Question 1

(a)Go to theAustralian Bureau of Statistics websiteand find and report the Seasonally Adjusted percentage change from the Sep Quarter 2020 to the Dec Quarter 2020 Chain volume GDP; and the Dec Quarter 2019 to Dec Quarter 2020. (1 mark)

(b)Now find the ABS data for the Consumer Price Index, specifically report the Seasonally Adjusted All Groups CPI figures from the Sep Quarter 2020 to the Dec Quarter 2020; and the Dec Quarter 2019 to Dec Quarter 2020. (1 mark)

(c)What are the three categories that experienced the most significant price rises during the December quarter 2020? Discuss whether, given your usual consumption bundle, you were likely better or worse off in December 2020 compared to September 2020. (1 mark)

Question 2

Read this news article to help answer the questions below.

Australia's economic recovery continues with 3.1% growth in December quarter

https://www.theguardian.com/business/2021/mar/03/australias-economic-recovery-continues-with-31-growth-in-december-quarter

(a)Based on the article, what have contributed to 3.1% growth in the December quarter? Focus on the change of the four major components of GDP. (2 marks)

(b)Draw an AS-AD diagram for Australia's economy, showing an initial long run equilibrium first. Then explain the impact of the increased investment on output and inflation in the short-run, including showing this on your AS-AD diagram. (3 marks)

(c)Use a new diagram to help explain what happens to output and inflation in Australia in the short run when Australians can travel overseas, assuming everything else stays the same. (2 marks)