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Economics Assignment Solution (pdf)

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Added on  2021-06-17

Economics Assignment Solution (pdf)

   Added on 2021-06-17

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Running head: ECONOMICS ASSIGNMENT Economics AssignmentName of the StudentName of the UniversityAuthor Note
Economics Assignment Solution (pdf)_1
ECONOMICS ASSIGNMENT 1Table of ContentsAnswer 1....................................................................................................................................2Answer 2....................................................................................................................................4References................................................................................................................................10
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ECONOMICS ASSIGNMENT 2Answer 1 The performance of an economy is determined by the dynamics in the differenteconomic indicators of the economy with time. The primary indicators for analysing andinterpreting the performance of the economy of a country are the GDP growth rate, the rate ofinflation, unemployment rate and others. While the rate of inflation shows the increase in theaverage level of price of commodities and services in a country over time, the rate ofunemployment measures the dynamics in the labour market and the changes in the number ofeligible yet unemployed people in a country within a particular period (Burda & Wyplosz,2013). In this context, the relationship between the inflation rate and the unemployment rateof Australia, in the time span of 2001 and 2016, can be seen to be as follows: 44.555.566.5700.511.522.533.544.55Inflation Rate and Unemployment Rate Unemployment Rate InflationrateFigure 1: Relationship between inflation rate and rate of unemployment in Australia(2001-2016)(Source: Abs.gov.au, 2018)
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ECONOMICS ASSIGNMENT 3As is evident from the above figure, there roughly exists an inverse relationshipbetween the inflation rate and unemployment rate in the country, with the unemployment ratedecreasing with an increase in inflation rate and vice versa. This can be found to be inaccordance to the theory of Phillip’s Curve, which also asserts the inverse relationshipbetween these two variables: Figure 2: Phillip’s Curve(Source: Mankiw, 2014)This implies that with the decrease in the unemployment, the economic abundance ofpeople increases which in turn increases the aggregate demand in the economy, therebyincreasing the overall price levels indicating towards the increase in the inflation rate in theeconomy, as is evident from the empirical evidences of Australia (Heijdra, 2017).
Economics Assignment Solution (pdf)_4

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