Calculate the unemployment and labour force participation

Assignment Help Microeconomics
Reference no: EM13161175

Competitive dynamics in the banking sector

The Treasury presentation earlier in the week to the Senate inquiry on competition in the banking sector drew attention to a number of significant developments which have, collectively, altered the competitive dynamics of the retail banking sector in recent years.

there has been further consolidation in the Australian banking sector since the global financial crisis.

A consequence of these factors is that the four major banks have expanded their collective market share across a range of loan and deposit products.

This is illustrated in the home loan market (Chart 5). The share of total housing loan credit for the five largest banks - the four major banks (Commonwealth Bank, NAB, ANZ and Westpac) plus St George - has increased from around 60 per cent before the onset of the GFC in mid-2007 to around 73 per cent.

Chart: Major banks (Wespac, Commonwealth Bank, NAB, ANZ) gain market share

627_Competitive dynamics in the banking sector.png

The Government is seeking to enhance competitive pressures in the provision of retail banking products, including home loans, with the package of measures announced on the weekend. This includes:

• banning exit fees on new home loans;
• examining providing a capacity for consumers to transfer deposits and mortgages between banks;

1. Read the article above and answer the following questions.

a) What type of market do Australian Banks operate in? How has the Global Financial Crisis affected competition in this market? Explain your answer.

b) Assume the biggest four banks in Australia decided to collude and agree to charge a high price on banking products. Graphically demonstrate the price and output in this market and explain your diagram.

2. Briefly describe what triggers entry in a perfectly competitive market and the process that ends further entry. Use and refer to a diagram in your answer.

Part 2: Macroeconomic Perspective

1. In Japan, potential GDP is 600 trillion yen and the table shows the aggregate demand and short-run aggregate supply schedules.

1951_Competitive dynamics in the banking sector1.png

a) What is the short-run equilibrium, real GDP and price level?

b) Does Japan have an inflationary gap or a recessionary gap and what is its magnitude?

2. Answer the following questions with reference to the below data about Greece.

1694_Competitive dynamics in the banking sector2.png

a) Using the aggregate supply and demand model demonstrate what you think will happen to the Greek economy in 2015 based on the above forecasts. Justify your answer with reference to the components of Aggregate Demand.

b) What are the problems facing this economy and what fiscal policy can the government undertake to address these problems? How would this fiscal policy affect the Greek economy? Answer your question with reference to your diagram in a).

c) What challenges would face the Greek government if they wanted to undertake fiscal policy to address the problems described in b?

d) Calculate the unemployment and labour force participation rates in 2014 and in 2015 based on the figures provided above.

e) Using the figures you calculated in d) and assuming the forecast figures provided above are correct, what conclusion can you make about how employment in Greece will changed from 2014 to 2015? Will this be a positive or a negative change?

Reference no: EM13161175

Questions Cloud

What is self-thinning in terms of competition : What is self-thinning in terms of competition and how does this benefit the population?
Three or more dimensions : What kind of program, or problem, might necessitate arrays of three or more dimensions?
Application that finds all 4 digit numbers : Create an application that finds all 4 digit numbers (those would be the numbers in the range 1000-9999) whose value is equal to the sum of each digit raised to the fourth power. MEANINGFUL output should be sent to the screen.
Why atmospheric carbon dioxide levels fluctuate daily : Describe how and why atmospheric carbon dioxide levels fluctuate daily, seasonally, and geographically. Also why is the carbon cycle tied to energy flow charts?
Calculate the unemployment and labour force participation : Calculate the unemployment and labour force participation rates in 2014 and in 2015 and what challenges would face the Greek government if they wanted to undertake fiscal policy to address the problems described in b?
What is the most likely diagnosis : John a 26 year old man who begins to notice a prgressive enlargment of feet, hads, cranium, nose, and lower jawbone. His doctor recommends irridation of the pituitary gland.
Compute average memory access time : Compute Average Memory Access Time under a variety of memory system configurations and workload assumptions
State what is the frequency of light : A red laser pointer emits light with a wavelength of 660. What is the frequency of this light? 2.What is the energy of one of these photons?
How can predator populations function as agents : How can predator populations function as agents of natural selection in prey populations? How can prey populations function as agents of natural selection in predator populations?

Reviews

Write a Review

 

Microeconomics Questions & Answers

  “money market” debt instruments and “capital market” debt

Describe the difference between “money market” debt instruments and “capital market” debt instruments, and provide at least 2 examples of each type. Hint: See chapter 2 of the text.

  Neolithic revolution

What  was the Neolithic Revolution. Explain

  System breaks down for higher-level positions

Discuss how organizational architecture and corporate culture are related. Use an example of a real-life firm and discuss how its corporate culture blends with its organizational architecture.

  Demand and supply curves - free perfect market

The task is to interpret the following article in the light of your understanding of supply and demand. Where possible you should illustrate your discussion of the changing situations with demand and/or supply curves, indicating values where app..

  Explain gdp changes by supply and demand

The aggregate demand curve slopes decrease, because when the price level is reduce, people can afford to purchase more, and aggregate demand increase.

  Short-run cost structure

Comment on the statement. Do you agree with the speaker? Explain. Use a graph to illustrate the answer indicating the firm's short-run cost structure

  Analyze the backgrounds and impacts of deregulation wave

Starting in late 1970s and continuing through the 2000s, business environment moved toward relying less on government regulation and more on marketplace to get desired economic targets.

  What should be the price of the policy

The company estimates the probability of no damage to be 0.60, the proof damage between $0 and $10,000 to be 0.25, and the probability of damage between $10,000 and $25,000 to be 0.12. If the company wants to make a profit of $200 above the expect..

  Calculate the premerger herfindahl-hirschman index

Calculate the premerger Herfindahl-Hirschman index (HHI) for this market and suppose that any two of these firms merge. What is the post merger HHI?

  Computing profit maximizing price and output level

Derive the profit maximizing price and the profits at this price. What is the demand elasticity at this price? What is the total demand when the monopolist charges a price P?

  What happens to consumer surplus

What happens to consumer surplus and what happens to total surplus assuming the government sells the consumer

  Equilibrium price-output combination

Office building maintenance plans call for stripping, waxing, and buffing of ceramic floor tiles. This work is often contracted out to office maintenance firms, and both technology and labor requirements are very basic.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd