Using the AD and Phillips curve model, show the state of the Australian economy assuming having a stable target inflation of 2% prior to COVID-19. Now, in the same model, show and explain the impact of the above-mentioned construction boom on employment and inflation levels in Australia resulting in the current state of the economy (2022- 2023).

Q7 Answer part a only

b) There is a change in expectations and firms in the economy now expect the price level to be lower in the future. In the context of the AS-AD model, and with the aid of a diagram, explain the short run effects this has on the price level output, and unemployment in the economy.

We try to predict the unemployment (unem) with an AR(1) model and VAR(1) (unemployment and inflation). Figure 1 shows the predication results based on AR(1) and the Figure 2 shows that for VAR(1). The RMSE and MAE for AR(1) are 0.48 and 0.54, while those for VAR(1) are 0.58 and 0.52. Which one of the following statements is correct: 10 civilian unemployment rate, % амми um 1950 O b. O c. O d. 1960 1950 num True unemployment rate before 1996 Confidence interval True unemployment rate after 1996 1970 1980 1948 through 2003 1960 1970 1980 1948 through 2003 True unemployment rate before 1996- Confidence interval True unemployment rate after 1996 1990 AR(1) performs better than VAR(1) because it has smaller RMSE VAR(1) performs better than AR(1) because it has smaller MAE We cannot tell which one performs better Forecast based on AR(1) Confidence interval 1990 2000 2000 We try to predict the unemployment (unem) with an AR(1) model and VAR(1) (unemployment and inflation). Figure 1 shows the…

Homework: Chapter 27 1. Aggregate demand, aggregate supply, and the Phillips curve In the year 2020, aggregate demand and aggregate supply in the fictional country of Bartak are represented by the curves AD20 and AS on the following graph. The price level is 102. The graph also shows two possible outcomes for 2021. The first potential aggregate demand curve is given by the ADA curve, resulting in the outcome illustrated by point A. The second potential aggregate demand curve is given by the ADB curve, resulting in the outcome illustrated by point B. PRICE LEVEL 106 AS 107 106 B 105 104 AD 2020 103 102 101 19V 100 D 10 AD OUTPUT (Trillions of dollars) ADB 12 14 (?) Suppose the unemployment rate is 6% under one of these two outcomes and 3% under the other. Based on the previous graph, you would expect to be associated with the lower unemployment rate (3%). outcome B outcome A emand is high in 2021, and the economy is at outcome B, the inflation rate between 2020 and 2021 is Based on your…