Micro economics

Running head: Micro economics
MICRO ECONOMICS
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1
Micro economics
Table of Contents
Introduction................................................................................................................................2
Question 1: Valuation of dollar..................................................................................................2
Question 2: Recession & Depression.........................................................................................3
Question 3. Quantity demanded and quantity supplied.............................................................4
Question 4: Types of unemployment discuss key trends in Australian labour market..............6
Conclusion..................................................................................................................................7
Reference list..............................................................................................................................8

2
Micro economics
Introduction
The value of the money and rate of interest is helping in the development of resources
that will indulge the smooth movement in the financial market. The study is important in the
sense that it will increase the development of the policies that will definitely improve the
trade and commerce. The study is significant in the sense that using the value of nominal and
real inters rate the economy will be able to identify the value of money. On the other hand,
the importance of the valuation of money is going to identify the policies that the government
is aiming to identify the factors that are mainly helpful for the increase in the unemployment
rate. In order to identify the terms of trade and quantities that are going to be imported and
exported it is important for the economy to identify demand and quantity supplied.
Question 1: Valuation of dollar
a) The statement that most of the people says that dollar has lost the value is mainly
referring to the real valuation of any currency. Each currency is having two phase one is
nominal value and the other one is real values. The nominal value of any currency is the
amount that is printed on front of any currency, with the signature of authorisation from the
governor of any reserve bank or any other political head of the country (Cooter and Ulen,
2016). However, the real valuation of currency will determine the purchasing power parity of
the currency. The purchasing power parity will determined by the amount of goods and
services basket that the currency can purchase. The term “Dollar has lost its values” refers to
the degradation of valuation. Presence of inflation is one of the main reason that is going to
decrease the valuation of dollar.
b) Real and nominal interest rate
Nominal interest rate is the stated interest rate that the actual monetary price that the
borrowers will have to pay to the lenders to use their money. The main characteristics of this