Economics Development - Assignment

   

Added on  2021-05-27

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Running head: ECONOMICS ASSIGNMENT Economics AssignmentName of the StudentName of the UniversityAuthor Note
Economics Development - Assignment_1
ECONOMICS ASSIGNMENT 1Table of ContentsAnswer 1....................................................................................................................................2Answer 2....................................................................................................................................4References................................................................................................................................11
Economics Development - Assignment_2
ECONOMICS ASSIGNMENT 2Answer 1 Inflation and unemployment are the two most significant macroeconomic indicatorsof any country or region, whose dynamics and trends considerably explains the performanceof the economy at a point of time, along with other indicators like that of the growth of GDP,exchange rates and others. The rate of inflation, in a country, at a point of time, shows theaverage price levels prevailing in the country at that particular point of time (Mankiw, 2014).Thus, a very high inflation rate indicates towards the presence of very high prices of goodsand services in an economy, which in turn may be painful for the population of the country inconcern. On the other hand, a very low rate of inflation points towards the presence of lowlevels of prices in the economy, which in turn may discourage the suppliers of goods andservices to produce more, thereby decreasing the productivity in the country, which may giverise to a stagnation or recessionary situation (Burda & Wyplosz, 2013). Keeping this into consideration and taking into account the importance of these twovariables and their dynamics on the economic well-being of any country, this section of theassignment tires to analyse the trends in the rate of inflation and the rate of unemploymentprevailing in the globally robust and predominant economy of Australia, within the time spanof 2001 and 2016 and also tries to interpret whether there exists any relationship or linkagebetween the same. The trend can be seen as follows:
Economics Development - Assignment_3
ECONOMICS ASSIGNMENT 344.555.566.5700.511.522.533.544.55Inflation and Unemployment Rate (2001-2016)Unemployment Rate InflationrateFigure 1: Inflation rate and unemployment rate and their relationship in Australia(2001-2016)(Source: Abs.gov.au, 2018)From the above figure, only by observing the scattered plots it cannot be assertedwhether there is a linkage between the two concerned variables in the country within theconcerned period. However, if the trend line is seen, it can be observed that there roughlyexists a negative relationship between the inflation rate and the rate of unemployment in thecountry, that is high inflation rates in Australia can be seen to be associated with lowunemployment and vice versa for the country. Theoretical Interpretation The inverse relationship between inflation and unemployment, as can be seen to beexisting in Australia can be explained with the help of the Phillip’s Curve Theory, whichasserts that in general there exist a negative relationship between inflation and unemploymentin a country, which can be seen from the following figure:
Economics Development - Assignment_4

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