Question 5: Week 10 Question 1, (7 marks) The ABS reported that in September 2007, a cycle peak, the working-age population was 16,808,200, the labour force was 10,979,300, and employment was 10,514,600. Calculate for that quarter the labour force participation rate and the unemployment rate. (3.5 + 3.5 = 7 marks) Question 6: Week 11 Question 1, (11 marks) Suppose, initially the Australian economy is at full employment (in other words the economy is at the potential GDP). Using AD-AS model, explain how would each of the following events affect the economy both in the immediate and in the long term. a) A slowdown in China's economic growth due to the sub-prime crisis in the US. (3.5 marks) b) Union wage settlements push the wage rate up. (4 marks) c) An increase in consumer confidence. (3.5 marks)