The economy of Australia and China and the business cycle, Unemployment and Inflation in both economy,
Data for the AUD is the USD per AUD; In 2019 1 AUD = 0.685 of a USD.
RMB is the RMB per USD; In 2019 1 USD = 6.75RMB.
Macro1 Macroeconomics 1 (ECON1246 / ECON1273), Semester 1 2020 MACROECONOMICS 1 (ECON1246 ECON1273) Assessment 2 Submit online at the ‘Assignment’ folder in Canvas by: Friday 15 May at 6 PM The Task An individual assignment that will cover a comparison of the performance of the Australian and Chinese economies in recent years. It will include a conclusion comprising a brief analysis for an international business enterprise. You are to complete it in a report format. It will assess the following topics and learning outcomes 1 to 8. · GDP and the business cycle – Topic 3 · Aggregate Demand / Aggregate Supply – The Product Market – Topic 4 · Inflation – Topic 5 · Unemployment and the Labour Force – Topic 6 · Exchange rate market – Topic 7 Your Report is to take the following format Instructions This assessment contributes 40% of the overall marks for the course. Only a single attempt of submission is permitted. Please ensure to attach the final version of the assessment. · Attach your report to the Assessment cover page. Do not write the questions or attach this page to your submission. The cover sheet is in the Assignment folder. Submit using either word or PDF format. The font size has to be at least 11. · Explain your answers, but be succinct (brief and relevant). Label each axis and explain the diagram that you use carefully. Show all of your working in order to get partial credits. · After the due date any late submission will be marked as ‘late’. A penalty of 10% of the allocated marks (i.e., 2 marks) per day will apply for late submissions. · Referencing and Acknowledgement of sources. Students are required to acknowledge all sources of information and to include a contents page and bibliography of cited texts. For guidelines on referencing, see a document on Canvas (Assignments | Assessment Task 2: titled, “Guidelines for Referencing.” Note that material and answers that are not acknowledged or correctly referenced will not be considered for assessment. Use footnotes where you have referred to RMIT notes and or articles listed below or other written material. · Completion of Micro-credential The assessment will require you to add evidence of the completion of the RMIT micro-credential (Academic Integrity Awareness) which is designed to increase your understanding of academic integrity in assessment practices by: 1. Acknowledging that the RMIT community has expectations around academic integrity. 2. Identify appropriate referencing techniques. · Note on Plagiarism: You cannot just copy your friend’s answers. This is considered academic plagiarism. See ‘students responsibilities’ at RMIT’s policy on this: http://www1.rmit.edu.au/browse;ID=sg4yfqzod48g1 Data, fact sheets, links and notes related to the assignment. These are available in Assignment folder, Assessment 2. Examine the data relating to the economies of Australia and China and answer Parts A to D. The Report Part A Australian and Chinese business cycle. 1. Complete the table / data for both Australia and China and include this as an attachment to your report. Answers must be accurate to two decimal places. 2. What phase of the business cycle was the Australian economy in over the period 2018 to 2019? Briefly explain. What contribution did the following components of Aggregate Demand; Consumption spending, Investment spending and Net exports make to the cycle over this period? 3. What phase of the business cycle was the Chinese economy in over the period 2018 to 2019? Briefly explain. What contribution did the following components of Aggregate Demand; Consumption spending, Investment spending and Net exports make to the cycle over this period? (4 + 3 + 3 = 10 marks) Part B Unemployment and its causes for Australia and China. 1. What was the likely cause of the change in the unemployment rate in 2019 for Australia? What type of unemployment is likely to exist in Australia in 2019? In your answer make reference to the RBA extract “Statement on monetary policy” Feb 2020 p32-33 on employment growth, available on canvas. 2. What was the likely cause of the change in the unemployment rate in 2019 for China? What type of unemployment is likely to exist in China in 2019? Explain your answer, making reference to the article “Chinese unemployment worries….stimulus” available on canvas. (3.5 + 3.5 = 7 marks) Part C Inflation and its causes for Australia and China. 1. Using the GDP Deflator identify and explain the likely cause of inflation / deflation for Australia in 2019? Include in your answer the contribution that export and import prices made to inflation / deflation in 2019. 2. Using the GDP Deflator identify and explain the likely cause of inflation / deflation for China in 2019? Include in your answer the contribution that export and import prices made to inflation / deflation in 2019. (4 + 4 = 8 marks) Part D Conclusion and analysis: Report to international business enterprise. Assume you are required to provide a brief (200 word) summary / analysis to a small to medium sized international firm on 3 key strengths and / or weakness of either the Australian or Chinese economy. The firm is deciding whether to expand its current business interests in either country. You must include the impact of the change in the exchange rate of the country you have chosen, a key consideration for the firm. Based solely on the data and information you have provided above your task is to complete this summary. (9 marks) PART E Formatting including a contents page, referencing, bibliography and footnotes. (3 marks) PART F Completion of Micro-credential Attach evidence of the completion of the RMIT micro-credential (Academic Integrity Awareness) which is designed to increase your understanding of academic integrity in assessment practices by 1. Acknowledging that the RMIT community has expectations around academic integrity. 