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Assessment Description

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Prepare short written responses (no more than 250 words) to the following five (5) questions.

Question 1 (5 marks)

Explain why real GDP might be an unreliable indicator of the standard of living.

Question 2 (5 marks)

Why does unemployment arise and what makes some unemployment unavoidable?

Question 3 (5 marks)

Consider the following statement: ‘When the average level of prices of goods and services rises, the inflation rate rises.’ Do you agree or disagree? Explain.

Question 4 (5 marks)

What is the aggregate demand (AD) curve and why does it slope downwards? Explain.

Question 5 (5 marks)

What is the long run aggregate supply (LRAS) curve and why is it vertical? Why does the short run aggregate supply curve slope upwards?

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