Part B of MRA - ECON1000 Introductory Economics S1 2025

MRA ‘Part B’ - Assessment (worth 36 Marks)

Overview

The assessment has become available on Thursday 22nd May at 11am and is STRICTLY due on Thursday 5th June at 11pm.

Key assessment information:

Part B of MRA is a downloadable ‘take-home’, ‘open book’ assessment where you can pace yourself to answer the questions. Refer to ‘ ECON1000 S1 2025 MRA Hints and Tips’ recording/PDF (slides 2,4-6) for suggestions on how to do well in Part B of MRA.

The student, by yourself (please no Gen-AI LLMs or other agent assistance) has 14.5 days (348 hours) to complete Part B of MRA under normal circumstances.

Many thanks in advance for your cooperation, Brennan AI Tech Incorporated (BAT Inc.)

Answer ALL short-answer style. questions from the document file provided.

Your answers need to be typed, but diagrams must be hand-drawn (digital inking using a stylus is fine) and included into an editable Word document (or PDF).

Note, word count is a suggested maximum. It is crucial is that you specifically answer the questions and have sufficient explanations and refer to key sentences, ideas and data from various articles* where relevant to support your analysis. (*):= the key articles are available for free online [but if not, see alt. links below].

IMPORTANT: When ready to submit, ONLY include answers and prepare your document as following: Full Name and Student ID on the first page as a title in the Word document (or PDF). Submit your file to Turnitin by the due date (go to Assessments tab on Bb, subfolder ‘PART B of MRA: SHORT ANSWERS’).

All the best with the assessment :-)

Part B. SHORT ANSWERS: Analysis and Application [36 marks]

[There are three (3) main questions to be answered with sufficient explanations and where relevant using well-labelled, hand-drawn diagrams with accuracy.]

Q1 - The economic impacts of Argentina,s use of fiscal policy [14 marks]

The president of Argentina Javier Milei is famous for taking a chainsaw approach to fiscal spending since he came to power in late 2023, as pointed out in these articles (listed in chronological order):

1.   Calatrava, Almudena (2024) ‘Argentina’s Poverty Rate Spikes in First 6 months of President Milei’s Shock Therapy’, Associated

Press Newswires, September 27th, available:https://apnews.com/article/argentina-poverty-milei-economy-crisis- f766deb9302aa4ddde1bb9ae26aaf7af

2.   Grinspan, Lautaro (2024) ‘Inflation Down, Poverty up as Milei Takes Chainsaw to Argentina’s Economy’, Al Jazeera, December

30th, available:https://www.aljazeera.com/news/2024/12/30/inflation-down-poverty-up-as-milei-takes-chainsaw-to- argentinas-economy

3.   The Guardian (2025) ‘The Guardian View on Argentina’s Austerity Year: Painful Cuts, Rising Poverty and a Geopolitical Gamble’,

The Guardian, January 13th, available:https://www.theguardian.com/commentisfree/2025/jan/12/the-guardian-view-on- argentinas-austerity-year-painful-cuts-rising-poverty-and-a-geopolitical-gamble

4.   Reuters (2025) ‘Argentina’s GDP Seen Growing in Q4 After Shrinking for Six Quarters’, Reuters, March 18th, available:

https://www.reuters.com/markets/argentinas-gdp-seen-growing-q4-after-shrinking-six-quarters-2025-03-17/

5.   Roberts, Michael (2025) ‘Argentina: Anarcho Capitalism to Austerity’, Committee for the Abolition of Illegitimate Debt, April 16th, available:https://www.cadtm.org/Argentina-anarcho-capitalism-to-austerity

a) Use the multiplier AD model diagram to illustrate and explain in detail what is happening to the Argentinian economy as Milei vows to “maintain a fiscal surplus at all costs” . In your diagram, begin the economy in 2023, and explain the multiplier processes at work during 2024 and what to expect for 2025 (assume a marginal propensity to consume (MPC) of 0.75 throughout).

500 ±100 or so words should be sufficient for Q1a

10 marks for quality of analysis, including diagram

b)   Consider the broad impact of the 2024 austerity measures on university students, public sector employees and pensioners in Argentina. Use a figure with income and consumption on the vertical axis and time on the horizontal axis to illustrate and discuss the way in which Argentina’s working class has responded to programme of austerity.

300 ±100 or so words should be sufficient for Q1b

4 marks for quality of analysis, including figure

Apply key economic concepts taught in Modules L4 and L3 in ECON1000 S1 2025 and refer to key sentences and ideas from the salient articles where relevant to support your analysis.

