Assesment Ecconomics

ASSESMENT 3

Obtain data on key macroeconomic indicators of the Australian economy: real GDP, unemployment rate, budget deficit/surplus, interest rate (cash rate) and exchange rates (US$/A$) from 1st July 2001 – 30th June 2020. Then, use graphs, tables, and statistical summaries to answer the following questions:

(1) Evaluate the fiscal position of the Australian Federal Government in relation to the cash rate from 1st July 2001 to 30th June 2020. Briefly describe how you expect this to move in relation to the cash rate over time.

(2) How has the movements in the fiscal position and cash rate from 1st July 2001 to 30th June 2020 discussed in (1) influenced the unemployment rate in the same period?

(3) Briefly describe the movements in the target cash rate from 1st July 2001 to 30th June 2020. How has the movements in the cash rate influenced the value of the Australian dollar in the foreign exchange market?

(4) Given the insights gained from (1) – (3), do you think that the Australian government’s unprecedented fiscal spending during the COVID-19 pandemic would help the economy to recover faster than otherwise?

Critically discuss. Students need to support their analysis with a minimum of 10 academic journal articles plus the text. Students aiming for a Credit or higher grade will need to use more sources. Articles should be relevant and recent. Non-academic journal sources may also be used, but relevance and validity should be clarified with the lecturer/tutor.

Recommended sources of data are:

• www.abs.gov.au

• www.rba.gov.au

• www.imf.org

• www.worldbank.org.

• http://datatopics.worldbank.org/world-development-indicators/

However, data may also be obtained from other credible sources. Also, recommended readings for government policies include: • Statement on Monetary Policy of the Reserve Bank of Australia for insights of monetary policies in Australia. https://www.rba.gov.au/publications/smp/ • Budget documents for insights of fiscal policies in Australia. https://budget.gov.au/2019-20/content/documents.htm https://archive.budget.gov.au/ (Budget documents for the past years)