Task 1: A new colleague working with you on the unemployment statistics for this Policy Brief and is feeling a bit puzzled by the labour market data. They tell you: “I don’t understand how sometimes the number of people in employment goes up at the same time that the unemployment also goes up. For example, between July 2022 and August 2022, the number of people in employment increased from 13,620,600 to 13,674,800 but the unemployment rate didn’t fall. Instead, it rose from 3.4% to 3.5%. If there are now more people with jobs, shouldn’t the unemployment rate go down? How is this possible?” Firstly verify whether your colleague is correct when they say that the unemployment rate increased between July 2022 and August 2022. Next, help your colleague understand how it is possible for the unemployment rate to rise even though the number of people with jobs also rose. Explain what other economic indicator needs to be monitored, and provide your calculation of the changes in this other indicator that occurred between July 2022 and August 2022. To support your calculations, include all your working and the formulas you applied to compute these labour market statistics. Round off your answers to 2 decimal points. When you obtain your answers, write a clear sentence that addresses the specific questions that have been asked. Task 2: The experience of the Global Financial Crisis made policymakers vigilant about ensuring the stability of the financial system and avoiding a repeat of the GFC during the shock of COVID-19 pandemic. Choose one of the following policies as an example of prudential regulation and explain how it contributes to the stability of the financial system. (1-2 sentences) Policy #1 The decision made by the Board of the Reserve Bank of Australia to lift the cash rate to prevent runaway inflation Policy #2 Deregulation of the financial market which introduced a floating exchange rate Policy #3 The tightening of lending limits on commercial banks and the requirement that all commercial banks hold an Exchange Settlement account with the Central Bank.
Task 1: A new colleague working with you on the
Firstly verify whether your colleague is correct when they say that the unemployment rate increased between July 2022 and August 2022.
Next, help your colleague understand how it is possible for the unemployment rate to rise even though the number of people with jobs also rose. Explain what other economic indicator needs to be monitored, and provide your calculation of the changes in this other indicator that occurred between July 2022 and August 2022.
To support your calculations, include all your working and the formulas you applied to compute these labour market statistics. Round off your answers to 2 decimal points. When you obtain your answers, write a clear sentence that addresses the specific questions that have been asked.
Task 2:
The experience of the Global Financial Crisis made policymakers vigilant about ensuring the stability of the financial system and avoiding a repeat of the GFC during the shock of COVID-19 pandemic.
Choose one of the following policies as an example of prudential regulation and explain how it contributes to the stability of the financial system. (1-2 sentences)
- Policy #1 The decision made by the Board of the Reserve Bank of Australia to lift the cash rate to prevent runaway inflation
- Policy #2 Deregulation of the financial market which introduced a floating exchange rate
- Policy #3 The tightening of lending limits on commercial banks and the requirement that all commercial banks hold an Exchange Settlement account with the Central Bank.
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