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BSD113-Economics

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Question:

On February 20 this year, the International Monetary Fund (IMF) stated that "wage growth is weak and inflation is below its target range" for the Australian economy. What risks does a slow growth rate in wages pose to the Australian economy, and why are economists and governments so eager to see a general rise in wages for everyone?

The following theories in Macroeconomics may be used to analyse this topic:

  • Aggregate Demand and Aggregate Supply
  • Unemployment
  • Inflation
  • The RBA
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