Assignment
Inflation measures change the prices of a 'basket' of goods and services the average household purchases. Inflation is an important indicator of economic performance because it measures how the purchasing power of incomes changes over time. Individual income is calculated as the country's total income (Gross Domestic Product, GDP) divided by the total population. You are given time-series data on Australia's price level and income (per capita) from 1981 to 2020[1]. Use this data to answer the following questions.
I. Calculate the highest, lowest, median, and mean for:
i. Australian price level data from 1981 to 2020
ii. Split data series into decades and calculate the mean price level for each decade separately.
iii. Compare the mean price level in each decade using an appropriate graph.
iv. What do you conclude in (a), (b), and (c)?
II. Repeat (I) using time series of Australian income (per capita).
III. Calculate the range, variance, and standard deviation for price level and income (per capita). Interpret the results.
IV. Calculate a simple index showing a change in price level and income (per capita) from 1981 to 2020, using 2000 as the base year. What conclusions can you draw from the results?
V. Show the quantitative time-series data using a histogram. Interpret the shape of the histogram.
VI. Draw a scatter plot using price level and income (per capita) data with a trend line. Is there any relationship reflected between the two variables? Explain why or why not.
You will present your findings in the form of a report. The report should have the following at minimum:
I. Title
II. Abstract/Executive Summary.
III. Table of Contents.
IV. Introduction.
V. Body.
VI. Conclusion & Recommendation.
VII. Appendices.
VIII. List of References.