a. When the Australian economy is at full employment, why isn’t the unemployment rate, as measured by the Australian Bureau of Statistics, equal to zero?
b. Briefly explain whether you agree or disagree with the following statement: “I don’t believe the government price statistics. The CPI for 2009 was 178, but I know that the inflation rate couldn’t have been as high as 78% in 2009.”
a. Explain why and how investment depends on the real interest rate.
b. The ABS reported the following data for October 2015:
Labour force: 11,247,000
Working-age population: 17,278,000
Calculate for that month the:
i). Unemployment rate.
ii). Labour force participation rate.
iii). Employment-to-population ratio.
The following events have occurred at times in the history of Australia:
• A deep recession hits the world economy.
• The world oil price rises sharply.
• Australian businesses expect future profits to fall.
Use the AD/AS model to show the following :
a. Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.
b. Explain the separate effects of each event on real GDP and the price level, starting from a position of long-run equilibrium.
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