Question
Analysing economic data - is there any good news? The following are economic data for New Zealand in 2016 and in 2017. 2016 2017 Unemployment
Analysing economic data - is there any good news?
The following are economic data for New Zealand in 2016 and in 2017.
2016 | 2017 | |
Unemployment rate | 4.6 | 4.7 |
Inflation rate | 0.65 | 1.85 |
Economic growth rate | 4.2 | 3.8 |
Source: Reserve Bank of New Zealand. 2021.https://www.stats.govt.nz/topics/economy
Consider the data for 2016 and 2017 shown in the table above. Use your knowledge of the short-run AD-AS model to graph the changes in output and inflation between 2016 and 2017. Should the Reserve Bank of New Zealand (RBNZ) consider lowering interest rate as its monetary-policy stance to address the economic problems shown in the table and graph? Explain your answer.
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