Macroeconomics: Assignment Sample

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Added on 2020-10-05

Macroeconomics: Assignment Sample

Added on 2020-10-05

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MACROECONOMICS

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Types of unemployment.....................................................................................................12. Advantages and disadvantage of flexible exchange rate regime and fixed exchange rateregime.....................................................................................................................................13. If Reserve Bank of Australia increases the interest rate then its affect on supply and demandof Australian dollars...............................................................................................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5

INTRODUCTIONMacroeconomics studies behaviour of whole economy instead of individual's behaviour.It deals with aggregate changes such as unemployment, national income, gross domestic product(GDP), gross national product (GNP) etc. In these questions, types of unemployment, advantagesand disadvantage of fixed and flexible exchange rate regime are discussed. This will study affectof increase in interest rates of Reserve Bank of Australia on supply and demand for Australiandollars. MAIN BODY1. Types of unemploymentUnemployment is a situation which occurs when a person is able and willing to do work,also actively looking but unable to find a job. There are four types of unemployment:Frictional unemployment:- As the name suggests, frictional unemployment is thesituation of unemployment occurs when a person is switching job or a graduate or a student whois just passed out from college or school so the time difference to find a new job refers tofrictional unemployment. This is generally occurs for a short period.Seasonal unemployment:- This kind of unemployment resulted due to changes inseasons. For example, farmers of a particular crop of winters or summers, ice cream vendors etc.So these people remain employed for a particular season only.Structural unemployment:- Structural unemployment occurs due to change intechnology or technical advancement or any other changes in production technology.Cyclical unemployment:- Cyclical unemployment and business cycle have inverserelationship. When business cycle is on boom then demand will also high resulted to low cyclicalunemployment. In the phase of depression, economic output tends to low which leads to rise incyclical unemployment. So this duration of unemployment due to underutilisation refers tocyclical unemployment.2. Advantages and disadvantage of flexible exchange rate regime and fixed exchange rate regimeFlexible exchange rate regime:- In flexible exchange rate system, exchange rate isascertained on the basis of change in supply and demand of a currency in respect to othercurrencies without any interference of Government or foreign exchange market. Current1

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