] (c) causing cost-push inflation
36. [1] (c) In the long run it could increase output
37. [1] (c) may introduce advances in technology
38. [1] (c) increase efficiency / productivity
39. [1] (c) it could reduce costs of production
40. [1] (c) reducing cost-push inflation
41. [1] (c) Investment in human capital
42. [1] (c) raising workers' skills
43. [1] (d) They have more experience
44. [1] (d) they are likely to have received more training
45. [1] (d) they may have higher productivity
46. [1] (d) more skilled
47. [1] (d) more reliable / make fewer mistakes
48. [1] (d) in higher demand
49. [1] (d) lower supply
50. [1] (d) They may have been with the same employer for some time
51. [1] (d) and may have been promoted
52. [1] (d) Some older workers may be rewarded for staying with the same employer / young workers may be at start of career
53. [1] (d) be paid a loyalty bonus
54. [1] (d) In some countries, the minimum wage may rise with age
55. [1] (d) Some older workers in jobs requiring physical strength
56. [1] (d) may be less fit / young workers may be fitter
57. [1] (d) Older workers may be less occupationally mobile
58. [1] (d) geographically immobile
59. [1] (d) and so may not move to gain higher wages
60. [1] (d) Young workers may be more up to date with advances in technology / new methods / new ideas
61. [1] (d) their skills may be in higher demand
62. [1] (d) Young workers may be in expanding industries
63. [1] (d) Young workers may work more hours
64. [1] (d) may be better educated / more qualified