Case study

Kate (aged 32) and Emily (aged 31) are sisters. Kate works full-time as a nurse and Emily works in IT as a contractor, specialising in project management. Kate has been working for 10 years. Five years ago, she purchased a two-bedroom unit for $520,000, borrowing $400,000 to complete the purchase. She now has $60,000 in a mortgage offset account.

Emily was a full-time student and completed a double degree and then her master's degree and has now been working for the past three years. She started contracting in an attempt to find her ideal organisation; however, she hasn't had much success. She does, however, enjoy regular work and has set herself up with a company as a program lead where she is earning at least $150,000 a year.

Both sisters are single with no dependants. During the COVID-19 lockdowns, Kate asked Emily to move in with her for company. Emily pays $100 per week as rent and half the bills and outgoings. Emily has saved $30,000 since moving in and Kate has used Emily's rent to pay for redecorating.

Kate has often complained to Emily about how poorly the rosters are put together at the hospital and that there is never enough staff during peak demands, although Kate thinks the demands are relatively predictable: Saturday afternoons = sports injuries; Friday and Saturday nights = alcohol-related injuries; and weekdays in winter = children with various respiratory illnesses.

Emily developed a program that will monitor bed usage and patient demand from entry point into the hospital system through to exit points, linking staffing needs for each part of the hospitalisation. She shows it to Kate, who uses her medical knowledge to streamline the processes and to enhance timing and the number of days per stay for the various illnesses.

Kate gets the opportunity to show the program to the CEO at her hospital. The CEO is very interested and can see a company-wide application of the program, for all the services and employees at the group's hospitals in Australia, New Zealand, Hong Kong and Singapore. The CEO encourages Kate to go home and develop it into a hospital-wide resource.

Kate and Emily's uncle Tom heard about the program during a family zoom catch-up. Tom makes a living from gambling and has had a significant windfall from Bitcoin trading. He offers Emily and Kate $100,000 so they can both stop work for six months and focus on the program. Before he finalises the offer, he wants them to show him a five-year business plan. If they can convince him, he will sell some of his Bitcoin holdings to raise the $100,000.

Analysis Task

There are three (3) short-answer questions in this analysis task. Answer all questions.

Emily and Kate have requested a meeting so that they can have a better understanding of key macroeconomic factors, and, how they relate to their present business situation as per the case study.

The following are the three (3) macroeconomic issue that Emily and Kate would like to understand:

What is a business cycle and at what stage the Australian economy presently sits in the cycle.

What is inflation and what is the outlook in the economy for inflation.

What is 'wage growth'. This is a major area they want to be aware due to the growth potential they believe their business has.

To help explain these issues to Emily and Kate, the assignment question has been divided into three (3) parts for a total of 25 marks. Your responses must be supported by strong economic arguments and independent research.

Part 1Three (3) macroeconomic factors

What is the business cycle and where you believe the Australian economy presently sits in the cycle. (3 marks)

What is inflation and how it is measured. In your response, include a discussion of inflation in terms of the current economic environment. (3 marks)

What is wages growth in the Australian economy. Discuss previous trends, its present levels in the current environment and the direction you believe it is now heading. (3 marks)

Part 2Australian macroeconomic policies

Briefly explain the role of the RBA in the Australian economy. Identify and discuss relevant recent changes to Monetary Policy that would have an impact on each of the three (3) macroeconomic factors:

- the business cycle

- inflation

- wages Growth

Response needs to focus on how the current monetary policy change influences the particular macroeconomic factor. Supporting independent research is required. (3.5 marks)

Explain Fiscal Policy in the Australian economy. Identify and discuss relevant recent changes to Fiscal Policy that would have an impact on each of the three macroeconomic issues factors mentioned above. Response needs to focus on how the current fiscal policy change influences the macroeconomic factor. Supporting independent research is required. (3.5 marks)

Note:

When identifying the changes to either monetary of fiscal policy, your research must ensure the change(s) identified has some impact on the macroeconomic factors mentioned and is clearly explained in your response.

There is no restriction in using an identified macroeconomic policy change more than once; however, response must ensure it has demonstrated some impact to the macroeconomic factor.

