|Assessment Details and Submission Guidelines|
|School||School of Business|
|Course Name||Bachelor of Business|
|Unit Title||Principles of Economics|
|Assessment Author||Pu Chen|
|Assessment Type||Group Assignment|
|Assessment Title||Group Assignment|
|Unit Learning Outcomes covered in this assessment||Demonstrate their understanding of fundamental problem of scarcity facing in an economy. Apply the macroeconomic concepts such as economic growth, Gross Domestic Product, business cycle, unemployment, inflation, aggregate demand – aggregate supply model and government policies. Explain the importance of economic models and key assumptions in economics. Apply economic models and assumptions to analyse a given situation and/or media articles on economic issues.|
|Word limit||Max. 2000|
|Release Date||Week 8|
|Due Date||Week 10|
|Submission Guidelines||All work must be submitted on Moodle by the due date along with a completed Assignment Cover Page. The assignment must be in MS Word format, 1.5 spacing, 11-pt Calibri (Body) font and 2 cm margins on all four sides of your page with appropriate section headings. Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using APA or IEEE referencing style for School of Business and School of Information Technology and Engineering respectively.|
|Extension||• If an extension of time to submit work is required, a Special Consideration Application must be submitted directly to the School’s Administration Officer, in Melbourne on Level 6 or in Sydney on Level 7. You must submit this application three working days prior to the due date of the assignment. Further information is available at: http://www.mit.edu.au/about-mit/institute-publications/policies-proceduresand-guidelines/specialconsiderationdeferment|
|Academic Misconduct||• Academic Misconduct is a serious offence. Depending on the seriousness of the case, penalties can vary from a written warning or zero marks to exclusion from the course or rescinding the degree. Students should make themselves familiar with the full policy and procedure available at: http://www.mit.edu.au/aboutmit/institute-publications/policies-procedures-and-guidelines/PlagiarismAcademic-Misconduct-Policy-Procedure. For further information, please refer to the Academic Integrity Section in your Unit Description.|
Assessment Cover Sheet
|Student ID Number/s:||Student Surname/s:||Given name/s:|
|Unit code:||Unit title:|
|Due date:||Date submitted:||Campus:|
|Student Declaration I/We declare that: the work contained in this assignment is my/our own work/group work, except where acknowledgement of sources is made; certify that this assessment has not been submitted previously for academic credit in this or any other course; I/we have read the MIT’s Plagiarism and Academic Misconduct Policy Procedure, and I/we understand the consequences of engaging in plagiarism; a copy of the original assignment is retained by me/us and that I/we may be required to submit the original assignment to the Lecturer and/or Unit Co-ordinator upon request; I/we have not plagiarised the work of others or participated in unauthorised collaboration when preparing this assignment.|
Using the principles of economics covered in learning materials from week 1 to week 10 inclusive, students should apply their knowledge of economics to analyse the macroeconomic issues and the policy responses to the impact of COVID 19 on the Australian economy. Students are expected to conduct some basic research and to reference journal articles, professional websites and other sources in the process.
Impact of COVID 19 on the Australian economy
The outlook for the Australian and global economies is being driven by the COVID-19 pandemic. The necessary social distancing restrictions and other containment measures that have been in place to control the virus have resulted in a significant contraction in economic activity, but economic conditions will improve as the pandemic is brought under control and containment measures are relaxed.
Global GDP fell sharply in the first half of 2020. The declines in the March quarter were driven by a contraction in Chinese and euro area activity as well as the rollout of containment measures elsewhere late in the quarter. A further fall in global GDP the June quarter, with many countries expected to record quarterly declines in GDP.
The Australian economy recorded a contraction in GDP of around 7 per cent over the first half of 2020; total hours worked declined by around 17 per cent and the unemployment rate rose to around 7 per cent in October 2020. Inflation rate was 0.7 per cent in the September quarter 2020.
ABS data show that employed people were 12595100 in September 2020, and 12773900 in October 2020 respectively; unemployed people were 935400 in September 2020 and 960900 in October 2020. The participation rate was 64.9.0% in September 2020 and 65.8% in October 2020.
