Question 3) For each of the following scenarios, determine which type of unemployment is relevant a. As a consequence of the Great Recession (2007-09) in the US, John lost his job as his employer went out of business. b. Peter has just graduated from university. He is actively looking for a job but has not found one yet. c. Adam used to work in a car factory. He has been out of work since the last car factory in Australia (Toyota Altona, Melbourne) was closed Question 4) Consider a simple economy in which there are only three products. In the table below, data regarding typical household consumption are shown for three different years: 2016, 2017 and 2018. 2016 2017 2018 (BASE YEAR) PRODUCT QUANTITY PRICE PRICE PRICE Haircuts 2 $20.00 $22.00 $25.00 Hamburgers 10 4.00 4.20 4.50 DVDs 6 15.00 15.00 14.00 a. Calculate the Consumer Price Index (CPI) in 2016, 2017 & 2018. Assume that 2016 is the base year b. Calculate the inflation rate in 2018 Question 5) The paradox of inflation and cost of living. Even prior to the current pandemic and the consequent economic toll, Australian households were reportedly grappling with "rising costs of living". Households' budgets were increasingly squeezed as costs rose significantly while income could not catch up. This, however, stands in stark contrast with the reported inflation rate. Inflation rate has remained noticeably low, not exceeding 2.1% for every single quarter since 2015. This indicates only slight increases in prices. If inflation is indeed the measurement for changes in prices as it appears to, why have Australians faced a "cost of living" problem while the inflation rate has been very modest? In order to answer this question, you will find the following resources very helpful. ABC News: Inflation may be low but cost of living is rising (Janda 2019) The Money Podcast on ABC: Cost of living (Aedy 2019) Report by the Australia Bureau Statistics: Selected Living Cost Indexes