1. Media reports that NZ Q3 2021 GDP dropped due to lockdowns but impact was less severe than the lockdown of 2020. This is purely based on comparison of GDP over 2020-2021. Explain briefly why this may not reflect the actual impact on welfare and economic wellbeing experienced in the country as a result of the pandemic. You can draw on the knowledge of alternative measures of GDP as discussed in lectures.
2. New Zealand's official unemployment rate has been falling in 2021. Does this mean there has been an improvement in the labour market? Explain your answer, drawing on the definition of unemployment rate.

3.Under a fractional reserve system, banks keep a percentage of deposits as reserves and lend the rest out.

Suppose that banks hold five percent of deposits as cash reserves and that the public holds no cash (all money is held as bank deposits). Show, using the T-accounts for the banking sector, the effect of a $100 deposit. Be sure to show the mechanics of the system, and the final balances for (i) deposits, (ii) cash reserves, and (iii)loans.