Question 1 Impact of economic variables and government policies (25 marks | Word limit: 1,000 words)

Part 3the impacts of macroeconomic factors to Emily and Kate's business

Discuss and explain how the following macroeconomic would have an impact on Emily and Kate's business, particularly in the future growth of their business:

The business cycle. (3 marks)

Inflation. (3 marks)

Wages growth. (3 marks)

Note: A good response would look carefully at the type of product being offered and the industry it is in. Criteria-Based Marking Guide for Question 1

Excellent (Mark range: 19-25 marks)	Satisfactory (Mark range: 12.5-18.5 marks)	Unsatisfactory (Mark range: 0-12 marks)
A thorough explanation of each of the three (3) macroeconomic factors. Response clearly relates each macroeconomic factor to the current economic environment. Accurate identification of monetary and fiscal policy changes that may influence each of the three (3) macroeconomic factors in the present environment. Discussion is clear, thoughtful and well justified. Thorough explanation of how each of the three (3) macroeconomic factors are likely to impact on the business now and on its future growth. Response clearly relates back to the case study and is justified. Strong research is demonstrated in the responses. Various high-quality sources are used to support the discussion.	Each of the three (3) macroeconomic factors is explained but requires further detail. Response somewhat relates each macroeconomic factor to the current economic environment. Accurate identification of monetary and fiscal policy changes that may influence each of the three (3) macroeconomic factors in the present environment. Discussion is clear but requires stronger justification. Explanation on how each of the three (3) macroeconomic factors are likely to impact on the business now and on its future growth requires further explanation. Response does not clearly relates back to the case study. Research is evident in the responses. Various acceptable sources are used to support the discussion.	The three (3) macroeconomic factors are poorly explained. The discussion does not clearly relate each macroeconomic factor to the current economic environment. Incorrect identification of monetary and fiscal policy changes that may influence each of the three macroeconomic factors in the present environment. Discussion is vague and superficial. No explanation of how each of the three (3) macroeconomic factors are likely to impact on the business now and on its future growth. Response contains some inconsistencies. Research is not evident in the response. Vague or incorrect sources used.

Question 2 Forecasting

For this question, you will need to answer each part with reference to the planned business. Any assumptions you make need to be relevant to Emily and Kate's situation and to your answer.

Emily and Kate have been researching economic forecasts and are trying to predict if one particular economic variable leads to an increase in demand for hospital services. They are frustrated by economic forecasts from the professionals and are finding the forecasts to be a bit 'hit-and-miss'.

Note: You are required to undertake independent research to answer the following questions.

(a) Explain to Emily and Kate the impact of economic forecasting on asset prices. (5 marks)

(b) Select a relevant economic variable that can be forecast and describe how changes in the variable may impact on their planned overseas expansion to New Zealand, Hong Kong and Singapore. (5 marks)

Criteria-Based marking guide for Question 2(a)-(b)

	Excellent	Satisfactory	Unsatisfactory
(a)	clear and concise explanation of the impact of economic forecasting on asset prices	adequate and mostly correct explanation of the impact of economic forecasting on asset prices	incorrect/no explanation of the impact of economic forecasting on asset prices
(Range: 5 marks)	(Range: 4-5 marks)	(Range: 2.5-3.5 marks)	(Range: 0-2 marks)
(b)	detailed and clear explanation of how the economic variable selected will impact on overseas expansion evidence of independent research that considers a range of relevant, appropriate sources to support conclusion	adequate and mostly correct explanation of how the economic variable selected will impact on overseas expansion evidence of adequate research that considers sources that are mostly relevant/appropriate in support of conclusion	incorrect/no explanation of how the economic variable selected will impact on overseas expansion little to no evidence of independent research and/or many/all sources are not appropriate and/or many/all sources do not support conclusion
(Range: 5 marks)	(Range: 4-5 marks)	(Range: 2.5-3.5 marks)	(Range: 0-2 marks)

Question 3 Negligence (5 marks | Word limit: 200 words)

Note: You are required to undertake independent research to answer the following question.

Emily and Kate are concerned about the impact of their software failing and being personally responsible for any impact of that failure. They have heard of negligence and ask you to explain to them how the hospital could prove they have been negligent.

You must answer this question with reference to the planned business. Any assumptions you use must be relevant to Emily and Kate's situation, and to your answer.

Criteria-Based Marking Guide for Question 3

Excellent	Satisfactory	Unsatisfactory
(Mark range: 4-5 marks)	(Mark range: 2.5-3.5 marks)	(Mark range: 0-2 marks)
clear, concise, and correct explanation of negligence, including the relevant steps and process for proof of negligence answer includes strong and clear links to case study evidence of independent research that considers a range of relevant, appropriate sources to support conclusion	adequate explanation of negligence, including the relevant steps and process for proof of negligence answer linked to case study evidence of adequate research that considers sources which are mostly relevant/appropriate in support of conclusion	inadequate/incorrect or no explanation of negligence, or the relevant steps and process for proof of negligence answer not linked to the case study little to no evidence of independent research and/or many/all sources are not appropriate and/or many/all sources do not support conclusion