Question

1. Suppose that an economy has the following labour market statistics.

Employed Persons (000s)	200
Unemployed Persons (000s)	20
Underemployed Persons (000s)	30
Working Age Population (000s)	280
Population (000s)	320

Calculate the unemployment rate.

Group of answer choices

A, 9.1%

B, 7.1%

C, 6.3%

D, 8.0%

2, Suppose that there are only 3 products that make up the total production in nation Doddria - Carrots, Hair Cuts and Sneakers.

The table below shows the quantity (Q) of each produced, as well as their market price (P) in 2018 and 2019.

	Q 2018	Q2019	P2018	P2019
Carrots	40	20	$2	$4
Hair Cuts	10	12	$60	$50
Sneakers	3	5	$80	$60

Calculate the growth in Real GDP from 2018 to 2019, using 2018 as the base year for prices.

Group of answer choices

16.7%

6.5%

26.1%

23.1%

3. Which of the following will cause Australia's Aggregate Demand curve to shift to the right?

Group of answer choices

A, An increase in the Australian price level

B, A decrease in the Australian price level

C, The Australian dollar depreciates

D, The Australian dollar appreciates

4. Which of the following would not shift the long run aggregate supply curve to the right?

Group of answer choices

A, New discoveries of natural resources

B, An increase in population

C, An improvement in technology

D, A decrease in the capital stock

5. One possible open market operation (OMO) that the RBA could use is to purchase government bonds from commercial banks. The RBA would use this type of OMO in what situation?

Group of answer choices

A, Only when they raise the cash rate target.

B, In response to an unexpected increase in money demand.

C, In response to an unexpected decrease in money demand.

D, Only when they lower the cash rate target.

Answer 1

1. Unemployment rate= Total unemployed/ Labor force

Labor force= Employed + Unemployed.

Underemployed is part of employed.

Employed=200,000

Underemployed = 30,000

Unemployed = 20,000

Employed = 200,000 + 30,000 = 230,000.

Labor Force = 230,000 + 20,000=250,000.

Unemployment rate = 20,000 / 250,000 =8%

					Nominal GDP	Real GDP (Base year)
	Base year 2018	2019	Expenditure in base year $	Expenditure in 2019 $	Expenditure in 2019 $
	Price ($ )	Quantity	Price ($ )	Quantity
Carrots	2.00	40	4.00	20	80	80	40
Hair cuts	60.00	10	50.00	12	600	600	720
Sneakers	80.00	3	60.00	5	240	300	400
					920	980	1160
Nominal GDP: the value of final goods and services at current prices
Real GDP: The value of final goods and services at base year prices
Base year	Nominal and Real GDP are same
1. Nominal GDP in the base year	$920
Nominal GDP in 2019		$1160
Real GDP in 2019 is $1160
2. Growth rate of real GDP from base year to current year
((Real GDP in 2019-Real GDP in base year)/Real GDP in base year))x100
((1160-920)/920))x100
(240/920)x100=0.2607 x100=26.1%