• April 27th, 2016


Paper, Order, or Assignment Requirements

answering the questions in the gray blank, don’t need to rewrite the Questions.

  1. Part A: Macroeconomic Forecasting


Question A.1.

Provide forecasts for the variables listed below by inserting a number in the grey box. (Note: this question will be evaluated as part of Question B.1)



Data source or where the data can be found Release or forecast date Forecast
   CPI (y/y % chg. in 2016Q1) ABS (http://www.abs.gov.au/ausstats/abs@.nsf/mf/6401.0) 27 Apr 2016 0.5% chg.
   Unemployment Rate (% of labour force, seasonally adjusted, March 2016) ABS (http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0) 14 Apr 2016 5.9%
   ASX200 Share Index (http://www.bloomberg.com/quote/AS51:IND) 27 Apr 2016

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   Australian Dollar vs US Dollar (No. of USD to buy 1 AUD) (http://www.bloomberg.com/quote/AUDUSD:CUR) 27 Apr 2016

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  1. Part B: Macroeconomic Analysis


Question B.1:

Discuss how your forecasts compared with the actual numbers, any errors and why? What are the implications of the data for fiscal and monetary policy makers in Australia and in particular, is the data likely to lead to a change in monetary or fiscal policy settings? (5 marks, 200 word limit)





Question B.2.

Briefly outline how the global economy, and recent global economic events, have impacted and are impacting on the Australian economy? (5 marks, 200 word limit)





Question B.3:

Referring to Figure 1.7 in the textbook (Dornbusch, Bodman, Fischer and Statz, 2013) and lecture notes; at what point do you think the Australian economy is at in the business cycle? In your answer outline whether you think the economy is performing above or below potential GDP, what the normal level of GDP and CPI growth is, what you think is the natural rate of unemployment (NRU) and why. (5 marks, 200 word limit)





Question B.4:

Discuss one major risk to the Australian economy from the demand side and one major risk on the supply side. That is, discuss two events which, were they to occur, would negatively affect aggregated demand (AD) and aggregate supply (AS) respectively leading to higher unemployment. Also, discuss your assessment of the probability of each event occurring. (5 marks, 200 word limit)





Question B.5:

What is your expectation regarding the performance of the Australian economy over the next 10 to 20 years with regard to GDP growth? How will it perform compared with the previous couple of decades? Discuss with reference to the growth drivers such as; technology, population and ageing, physical capital, human capital and natural resources? (5 marks, 200 word limit)




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