These are the questions:
Watch the following video clip, A big lift in consumer confidence but how much is showing through on the shop floor and answer the following questions.
- What has been some of the macroeconomic impacts on Harvey Norman. Use economic analysis to describe how this impacts on profits (Hint: what type of market structure does Harvey Norman operate in?).
- If consumer confidence is rising, then use economic analysis to describe how this impacts on the economy. Given the level and growth of sales of Harvey Norman what is the more likely scenario.
- Thinking about the zero level of investment in new Harvey Norman stores and the lower/patchy sales growth. In what stage of the cycle would this happen. Why should we be careful using Harvey Normans sales growth as the only source of information to determine if Australia is in a period of slow growth? What information would be useful to verify this?
Watch the following video clip, CPI: A surprise jump in inflation to a 2-year-high appears to have reduced the chances of further official interest rate cuts in Australia and answer the following questions.
a. What were the underlying causes of the stronger than expected inflation rate (what goods experienced a rise in price and what goods experienced a fall in price. Thinking about the CPI basket do you think that a rise in these goods would influence CPI?
b. How does the lower Australian dollar contribute to inflation?
c. Explain how the changes in the prices of goods in part a, and the change in the exchange rate might influences the RBA's position on changing interest rates. How does the changes in the unemployment rate moderate this position?