You must have frequently heard economists or finance experts discuss Australia's inflation rate, employment conditions, import and export, and taxation policies. When you aren’t clear with the basics, it looks like something to worry about. It is indeed and you don’t want to be left behind due to this reason. Ricky, a student at Holmes Institute, was stuck in the same situation until he found some help at Assignment Help Era for writing his HI5003 economics for business assignment. He hired a subject expert to do his assignment for him that eventually got him to score beyond his expectation. But if you’re just looking for some business economics assignment help, then we will get the concepts straightened out for you.
Impact of Inflation on Bank Deposit and Investment
Before our economics assignment writing experts discuss the impact, let’s first understand what inflation is. In simple terms, inflation occurs when the average prices increase or purchasing powers of consumers decrease. A change in the inflation rate directly impacts savings or bank deposit. This is because the prices of goods and services increase every year and you may not be able to purchase the same quantity next year. While there is no reduction in the money kept with you, yet your net worth has decreased over time. At the time of high inflation, your bank pays a higher interest rate to cut down its effects.
Different kinds of investments such as regular bonds, bank certificates, stocks, and gold have a different impact due to inflation. When there’s a high rate of inflation, you could receive lesser earnings. The impact on stock investment generally varies as it depends on the performance of the company you have invested in. On the contrary, gold does well at the time when inflation is high. With a decrease in the value of money, it becomes expensive to purchase the same amount of gold.
AD and AS Model
You must understand and be able to create graphs to score well in this HI5003 assessment. Aggregate demand is an economy’s overall demand for goods and services produced over some time. On the other hand, aggregate supply is the number of goods and services that firms are willing to sell at a pre-decided price. The AD-AS model utilises the relationship between aggregate demand and aggregate supply to demonstrate price level and total output. Ever since this model was developed, it was used by economists from around the world to study the functioning of goods and services in economies. These two variables do remain constant since various exogenous factors have an impact on them. But let’s first understand AD and AS curves with the diagrams below before moving ahead.
In the above figure, you will notice that the AD curve is downward sloping. As prices fall, the spending power of a consumer increases. However, the wages must be constant. Another reason for a downward sloping AD curve is due to decreased interest rates.
What are the Causes of Structural Unemployment in Australia?
Regarded as an important element of monetary policy, structural unemployment provides economists with insight into the performance of an economy. You may be wondering how unemployment rates are measured in Australia. Labor force or labour market comprises both employed and unemployed people. Take a look at the example below to understand unemployment rates.
In Australia, structural unemployment occurs when the available jobs and people looking for jobs do not match. Economists believe there are several reasons for this. It could be because people may lack the required skills to be eligible for the jobs or that the available jobs are far from their reach. Structural unemployment could also take place in companies that are becoming obsolete. Automation and technological advancement replaces workers having undesirable skills, thereby leaving them jobless. It becomes difficult for them to find jobs in the same industry due to similar advancements in other firms as well. But alternate job options within their skill range are available in other industries.
Another example is any manufacturing industry where the number of workers engaged in manual routine jobs is high. Its size in terms of employment and production has declined. When compared with other types of unemployment, structural employment lasts for a longer interval of time. This is because workers could take months and years to develop certain skills and knowledge and be eligible for jobs that require such abilities. In Australia, despite favourable economic conditions, it is still possible for this type of unemployment to exist. Hence, the Government of Australia prevents it through policies and employee skill development programs.
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