Q2 - The impacts of monetary policy on inflationary expectations in Australia [10 marks]

Economic life has become quite expensive lately. The costs of living in Australia and elsewhere have gone up dramatically over the past couple of years owing in part to the accumulated effect of past high inflation. Read the following articles (listed in chronological order):

1.   Jericho, Greg (2025a) ‘The Reserve Bank Should be Looking at These Numbers and Wondering why it Waited Until February to

act’, The Guardian, March 6th, available:https://www.theguardian.com/business/grogonomics/2025/mar/06/rba-interest- rates-australia-inflation-data-gdp-growth

2.   Carter, Jeremy Story (2025) ‘Can Australia Still Afford...’, ABC News, April 21st, available:https://www.abc.net.au/news/2025- 04-21/can-australia-still-afford-the-pub-coffees-and-friday-takeaway/105115938

3.   Schneiders, Ben (2025) ‘Australia is in a Cost-of-Living Nightmare: What can the new Albanese Government Learn from its Last

Term?’, ABC News, May 7th, available:https://www.abc.net.au/news/2025-05-07/can-albanese-government-fix-the-economy- four-corners/105260320

4.   Jericho, Greg (2025b) ‘The Reserve Bank Played it Safe and Didn’t cut Interest Rates in April – and Households Suffer’, The

Guardian, May 8th, available:https://www.theguardian.com/business/grogonomics/2025/may/08/reserve-bank-australia- interest-rates-retail-trade-cost-of-living-economy

5.   Verrender, Ian (2025) ‘Why Soaring Property Prices Could Dampen Future Interest Rate Cuts’, ABC News, May 13th, available:

https://www.abc.net.au/news/2025-05-13/why-soaring-property-prices-could-dampen-future-rate-cuts/105284238

Use the multiplier AD model and Phillips curve diagram to illustrate and explain in detail how the aggregate demand function in the Australian economy has shifted over the past couple of years. Begin your economy in June 2022 with an unemployment rate of 3.5% and explain the socio- economic outcomes up to March 2025 from the RBA’s response to the positive shock. In your answer, elaborate on the significance of monetary policy in the Australian context.

500 ±100 or so words should be sufficient for Q2

10 marks for quality of analysis, including linked diagrams

Apply key economic concepts taught in Modules L8 and L7 in ECON1000 S1 2025 and refer to key sentences, ideas and data from the salient articles where relevant to support your written analysis.

Q3 - The key factors affecting the labour market in the United States [12 marks]

Critically evaluate the relevant factors at play here in the WS/PS model—productivity, worker bargaining power (including unions)—when reading the following analyses (listed in chronological order) and relevant data source:

1.   Weller, Christian E. and Natalie Baker (2025) ‘The Biden Administration Handed Over a Strong Economy’, The Center for

American Progress, January 23rd, available:https://www.americanprogress.org/article/the-biden-administration-handed-over- a-strong-economy/

2.   Poydock, Margaret, Celine McNicholas, Jennifer Sherer, Heidi Shierholz (2025) ‘16 Million Workers Were Unionized in 2024’, The

Economic Policy Institute, January 28th, available:https://www.epi.org/publication/millions-of-workers-millions-of-workers- want-to-join-unions-but-couldnt/

3.   Derby, Michael S. (2025) ‘US Labor Union Membership Slips in 2024 to Record low’, Reuters, January 29th, available:

https://www.reuters.com/world/us/us-labor-union-membership-little-changed-2024-government-says-2025-01-28/

4.   Saraiva, Augusta (2025) ‘US Productivity Rises at Solid Pace, Helping Limit Labor Costs’ , Bloomberg, February 6th, available:

https://www.bloomberg.com/news/articles/2025-02-06/us-productivity-rises-at-steady-pace-helping-limit-labor-costsor

https://www.msn.com/en-xl/money/markets/us-productivity-rises-at-solid-pace-helping-limit-labor-costs/ar-AA1yxyER

data source:

5.     Unemployment Rate (UNRATE) in the United States, Federal Reserve Bank of St. Louis:

https://fred.stlouisfed.org/series/UNRATE

In this context, use WS/PS model to illustrate and explain in some detail into what has happened to real wages and unemployment and for the other relative factors in the US economy over the past nine years from December quarter 2015 to December quarter 2024.

600 ±100 or so words should be sufficient for Q3

12 marks for quality of analysis, including diagram

Apply key economic concepts taught in Modules L5 and L6 in ECON1000 S 1 2025 and refer to key sentences, ideas and data from the salient articles where relevant to support your written analysis.