Here are some of the students’ questions from in-tutorial task 3.

These questions are

posted as they produced by student groups in class. These can be used as discussion
points for revision of a particular concept.
1. What happens to the Oz economy if there is a recession in the US?
2. What would happen to GDP if the stock market crashes?
3. What’s the relationship between inflation and unemployment?
4. What is the likely impact of cuts in real interest rates on the level of unemployment?
5. What determinants influence the value of beta in Okun’s law?
6. Why might the CPI overstate the rate of inflation?
7. How long does it take for frictional u/e to become structural u/e?
8. What would be the impact of negative interest rate on u/e?
9. How does lower interest rates affect u/e?
10. What is the effect of deflation?
11. What will happen to other countries GDP and u/e if the trade war between US and
China continues?
12. Draw a graph explaining the business cycle
13. How do migrant workers affect u/e?
14. How does inflation affect the labour market model?
15. Is it possible for high u/e and high inflation to coexist?
16. What is the significance of an inverted yield curve?
17. If u/e is higher than u*, is the economy in a contraction or expansion?
18. Forecast the performance of the Australian over the next 10 years
19. Explain the relationship between GDP, inflation and u/e
20. Despite high levels of employment, that macroeconomic factors have resulted in low
wage growth in Oz.
21. The workers are protesting in increase their low income. If they receive an increase in
their wage, will if impact the nominal wage or the real wage?
22. What is the relationship between potential output and the labour market?
23. What factors do the RBA consider in monetary policy?
24. What is the difference between unemployment and underemployment?
25. What is the relationship between GDP and CPI in terms of what they measure?
26. What does this π = p ∙ F ( k )−( r + δ ) K descirbe?
27. How exactly does inflation cause noise in the market and what does the “noise”
mean?
28. What is “slack” in the economy?
29. Why has investment in computers increased so much in recent decades?
30. What is the relationship between interest rate and unemployment?
31. What is the relationship between budget deficit and the real interest rate?
32. How does the shift of the employment in a sector affect the employment in other
sectors?
33. If the public become less concerned about saving, how will if affect investment and
economic growth?
34. What is the relationship between unemployment and inflation and how does this
change from the short run to the long run
35. Is it possible to have high levels of unemployment and a sustained inflation?
36. What determines α from the Cobb-Douglas and β from Okun’s law?
37. What is α in the Cobb-Douglas production function
38. How would inflation in the US affect Australia and China?
39. What is the relationship between capital and investment?
40. As a cost of inflation, unexpected redistribution of wealth damages which interest
more? Why?
41. What is the relationship between inflation and unemployment?
42. Discuss the difference between private and public saving
43. Is CPI and price level the same thing?
44. Is nominal GDP an accurate representation of an economy’s performance?
45. What are the problems with measuring inflation using the CPI?
46. Could inflation cause deflation?
47. Why is deflation costly to an economy?
48. Can GDP be used to measure the price level like CPI? If yes, which one is better?
Why?
49. How does increased depreciation rate affect the level of savings?
50. What is the effect of minimum wage to the unemployment rate?
51. How would a sudden increase in inflation or an increase/decrease in interest rates
impact the GDP of the country?
52. What is the difference between stocks and flows? Provide examples.
53. The CPI doesn’t include the price changes of __________ (imported/exported) goods.
(Fill in the gap with one of the two options)
54. Working age population: 21 million; Employed: 14 million; Unemployed: 0.4 million.
Calculate: a) participation rate, b) unemployment rate. Given your calculations, which
of these economic events is more likely to be occurring? GFC / mining boom /
recession
55. Explain why the unemployment rate does not adequately represent the spare capacity
in the labour force.
56. The production function if given as F(k) = k^0.5, market price is $10 per unit, interest
rate is 5%, depreciation rate of equipment is 6%. What is the profit maximising
capital level of the firm?
57. What is the effect of high inflation on the economy?
58. Why does high inflation trigger an increase in interest rates?
59. What is the effect of a rise in potential output on the unemployment rate?
60. Is GDP or unemployment a better indicator of the economy and why?
61. Recently the RBA lowered interest rates to a record low 1.00%. Using graphs and
relevant formulas, describe how this change is expected to influence each of the
following: a) labour force participation, b) GDP, c) inflation, d) unemployment
62. Explain the effects of a recession.
63. In an open economy, if national savings exceed investment, what does it imply about
the relationship between export and import?
64. Which one is not included in aggregate expenditure? a) Government purchase, b)
Taxation, c) Net exports, d) Investment
65. Design a quality of life index taking into account: standing of living; education;
unemployment; inflation; any other factors you feel necessary
66. Does increase in real interest rates reduce the quantity of saving demanded?
67. Does high productivity affect inflation rates?
68. Larry’s wage has increased by 4%, meanwhile his purchasing power has increased by
12.3%. What is the implied inflation rate?
69. What happens if the government subsidises 15-19 year old’s wages (refer to question
1 of Tutorial 3)?
70. How does the participation rate increase but unemployment rate decrease?
71. If there is an increase in export demand, what should happen to cyclical
unemployment?
72. Define unemployment rate, labour force and labour force participation.
73. Describe the different type of unemployment and give the reasons why they may
occur.
74. What is the difference between relative price and inflation
75. In 2018 the minimum wage increases from 150 to 180, while the prices of necessary
goods and services increase from 75 to 90. Under this circumstances, are employees
earning minimum wage better of or worse off?
76. What is the diference between Nominal and Real GDP and Chain Volume Index.
77. Why does the business cycle fluctuate and not continuously go through a period of
contraction or expansion.
78. What are the factors that shifts the demand and supply curve in the labor market?
79. how can lowering the interest rate affect the labor market equilibrium.
80. Examine the cost of Hyperinflation.
81. What are the factors that shift labour supply curve? (Please state at least 3 factors)
82. What are the factors that contribute to imperfect competition in the labour market?
83. Discuss the costs of inflation.
84. What is the problem with just using a base year to calculate inflation and not ‘better’
chain weighted measures?
85. Is GDP a good indicator or measure of living standards?
86. What is the effect of an increase in government budget deficit on national savings and
investment?
87. In measuring GDP using expenditure method, explain how inventories are treated?
Why are they treated this way?
88. How do we define working age population and employment rate?
89. Given a production function, Y=F(K,L), how do we calculate MPK and MPL?
90. What are the factors that causes a shift in the labour demand curve?
91. When we have inflation, why do we divide wealth by the compounded inflation
amount?
92. What is the effect of an increase in government budget surplus on national savings
and investment?
93. What are the components of GDP?
94. What does the Second Order Condition of the Production Function with respect of
Capital and Labour tells us?
95. How/why is the calculation for inflation different from the concepts for Future and
Present Value of assets/wealth?
96. Is inflation a good measure of standard of living?
97. If we have working age population as 31.257 million, employed population as 15.75
million, and unemployed population as 0.985 million, calculate the size of the
population that is of working age but not active in the labour force?; What is the
employment rate?; What is the labour force participation rate?
98. Why are chain volume measures preferred compared to base year?
99. Explain diminishing Marginal Product of Labour (MPL)? How does a country end up
experiencing hyperinflation?