Question 1 (625 words)
Discuss the problem of using the unemployment rate as the sole indicator to infer the performance of the labour market.
What other useful labour market indicators can be used to supplement your assessment of the health of the labour market?
Question 2 (625 words)
The Australian government promised to increase national infrastructure spending in the 2018 federal budget (for more information, go to https://www.budget.gov.au/2018-19/content/overview.html and click on Building Australia in the right panel).
What is the likely long-run effect on the level of productivity in Australia?
Use the general equilibrium model to illustrate and explain the long-run effects of this national infrastructure plan on the labour, product and capital markets. For ease of exposition, assume that the Australian economy is at full employment and faces a downward-sloping labour demand curve, a vertical labour supply curve and a perfectly inelastic savings curve.
[This is for illustration purpose only, you are not expected to comment on the details included in the diagram]
Question 3 (625 words)
The centrepiece of the 2018 federal budget is a personal tax cut for the low and middle income households (for more information, go to https://www.budget.gov.au/2018-19/content/overview.html and click on Overview in the right panel).
Use the income-expenditure framework to assess whether the tax cut is able to increase the level of output and consumption of the economy in the short run. In your discussion, consider the effect of the marginal propensity to consume.
Question 4 (625 words)
Booming housing market and stockmarket have generated an increasing level of wealth in Australia. Use the ADI-IA diagram to illustrate the dynamic effect of this demand shock from the short run to the long run. Assume that the economy is initially positioned at equilibrium with full-employment (Yf) and an inflation target rate (π*).
After you’ve delivered your macroeconomic analysis, the RBA governor decides to leave the inflation target rate unchanged and requests your advice on whether further monetary policy intervention is needed. What is the cost of monetary policy inaction on the economy?
All questions need to be structured in the form of a self-contained, short essay. Each question is marked out of 20. Below contains the marking criteria for each question:
|Introduction||Provide a synthesis of the short essay; clearly state any assumtions you made in your response||3|
|Analysis||Address the the question in a concise and coherent manner; using relevant and appropriate diagrams and/or reference(s) to support your arguments. Remember to structure your response in the context of the question (rather than generalisation)||10|
|Conclusion||Clearly state your conclusion||2|
|Referencing||Based on the quality rather than quantity of the references and how well these references are used to support your arguments; either APA or Chicago system is fine, but ensure consistency in the referencing style throughout the assignment||2|
|Presentation||correctly labelled diagrams (if included); sentence structure and paragraph composition||3|
|Please read these documents before submitting your assignment.|
|UNE Assessment Rule|
Assessments will be marked and feedback provided in line with UNE’s Assessment Rule and Assessment Procedures. Students should also be aware of the University guidelines on Academic Integrity including University Rules on Academic Misconduct and Plagiarism. Information is available in the Student Coursework Academic Misconduct Rule and Student Coursework Academic Misconduct Procedures.
All assessment tasks are required to be submitted through the TurnItIn Originality checking service unless there are specific instructions in the Assessment Information that require an alternative submission process.