Pool of ten questions. Please choose five questions to respond to, that you'll answer please!
Choose five of the ten questions and provide answers for each in a Word document. In your Word document, include only the question number followed by your answer—do not provide the question itself. Be sure that you associate each answer with its respective question number e.g. 1a, 2c, 4b. You also need to include any graphs you've created in your Word document. Each question is worth two marks. Please do not attach a cover sheet to your assignment.
You must draw graphs using Excel, take a screenshot, and then insert these into your Word document.
uestion 1
Briefly explain:
(a) the concept of GDP. (1 mark)
(b) the main difference between nominal GDP and real GDP. (1 mark)
Use full sentences and explain your reasoning.
Question 2
The following table provides GDP for one of the Asian economies. Based on this table, answer the following two questions.
Year | Billions of dollars in constant prices |
|---|---|
2019 | 1075 |
2020 | 1120 |
2021 | 1160 |
2022 | 1175 |
2023 | 1200 |
- Calculate the economic growth rate for each year from 2019 to 2023, i.e.
Growth rate from 2019 to 2020 (0.25 marks)
Growth rate from 2020 to 2021 (0.25 marks)
Growth rate from 2021 to 2022 (0.25 marks)
Growth rate from 2022 to 2023 (0.25 marks) - Calculate the average annual economic growth rate for the period 2019 to 2023. (1 mark)
Question 3
Based on the data collected in the labour force survey for country AAA below, calculate the total unemployment (1 mark) and the size of the labour force (1 mark):
Working age population | |
|---|---|
| Employment | 11 million |
| Unemployment | |
| Unemployment rate | 5.5% |
| Labour force | |
| Labour force participation rate | 62% |
Working age population (2023) courtesy of Swinburne Online
Question 4
What advice for finding a job would you give someone who is frictionally unemployed? (1 mark) Someone structurally unemployed? (0.50 mark). Someone cyclically unemployed? (0.5 mark)
Question 5
If the government eliminated unemployment benefit payments, what would be the effect on the level of frictional unemployment? (1 mark) What would be the effect on the level of real GDP? (0.5 mark) Would well-being in the economy be increased? (0.5 mark) Briefly explain.
Question 6
Which component of GDP will be affected by each of the following transactions? If you believe that none of the components of GDP will be affected by the transactions, briefly explain why?
- You purchase a new apartment (0.5 mark)
- You purchase a second-hand car (0.5 mark)
- An overseas person studies a degree at an Australian university (0.25 mark)
- A dairy farmer in Victoria produces milk which is shipped to Singapore (0.25 mark)
- A Bakers Delight store purchases a new oven (0.25 mark)
- The government builds new roads to help improve access to mine sites in Western Australia (0.25 mark)
Question 7
Use the data in the following table to calculate the GDP deflator for each year (values are in billions of dollars):
Nominal GDP $ | Real GDP $ | |
|---|---|---|
| 2016 | 13 377 | 12 959 |
| 2017 | 14 029 | 13 206 |
| 2018 | 14 292 | 13 162 |
| 2019 | 13 939 | 12 703 |
| 2020 | 14 527 | 13 088 |
Which year from 2016 to 2020 saw the largest percentage increase in the price level as measured by the GDP deflator? (2 marks) Briefly explain.
Question 8
Read the following excerpt and answer Questions 8a and 8b. Note:
In November 2020, the Reserve Bank of Australia (RBA) cut the cash rate to a record low of 0.1%. The RBA also announced that commercial banks would be allowed to borrow from the RBA for three years at an interest rate of 0.1% via the so-called 'Term Funding Facility'. Both these moves curbed the costs of borrowing for commercial banks substantially. For simplicity's sake, assume that there are only two commercial banks operating: Commonwealth Bank (CBA) and Westpac. Westpac is contemplating whether to pass the cuts in its borrowing costs to its home loan customers, i.e., reduce the interest rate charged on home loans. Also, please note that a key characteristic that sets oligopoly apart from other market structures is the fact that firms in an oligopolistic market are interdependent.
Question 8a. Suppose you are the chief economic adviser at Westpac. Would you suggest Westpac cut its home loan interest rates? What are the factors you must put under consideration? (1.0 mark)
Question 8b. Unlike the other three market structures, we do not analyse firms in an oligopoly market using graphs, i.e. firm diagrams. We have to employ a different analysis technique called game theory. In your own words, clearly explain why it is not possible to draw graphs to illustrate a firm operating in an oligopoly market. (Hint: It is tied with the fact that firms in an oligopoly market are interdependent). (1.0 mark)
Question 9
Consider the example where Jim’s Coffee (they seem to sell everything else) wants to open a store but a major existing company, Stars and Coffee, threatens Jim’s by saying, 'If you enter I will charge lower prices.' The pay-off matrix is below. Answer questions 1 to 4.
Question 1. Define dominant strategy. (0.5 marks)
Question 2. Does Jim's coffee have a dominant strategy? (0.5 marks)
Question 3. Does Stars and Coffee have a dominant strategy? (0.5 marks)
Question 4. Define Nash equilibrium. What is (are) the Nash equilibrium(s) in this game. Explain. (0.5 marks)
Question 10
For each of the following, indicate if the person would be classified as employed, unemployed, or not in the labour force and why:
Question 10.a A 45-year-old person who has been made redundant in their current position is looking for work and is able to start immediately, but does not have the skills required by industry and needs retraining. (1 mark)
Question 10.b A person who is working for 10 hours a week paid work in a supermarket while studying full time. The person is looking for full time work but cannot start until they finish their study in 3 months time. (1 mark)
Referencing will be in APA 7th edition style (APA 7).