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This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit.
On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real
However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian).
Question 4. Given the economic conditions described above, recommend the appropriate
Clearly explain why this type of monetary policy is needed.
Question 5. Describe in details the steps the RBA must undertake to implement the monetary policy suggested in question above
Question 6. Given the economic conditions described above, recommend the appropriate fiscal policy that the federal government should implement. Clearly explain why this type of government policy is needed.
Question 7. Describe in details the actions the federal government should undertake to implement the fiscal policy suggested in Question 5.
Question 8. In late 2019, economic conditions remained disappointingly weak. ABC News reported that the RBA was "nearly out of ammunition" to boost
Do some research to explain why the RBA’s monetary policy was no longer effective (aka "out of ammunition") in late 2019.
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- The following table shows the monthly total expenditure in 2010 for an economy expressed in thousands of Canadian dollars (CAD). Month Value Jan 358.6 Feb 373 Mar 387.9 Apr May 403.5 419.7 Jun 436.5 Jul Aug Sep 454 472.3 491.3 Oct 511.1 Nov 531.6 Dec 553.1 e. What is the annualized growth rate in percentage between January and February 2010 using the exact formula? Round your answer to the nearest second decimal. f. What is the annualized growth rate in percentage between November and December 2010 using the approximation formula? Round your answer to the nearest second decimal. g. What is the value of the index base 100 = April 2010 in November 2010? Round your answer to the nearest second decimal.arrow_forwardGDP should not be used as the only measure of growth in an economy. Using three (3) reasonsidentify whether you agree or disagree.arrow_forwardSuppose that the returns to education are 13.4% per year for the first four years of schooling (grades 1–4), 10.1% per year for the next four years (grades 5–8), and 6.8% per year for education beyond eight years. In a certain country, everyone in the labor force in the year 2000 had 12 years of education. In 1950 everyone in the labor force had 4 years of education. What was the average annual growth in income per worker that was due to the increase in education?arrow_forward
- We Suppose U.S. nominal GDP increases from one year to the next year. conclude that U.S. production of goods and services has increased because: Prices have decreased from one year to the next Prices have increased as well from one year to the next We do not know whether prices have changed from one year to the next The best measure for determining growth in output between two periods is real GDParrow_forwardplease as soon as possiblearrow_forwardThe GDP of South Africa in 1950 was 77,836.88 million dollars. In 2019 it was 748,861 million dollars. What has been the annualized growth rate of GDP for South Africa during the period 1950 to 2019? Use growth compounding to calculate the number and write the answer in percent terms with up to two decimals (e.g., 10.22 for 10.22%, or 2.33 for 2.33%).arrow_forward
- Statistics Denmark monitors the development of economic variables and measures e.g. productivity development.In general, it is one of the laws of economics that employee productivity determines the ability of employers to pay employees wages. The higher the productivity (per capita output), the higher the wages that can be paid. In a recession, such as Covid, companies are generally reducing their use of labor. The latest statistics show the following: In the third quarter of 2020, labor productivity growth in Denmark was 2%. This increase alone does not say much, but is considered to be able to reflect an increase in productivity following a contraction in labor input. a. Show the relationship between production and labor use in the short term and at the same time explain with a picture what can cause the growth of productivity. b. What is happening to marginal production at the same time? c. Show how wages develop if companies keep marginal costs fixed in the above circumstances…arrow_forward75% Find 5.2 Consider the following economy: FYI: for this production function. Parameter Value Investment rate (0) 3% 5% Depreciation rate (8) Population growth (g) 25 Productivity level (A) 4% Productivity Growth (ga) Currently, the economy has a labour force of 5,000 and a capital stock equal to 15,000. 5.2.1 Calculate this country's current rate of economic growth. 5.2.2 How fast will country grow annually once its steady state is reached? 1 2 YAK3L3 ¹)=A₁²arrow_forwardUsing the following data, calculate productivity: GDP = 100 billion Employment = 1 million %3D Annual hours worked per worker = 2,000arrow_forward
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