BU EC05903 Assessment Task 3 Assignment - Macroeconomics Instructions: This assignment contains four questions. You are required to answer all four questions. This is an individual piece of assessment. Make sure your submission is an original submission, this means it must be the creation of the person submitting it. You are required to explain your reasoning and use diagrams where appropriate. Due date: Your instructor will advise you of the submission date of this assessment task. Assignment to be submitted electronically in the drop box in your Moodle shell. Question 1 a) Give the definition of GDP and explain what items are not included in its calculation? What is the current environment in the USA and Australia? b) Define unemployment and its measurement. What is the current environment in the USA and Australia? c) Define inflation and its measurement. What is the current environment in the USA and Australia? Question 2 Assume that an economy is initially operating at the natural rate of output (full employment output). Use the AD-AS model to illustrate graphically the effects on price and output of a increase in government spending and an increase in the cash rate. Explain your assumptions with respect to the range of aggregate supply of your analysis. Question 3 Explain in detail the process of Monetary Policy transmission of an increase in the cash interest rate. Use relevant graphs to describe how a Central Bank's action on the interest cash rate ripple through the economy and lead to the target policy goal. (Three connected diagrams should be used: (1) money supply and demand (2) investment demand schedule (3) AS/AD diagram. Interest rates is the variable that connects the first and second diagram). Question 4 Using the World Bank's World Development Indicators database, https://databank.worldbank. org/home.aspx, a) Complete the following table. 2005 2007 2010 2015 2019 GDP per capita (current) Australia China India U.S. GDP growth rate Australia China India U.S. Inflation rate Australia China India U.S. b) Produce a plot for each variable (GDP, gdp growth, inflation) comparing the four countries.c) What can be inferred with respect to economic growth and price control in each of these economies? This period covers the pre and post Global Financial Crisis, and pre-Covid years