2. Identify appropriate referencing techniques. (3 marks) Suggested word limits: PART A 75 x 2 = 150 words PART B 100 x 2 = 200 words PART C 100 x 2 = 200 words PART D 200 words Suggested time lines / completion dates Part A – 10 April Part B – 17 April Part C – 24 April Part E Microcredential – 1 May Part D – 8 May Due date 15 May Course Learning Outcomes 1. Describe the operation of the Australian economy to apply in various contemporary macroeconomic issues. 2. Read and critically evaluate current economic news articles as they relate to the Macroeconomy. 3. Assess how government policies and changing macroeconomic conditions affect societal welfare. 4. Demonstrate an understanding of recent economic events and their impact on current policy initiatives on the Australian economy. 5. Interpret charts, graphs, and tables and use the information to make informed judgments. 6. Work and learn independently and work as a team. 7. Communicate macroeconomics concepts and issues effective in a variety of business contexts. 8. Evaluate business outcomes based on the costs and benefits involved. D 1 Contents page Part A Introduction The economy of Australia and China and the business cycle. PART B Unemployment in both economies. PART C Inflation in both economies. PART D Conclusion and analysis. PART E Formatting including a contents page, referencing, bibliography and footnotes. PART F Evidence of completion of microcredential (Academic Integrity Awareness) Page 1 of 4 https://www.cnbc.com/2019/01/16/unemployment-worries-in-china-grow-as-beijing-beefs-up-stimulus.html Chinese unemployment worries are growing as Beijing beefs up stimulus PUBLISHED WED, JAN 16 2019 Evelyn Cheng@CHENGEVELYN KEY POINTS • The greatest risk to China’s growth in the near term is rising unemployment around the Lunar New Year, J.P. Morgan’s chief China economist, Haibin Zhu, says in a Monday report. • Job losses in manufacturing accelerated in mid-2018, after the U.S. imposed tariffs on Chinese goods, points out Gavekal Dragonomics China Consumer Analyst Ernan Cui. • However, ManpowerGroup’s first-quarter employment outlook survey indicates the overall labor market may be at least stabilizing. Chinese workers at a cloth factory in Huaibei, China. Jie Zhao | Corbis | Getty Images Beijing is working hard to stop a slowing Chinese economy from hitting its workforce. In the last several weeks authorities have made a flurry of announcements, including tax cuts, monetary policy loosening and plans to support public spending. The push comes as economic data points to sagging domestic growth and the U.S. looks set to keep up the pressure on trade. Amid that environment, worries of widespread job losses won’t help the already gloomy sentiment that’s giving consumers a second thought on spending. The overarching worry for China’s leaders is that unemployment could lead to social unrest, and deeper questioning of the Communist Party’s claim to having a handle on the best interests of the country. Already, the economy is widely expected to slow from around 6.5 percent growth to just above 6 percent. “We think the biggest risk in the near term is rising unemployment around the Lunar New Year,” Haibin Zhu, chief China economist and head of China equity strategy, J.P. Morgan, said in a Monday report. Job losses in Chinese manufacturing accelerated in mid-2018 after the U.S. imposed tariffs Note: Employment in large industrial enterprises, three-month moving average. December excluded for data anomalies. Source: Gavekal Dragonomics https://www.cnbc.com/2019/01/16/unemployment-worries-in-china-grow-as-beijing-beefs-up-stimulus.html https://www.cnbc.com/evelyn-cheng/ https://twitter.com/chengevelyn https://www.cnbc.com/china/ https://www.cnbc.com/2019/01/15/chinas-finance-ministry-says-to-step-up-fiscal-expenditure-this-year.html https://www.cnbc.com/2019/01/02/china-reports-december-caixin-manufacturing-purchasing-managers-index.html https://www.cnbc.com/2018/11/22/chinese-consumers-arent-spending-as-much-because-theyre-worried.html https://www.cnbc.com/2019/01/16/unemployment-worries-in-china-grow-as-beijing-beefs-up-stimulus.html China’s biggest holiday, celebrating the Lunar New Year, falls on the first full week of February. Businesses are typically closed for one or two weeks as employees travel home to visit their families. For at least one factory in the export-heavy region of Guangdong, scattered posts on Chinese social media said that the closure began in early December and work isn’t expected to resume until March. In a country infamous for heavy censorship, it’s not clear whether that early closure is indicative of a broader trend. But surveys point to growing job losses in the industrial sector, especially in the wake of last year’s U.S. tariffs on $250 billion worth of Chinese goods. Gavekal Dragonomics’ China Consumer Analyst Ernan Cui pointed out in a Jan. 9 report that an official survey covering 374,000 large industrial firms shows total employment declined by about 2.8 million people in the 12 months through November. ‘We haven’t seen this degree of jobs weakness since the (stock) market panic of Q1 2016’. Leland Miller C E O , CH IN A BE IGE BO O K Separately, UBS estimated total potential job losses in export-related sectors from the trade war could reach 1.5 million. The firm’s survey in November found that