This Assignment consists of two problem questions
Answer the following questions ensuring that you apply economic principles or theory wherever possible to support your decisions.
Define the concepts of the unemployment rate and the labor force participation rate. Using data from the Australian Bureau of Statistics (ABS) http://www.abs.gov.au/, collect information on both unemployment and labour force participation rates for the period 1980 to 2018 inclusive. Employ annual figures. Be explicit and define and provide detailed sources for the data obtained. Plot the unemployment and labour force participation rates over-time and provide an explanation of any time-series patterns, drawing upon economic principles or theory.
Employ the aggregate demand and supply model for the Australian economy, to analyse both the short run and long run consequences for real GDP and the general price level of the following scenarios. Please support your answers with research evidence, referencing and citing appropriate sources. In your response clearly state your assumptions, distinguish between the short-run and long-run consequences and illustrate your answers with diagrams.
(a) the impact of bush fires across rural Australia,
(b) the United States and China strike new trade agreements,
(c) house prices rebound in the major Australian capital cites.
- be able to make decisions that incorporate the relevant benefits and cost analysis.
- be able to critically examine and demonstrate why it might be necessary for government to intervene in the production of goods and services and in the distribution of income.
- be able to examine critically the health of the economy as a whole through the analysis of major economic variables and advise on likely policy alternatives.