Economics Study Material

Running head: ECONOMICS
Economics
Name of the student
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2ECONOMICS
Table of Contents
Answer 1....................................................................................................................................3
Answer 2....................................................................................................................................3
Answer 3....................................................................................................................................3
Answer 4....................................................................................................................................4
Answer 5....................................................................................................................................5
Answer 6....................................................................................................................................5
Answer 7....................................................................................................................................6
Reference list..............................................................................................................................7

3ECONOMICS
Answer 1
The various types of unemployment are :
a) Cyclical unemployment: this type of unemployment takes place when the workers
lose their jobs due to downturns in the business cycle.
b) Frictional unemployment: this type of unemployment takes place when worker has
left his job and is in search of another one.
c) Structural unemployment: structural unemployment results when there is a mismatch
between the available jobs and the level of skills of the unemployed (Ezzy 2017).
d) Natural rate of unemployment: this is the lowest level of unemployment an economy
can reach.
Answer 2
Money is a kind of item which is generally accepted for the services or goods in a
particular country. There are four types of money which is fiat money, fiduciary money,
commodity money and commercial bank money. Money is the medium of exchange which is
accepted during making any kind of transactions (Brunnermeier and Sannikov 2016). Money
also acts as store of value, unit of accounting and medium of exchange. The measures of
money supply are M0, M1, M2 and M3.
Answer 3
The Australian monetary system does not require any minimum reserves of its banks.
One of the main policy of the Reserve Bank of Australians to maintain an inflation rate of
around 2 percent which does not hamper the economy. There is absence of regulatory
requirement for banks for holding exchange settlement funds in Australia (Bade and Parkin
2015). The domestic market operations made by the Reserve Bank are mostly carried out by