Fiscal Policy Responses
Since the onset of the pandemic the Federal Government has provided $257 billion in direct economic support which is roughly 13% of the annual GDP in 2020. The fiscal response consists of $39 billion directly to business, $25 billion to households and the $130 billion Job-Keeper payment to support business and households through the COVID-19 shutdown.
Monetary Policy responses
The Reserve Bank of Australia has reduced the cash rate to 0.1% which is the historical low record. More details can be found at
The Australian economy performing better than expected. Despite the fall of GDP by a record 7 per cent in the June quarter and over 2020, and a decline by around 4 per in 2020. In the RBA’s is expecting expecting a growth of 5 per cent next year and 4 per cent over 2022. More details please see
See: https://www.rba.gov.au/speeches/2020/pdf/sp-gov-2020-11-16.pdf and
1. Calculate the working-age population, the labour force, and the unemployment rate for December 2020 and March 2021 respectively. Source: https://www.abs.gov.au/statistics (10 marks)
2. According the data detailed in the case study, illustrate and explain the impact of COVID-19 on the Australian economy in an ADAS model. (10 marks)
3. Summarise the fiscal response of Australian government to COVID 19 and use AD-AS model to illustrate the fiscal policy responses of Australian government and describe the objective the fiscal policy. (10 marks)
4. Assuming the marginal propensity to consume is 0.8, calculate the multiplier effect of the fiscal policy response package of $194 billion. Do you think the realised policy effect will be as big as that you calculated? Elaborate your answers. (10 marks)
5. Summarise the monetary response of RBA to COVID 19 and use AD-AS model to illustrate the monetary policy responses of RBA and describe the objective the monetary policy. (10 Marks)
BB106 Principles of Economics
Marking Guide: Group Assignment Report
|Student Name: ________________ Student Number: __________________ Student Name: _________________Student Number: __________________||Student Name: ________________ Student Number: _____________________ Student Name: _________________Student Number: _____________________|
|Using a diagram, illustrate and describe the trend of Australian GDP since 1991.||10||Less than two correct numbers||Tow to three numbers are correct||Tow pairs are correct||Correct calculation of all 3 pair of numbers|
|Using the AD-AS framework and discuss the impact of CVID 19 on the economy||10||Poor explanation and no critical analysis of the factorsPoor or no application of economic theory/conceptsNo example(s) are provided||Basic explanation and no critical analysis of the factorsAverage/below application of economic theory/conceptsVery little or inappropriate example(s) are provided||Detailed explanation and little critical analysis of the factorsGood application of economic theory/conceptsExample(s) are provided to support the argument||Clear and detailed explanation and critical analysis of the factors Excellent application of economic theory/conceptsAppropriate example(s) are provided to support the argument|
|Fiscal policy responses||15||Not meeting the higher criteria||Correct identification of the fiscal policy on the AD side.Correct usage/labelling of diagrams in explanation.||Correct identification of the fiscal policy on the AD side as well as on the AS side Correct usage/labelling of diagrams in explanation.||Correct identification of the fiscal policy on the AD side as well as on the AS side Excellent explanation/analysis of how the factors contribute to the current prices.Correct usage/labelling of diagrams in explanation.Discussion of current falling prices and showing contrarian views and contain critical analysis.|
|Calculation of analysis of the multiplier process||Not meeting the higher criteria||Correct calculation of the multiplier effects.||explanation/analysis of the multiplier process.Correct calculation of the multiplier effects.||Excellent explanation/analysis of the multiplier process.Correct calculation of the multiplier effects.Discussion on the effectiveness of the fiscal policy|
|Type of monetary policy used and how it will influence the Australian economy. Discuss whether the policy will be successful.||15||Incorrect identification of expansionary monetary policyA poor and incorrect description of transmission mechanism and its impact on national output A poor and incorrect discussion of the policy constraints||Correct identification of expansionary monetary policyBasic and incomplete description of transmission mechanism and its impact on national outputBasic explanation of the policy constraints and limitations.||Correct identification of expansionary monetary policyGood explanation of transmission mechanism and its impact on national outputA good discussion of the policy constraints and limitations.||Correct identification of expansionary monetary policyExcellent explanation/analysis of transmission mechanism and its impact on national outputA very good discussion of the policy constraints and limitations.Elements of critical analysis|
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