Question 1D

Australia GDP increases from $2650 billion in 2021 to $2730 billion in 2022. Also suppose that using 2017 as the reference year, real GDP in 2021 was $2550 billion, and in 2022 it was $2680 billion. What would you say was Australia's economic growth from 2021 to 2022?

Use the data in part (a) to calculate implicit price deflator values for 2021 and 2022, and then calculate a broad-based measure of inflation in Australia between 2021 and 2022.

Question 1E

How does the Australian government utilise fiscal and/or monetary policies used to mitigate recent inflation? Explain your answer. Support this explanation with an example - you may need to use numbers and figures.

Question 1F

If actual real GDP moves from being well below potential GDP to being just below potential GDP, does the GDP gap increase or reduce, and what would you say might be the impact on measured unemployment from such a movement?

Question 1G

Explain how the market demand curve for a 'normal' good will shift (i.e. left, right or no shift) in each of the following cases? What then will happen to the equilibrium price and quantity?

(a)  The price of a substitute good falls

(b)  The price of a complementary good falls

(c)  The price of the good decreases

(d)  Tastes shift away from the good