Jane McDonald is a 28-year-old solicitor at a prestigious law firm in Sydney. Jane rents a studio apartment near the Sydney central business district, paying $650 per week. She estimates her other living expenses amount to $24,000 per annum. She has an income of $95,000 per annum after tax. She has a balance in her savings account of $80,000, which she has accumulated since commencing full-time work at the age of 23.

She owns a late model 2016 Honda Civic and has no plans to purchase a new car. She has a credit card with a limit of $5,000, which she fully pays off each month.

Recently, Jane received an inheritance from her grandmother of $150,000. Jane is unsure what to do with these funds. She has always entertained the hope that one day she would be able to buy a property of her own, rather than paying, as she puts it, 'dead-end rent'. However, until recently this seemed an impossible dream.

Jane comes to you for advice relating to the following objectives:

• Is she able to buy her own property?
• Is it the right time to buy a property?
• Should she invest her cash elsewhere?

Jane is most concerned about making any decisions in light of the following factor which has been topics of discussion amongst friends and colleagues:

1. Labour market conditions

QUESTION:

You will need to link any of the above objective(s) to the factors. Please use one or more of the 3 objectives.

Impact of economic variables and government policies

Hints:

• As the focus in the question is on economic and financial policy, do not attempt to answer the question as if you were wearing a lending banker's hat. Noactualborrowing advice or financial calculations are required.The question is about the impact of economic variables and government policies, including fiscal policy.

Marking Guide:

• clear and concise description of each factor, including current conditions and expectations
• excellent understanding shown of how each factor impacts or influences one or more of the client objectives
• sound analysis of the influence of central bank and government policy on each of the factors
• evidence of external research with appropriate references

ANSWERS:

a) Factor 1: Labour market conditions

• Description(A description of the factor covering thecurrentmarket environmentapplicable to that factor - no historical analysis is required in the question)
• Impact(A focused explanation of how that factor could affect the objective(s).Write in the third person - this is not a personal note to Jane - just address the impacts as they affectJane's objective(s)) - HIGH RATE OF UNEMPLOYMENT?
• Government Fiscal Policy and RBA Monetary Policy(An explanation of how monetary and fiscal policy changes could influence the chosen objective)