Question 5

1. Fred has two (2) businesses. The economic slowdown in 2020 decreased sales in his new car dealership but the sales in his fruit and vegetable shop remained steady. Explain, using business cycle terminology, why are Fred's businesses affected differently. 2 Marks
2. What indicator does the government use to predict economic changes over the coming six months? In your answer, explain two (2) variables used in this indicator. 1 Mark

Question 6

1. Use the concepts of anticipated and unanticipated inflation to explain why real wages in many industries in Australia have decreased. 2 Marks
2. Explain with the support of graph(s), demand-pull and cost push inflation. Which, in your view, is the main driver of the present increase in inflation. Explain. 2 Marks
3. Assume a newspaper article stated, "The rise in the consumer price index of 2.7 percent has increased the cost of living of an average Australian by 2.7 percent". Is this an accurate conclusion? Explain. 2 Marks