1.Using data from the Australian Bureau of Statistics (ABS) http://www.abs.gov.au/ collect information on the consumer price index (CPI) and average weekly earnings for the period 2005 to 2015 inclusive. Employ annual figures. Define and provide sources for the data obtained including the ABS catalogue number.
Calculate the rate of inflation based on the CPI and the rate of average weekly earnings growth and plot the inflation rate and weekly earnings growth on a single diagram using time on the horizontal axis. Provide an economic interpretation of these time series plots.
2.Employ the aggregate demand and supply model for the Australian economy, to analyse the consequences for real GDP and the general price level of the following scenarios. Confine your analysis to the short-run. In your response clearly state your assumptions and illustrate your answers with diagrams.
(a) the price of iron ore, a major export product, increases substantially,
(b) a favourable set of weather conditions leads to a substantial rise in Australian agricultural output,
(c) the government spends significant money in developing a broadband internet network across the country,
(d) the price of oil, a product Australia primarily imports, fall substantially.