Some financial market commentators often assert that changes in USA's real GDP have the tendency to cause recessions and expansions in Australia, because Australia trades with the USA and its economy is small relative to the economy of USA. Do you agree or disagree with this assertion? Critically discuss.

Rationale To enable students to research, critically analyse and evaluate the relationship between the macroeconomic performances of Australia and the United States of America. Instructions

1. To execute the task/question, obtain data from 2000 - 2023/24 on annual real GDP growth rates in Australia (yAU) and USA (yUS), annual exchange rate (Xrate) between the USA dollar and Australian dollar (USD/AUD), official interest rates in Australia (Cash rate (rAU)) and USA (Fed funds rate (rUS))).

2. Produce appropriate summary statistical tables and pair-wise graphs (Australia vs. USA) of each series of the data collected in part 1 (i.e. (r AU vs r US ); (yAU vs yUS); (r AU- r US ) vs Xrate) and critically analyse and discuss their relationships to reach your conclusions.

3. Analysis and Discussion: In your analysis and discussion, provide plausible economic explanations, including the impact of fiscal and monetary policy in both countries, for salient points in the relationships among the series.

4. Conclusions and Policy recommendations: Given the insights obtained from (1) - (3) of the research, what policy or policies would you recommend to the government to either insulate the Australian economy from the US economy or keep them closer together.