ECO130 Short Answers 2 on Business Economics Assessment Item 4 Answer

Answer all four (4) questions. Maximum of 500 words for each question.  Use diagrams where appropriate to enhance and explain your response.  Provide supporting evidence and references where appropriate to justify your arguments.

Question 1

Suppose the following table provides a national accounting date for the  'Greenland' economy. 

(a).  Using the expenditure approach, calculate :          

(i).   Greenland's GDP (gross domestic product)  and NDP (net domestic product)                           

(ii).  Greenland's GNI (gross national income and GDI (gross disposable income)                          

(b).   "GDP does not represent peoples' well being".  Do you agree with this statement,  briefly outline the reasons? 

Question 2

(a).  Briefly explain the four main types of unemployment.  Which one of these four can better be used to explain the massive job losses that occurred due to Covid-19 health pandemic.

(b).  It has been reported that the  GDP growth of the Australian economy has declined massively due to Covid-19 leading to an unprecedented GDP gap. Explain the GDP gap using a Business Cycle graph (you do not need data to draw this graph).

(c).  What causes the difference between 'Real income' and 'Nominal income'?  Provide a worked-out example to explain the difference between these two concepts.

Question 3

(a).  The magnitude of the impact of a given change in the  AD (aggregate demand) on P (price level) and the Real GDP depends on the shape of the AS (aggregate supply curve). Explain your answer using a graph (with AD and AS curves on the same graph).

(b). Using two separate graphs, briefly explain the difference between Demand-pull inflation and Cost-push inflation. 

Question 4 

Use a graph to explain the impact of each of the following events on the Australian economy. Illustrate which curve (AD or AS) is impacted (that is whether it is a shift or a movement along the curve). Consider each of these events are not inter-related.

(a).  Consumption and Investment drastically declined in the economy due to Covid-19.

(b).  Recent droughts and bush fires caused massive destruction to farm/agricultural production.

(c).  The world oil price has declined and it is expected to remain low over a longer period of time.  

(d).  Analysts predict a massive decline in Australian exports to China which is Australia's major trading partner.

This assessment task will assess the following learning outcome/s:

• be able to apply economic concepts and principles to daily life.
• be able to explain the economic decision making of producers and consumers and their interaction in the market place.
• be able to describe fiscal and monetary policy in Australia.
• be able to construct graphs and diagrams to demonstrate how economic concepts and principles work in practice.
• be able to analyse the impact of monetary and fiscal policy on major economic variables such as inflation, unemployment and gross domestic product.

GRADUATE LEARNING OUTCOMES

This task also contributes to the assessment of the following CSU Graduate Learning Outcome/s:

• Academic Literacy and Numeracy (Knowledge) - Charles Sturt Graduates understand the use and structure of appropriate language in written, oral, visual, mathematical, and multi-modal communication.
• Academic Literacy and Numeracy (Skill) - Charles Sturt Graduates demonstrate the literacy and numeracy skills necessary to understand and interpret information and communicate effectively according to the context.
• Academic Literacy and Numeracy (Application) - Charles Sturt Graduates consider the context, purpose, and audience when gathering, interpreting, constructing, and presenting information.