Look at an issue of The Australian newspaper from one day during the term and answer the following questions?
Look at an issue of The Australian newspaper from one day during the term and
answer the following questions (provide full reference and a photo copy or the cutting of
i) What is the top economic news story? Which of the big macroeconomic questions does it
deal with? (It must deal with at least one of them and might deal with more than one.)
ii) What tradeoffs do the news items discuss or imply?
iii) Write a brief summary of the current news item using economic vocabulary and basic
theory that you have learnt in this chapter one and as many as possible of the key terms listed
on page 15 of the set textbook (for example: factors of production, globalisation, human
capital, labour, opportunity cost, profit, rent, scarcity & wages).
- Anonymous9 years agoFavorite Answer
Strong jobs figures put rate cut in doubt
Expectations of a May interest rate cut have been undermined by signs that Australia's jobs
market is healthier than previously thought.
More than 44,000 jobs were created across the nation in March, the Australian Bureau of
Statistics said on Thursday, keeping the unemployment rate steady at 5.2 per cent once
population growth was factored in.
That was well above economists' expectations that 5,000 jobs would have been added to
the economy for the month and marked a sharp turnaround from February when more than
15,000 jobs were lost.
Economists are divided over how the better-than-expected data will affect the chances of an
interest rate cut in May.
The Reserve Bank of Australia opted to keep the cash rate on hold at 4.25 per cent in April
but flagged a likely rate cut next month.
While noting that the economy was underperforming, which suggests a lower cash rate is
needed, the RBA indicated it would only cut the rate if consumer price index (CPI) data, to
be released later this month, showed underlying inflation remained subdued.
However, some economists warn the latest jobs data could undermine the case for a rate cut.
RBC senior economist Su-Lin Ong said the data could help ease pressure on the RBA.
Economics Part A
"A number like this probably provides the market with a reminder that rate cuts aren't a done
deal," she said.
Nomura rates strategist Martin Whetton agreed.
"On the basis of this data, we wouldn't expect that the RBA would find slack in the economy
that's going to lead through to lower inflation," he said.
However, HSBC Australia chief economist Paul Bloxham believed the RBA would be more
interested in inflation data than the unemployment rate.
"I think if the CPI numbers are low enough, the RBA will still feel that they can cut rates
from here," Mr Bloxham said. (Evan Schwarten, AAP, The West; April 12, 2012)
There is increase in employment in the last one month which might help in putting
hold to rate cut by Reserve Bank of Australia. There are positive signs in Australian job
market with increase in 44000 employed people showing signs of recovery and better
production levels. This will also increase private consumption giving rise to increased
This story deals with various macroeconomic questions from unemployment rate,
inflation, production, labour, interest rate policies, money flow in the economy etc.
This news article describes tradeoffs between interest rate cuts, inflation rate and
First of all, this news article discusses the strong revival in the Australian job market
seen in the month of March. More than 44000 jobs were created in the month of March
across the nation which showed great signs of growth and production. It also says that
unemployment rate is steady at the rate of 5.2 percent.