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Question: Imagine that the entire Australian national economy could be depicted as a single market with supply and demand for all goods and services produced by that economy. (In other words we are assuming that whole economy behaves just like the sum of its parts, i.e. the individual markets for particular goods and services added up).
(a) Depict the Australian economy in a single supply and demand graph (properly labeling curves and axes).
(b) Now draw a second supply and demand graph for the national economy depicting how the recent fall in Australian mineral exports has affected the overall economy. (Remembering that the minerals market is a major part of the overall national market).
(c) Use your first and second diagrams to tell a story about why minerals prices are falling. Keep in mind this is not necessarily the whole or even the correct story but the one implied by your model.
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