Question 1
– In your everyday life, you make strategic decisions. Use the game theory matrix to explain one of these decisions. (2 Marks)
Question 2
-Your friend is very happy because he told you that his real wage has increased unexpectedly. Explain, using the concepts of real income, and nominal income, anticipated and unanticipated inflation rate, how is this possible. 3 Marks
-Can unemployment rate rise in a given year even if the economy added a hundred thousand new net jobs? Explain. (2 Marks)
-Would you expect technological change and artificial intelligence to increase the level of unemployment? Explain 2 factors that might lessen the effect on unemployment? 2 Marks
Question 3
-Is it accurate to use changes in real GDP to measure changes in the welfare of a country’s population? Explain. (3 Marks)
-In a conversation, someone mentioned that “Australia’s economic growth did not change because the market value of total production in both 2016 and 2017 was 1.4 trillion dollars”. Upon checking you found that in these two years Australia’s GDP implicit price deflator increased from 101.2 to 104.4. Explain with numerical calculations if the statement is factually accurate. (3 Marks)
Question 4
-Assume you own a new car dealership. Reflect on which phase(s) of a business cycle your sales will most likely increase and in which phase(s) will you experience a decline in sales. Justify your answer. (3 Marks)
-Why a credit card is not considered money? (2 Marks)
Question 5
-How can unanticipated inflation can impact on the financial markets? (5 Marks)
