1303AFE Economics for Decision Making 代写




1303AFE Economics for Decision Making 1
Written Assignment
 
Fill in your student details:
Student Name:
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Instructions:
Submission deadline for the assignment is Friday (5 May), 3:00pm.
·        Your assignment must be typed in a word document in .doc or .docx format – no pdf.
·        For questions when you need to do calculation, please display all workings.
·        Wherever required, you can draw your diagrams by hand; then scan (or take a picture) and insert your drawings into your word document.
The online submission point of your completed assignment can be found under ‘Assessment’ tab, Written Assignment folder, in the course website. When submitting students mustalso fill in the digital cover sheet provided in the folder. Failure to follow the submission requirements may result in a null mark.
 
Question 1
a)      Explain the relation between natural rate of unemployment and the full employment.
(2 marks)
 
b)      The current unemployment rate is 7.5% and the number of people in the labour force is 165,475. Use this information to find the following.
                                  i.            How many people are unemployed?
                                ii.            If the working age population is 196,547, what is the labour force participation rate?
(2 marks)
c)      Suppose that the size of the labour force increases by 20,000 people. What would happen to the unemployment rate? Assume that the number of people unemployed does not change. Explain your answer by referring to the relevant equation.
(2 marks)
 
d)      Hien cannot get a job as an accountant as she has not updated her skills to use the relevant computer programs required in the accounting profession. Is Hienfrictionally unemployed, structurally unemployed or cyclically unemployed? Explain your answer.
(2 marks)
 
Question 2
a)      Describe the key roles of the Reserve Bank of Australia (RBA) as specified on their website.
(1 mark)
 
b)      i)     Assume that the reserve ratio in a country is 5%. What would be the simple money multiplier?
(1 mark)
 
ii)        Suppose that customers deposit $2500 into their banks. Based on the simple money multiplier calculated in part i), calculate the final change in the money supply available in the banking system.                               
(1 mark)
 
iii)      Calculate the final change in the money supply available in the banking system if the reserve ratio increases to 10%.  Explain briefly how money multipliers work.
(2 marks)
 
c)      The Federal Reserve (U.S. Central Bank) would like to decrease the interest rates in the economy. What open market operation (OMO) action should the Federal Reserve take? What will happen to the cash rate, interest rates, inflation and GDP? Illustrate the effect of the OMO action using MD-MS diagram.
(4 marks)

 
Question 3
a)      Refer to the table below.

Price Level	Real GDP Demanded (in Billions)	Real GDP Supplied (in Billions)
40	310	215
45	290	230
50	275	245
55	260	260
60	245	275
65	230	290

 
                    i.            Using the information provided in the table above, plot the Aggregate Demand & Aggregate Supply curves by hand.  Insert your drawing below.
(2 marks)
 
                  ii.            Identify the macroeconomic equilibrium. Indicate this point on your drawing from part i.
(1 mark)
 
                iii.            Assume potential GDP is at $275 Billion. Illustrate potential GDP on your drawing. Is there an inflationary or recessionary gap? Explain why.
(2 marks)
 
 
b)      Assume that the UK macroeconomic equilibrium is equal to the potential GDP.
UK makes a decision to leave the EU.  This results in investment in the UK to fall. Using AD-AS model, explain carefully the immediate and long termeffects of the event towards the economy. Draw the appropriate AD-AS diagram to support your explanation.
 (4 marks)
c)      Watch the video available at the following link, and write a brief description of the event described in the video.
https://www.youtube.com/watch?v=B6Wo3bDJT0U
 
Assume that prior to the event the Australian economy’s macroeconomic equilibrium was equal to the potential GDP. Using AD-AS model, explain carefully the immediate and long termeffects of the event for the Australian economy. Draw the appropriate AD-AS diagram to support your explanation.
 
 (4 marks)

1303AFE Economics for Decision Making 代写