Using an aggregate demand and aggregate supply diagram model of the economy

DO NOT SCAN OR PHOTOCOPY MATERIAL INTO YOUR ANSWERS!! USE your own words on the definition questions.
Consider a macroeconomy was initially at equilibrium. Using an aggregate demand and aggregate supply diagram model of the economy, graphically illustrate and discuss the short-run and long-run effects of the following events upon the economy:
(a) The imposition of a carbon tax upon local big polluting companies.
(b) An appreciation in the foreign exchange rate value of the economy’s currency.
(c) The European economies all fall into recession
(d) The country’s main exports fall in price while the goods the country imports from abroad rise in price (2 marks)
Why do economists monitor the unemployment data? If the unemployment rate was increasing why would there be a widespread belief that interest rates might fall in the future. Why too might the value of the dollar fall on international exchange markets (2 marks)
Collect an article from an Australian newspaper showing coverage of some macroeconomic issue. Explain the choice behind the article and what macroeconomic concept it is demonstrating (1 Mark)
Currently Australian consumers are eagerly paying off their mortgage and credit card debts and not spending. Using the simple Keynesian model assess the implications for equilibrium GDP and the level of savings of this behaviour. Relatedly, what do you think would happen to consumer spending if there was decrease in the value of one’s house or superannuation nest egg? (2 Marks)
5. State the difference (IN YOUR OWN WORDS) between:
-absolute advantage and comparative advantage.
-between the terms of trade and the exchange rate
– between the great moderation and the great inflation
-between a trade surplus and a budget surplus (2 marks)
6. Use the Australian Bureau of Statistics website and perhaps the Reserve Bank of Australia website to answer the following questions: What are the current levels of the following economic indicators…

 

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