Reference no: EM132313915

Part A: Microeconomics

Why did our banks survive the Global Financial Crisis? By Stephen King

Use the article on banks and the global financial crisis to answer the following questions.

1. What type of market do Australian Banks operate in? How has the Global Financial Crisis affected competition in this market? Explain your answer.

2. Assume the biggest four banks in Australia decided to collude and agree to charge a high price on banking products. Graphically demonstrate the price and output in this market and explain your diagram.

3. How and why is the government seeking to increase competition in the banking sector? Explain your answer with reference to the diagram you constructed in Question 2.

4. Briefly describe what triggers entry in a competitive market and the process that ends further entry. Use a graph in your explanation.

Part B: Macroeconomics
Consider the following three sources of macroeconomic analysis and data.

Source 1: Fiscal and monetary policy-renewed international debate by Robert Dolamore, Economics

Source 2: Disastrous jobs data will create more work for the RBA by Callam Pickering

Source 3: Economic Data (Trading Economics)

Use the three sources to answer the following questions.

1. Explain how "discretionary fiscal policy" can be "countercyclical" and be used to support aggregate demand. Use an AD/AS model to support your answer.

2. Use an AD/AS model to demonstrate where the Australian economy was operating in 2014 in relation to full employment and explain the reasons for this. Based on your diagram, the above sources and your own research what phase of the business cycle do you think the Australian economy was in? Explain your reasoning.

3. Based on your research, evaluate the fiscal policy the government is pursuing. Do you believe this is appropriate given the state of the economy? Why or why not? Use an AD/AS diagram in your discussion.

4. Based on your research, evaluate the monetary policy the RBA is pursuing. Do you believe this is appropriate given the state of the economy? Why or why not? Use an AD/AS diagram in your discussion.

5. What effect do you think the lower dollar could have on inflation in Australia? Why? If in 2015 inflation rose to 4% and unemployment rose to 7% what fiscal policy would you advise the government to pursue? Why? Demonstrate the effects of your proposed policy using an AD/AS model.

Do not forget to include a reference list for any sources apart from lectures or tutorials. You also need to include in text references. A referencing guide is available on the portal under assessments.

Attachment:- economics assignment.rar