1 Economics for Management (23706) Spring 2021 Assignment Topic and instructions Assignment Topic: “Australia's COVID-19 Delta outbreak resulted in state lockdown and extended international borders closure. Each week of the Sydney lockdown is costing the broader economy around A$1 billion, based on various estimates from economists, most of whom are predicting a lengthening of restrictions into mid-August. That would imply an economic hit of around A$7 billion in the third quarter from potentially seven weeks of lockdown. "Such an outcome on our figuring would see the national economy contract over the September quarter, by around 0.7%," said Gareth Aird, head of Australian economics for Commonwealth Bank of Australia. The RBA slashed interest rates three times last year to a record low of 0.1% and announced a massive bond buying programme to help push borrowing costs down.” Given the above case study, your manager has asked you to prepare a presentation using the key Macroeconomic Variables and their relevant factors (T1 & T2) and then applying them to a Macroeconomic model (T2 & T3) to discuss the effects of COVID-19 pandemic on the Australian economy. You are also required to further comment on the key macroeconomic indicators (T1) as well as the impact on the balance of payments (T5). In addition, you need to analyse the measures that has been implemented by the Reserve Bank of Australia (RBA) in response to the COVID-19 pandemic (T4). Also, analyse the measures by the government as a response to COVID-19 pandemic and the effectiveness of such measures (T4). You need to explain the underlying economic logic of these measures and assess the effectiveness of these measures. Based on your assessment, make a forecast of how our Central Bank (RBA) may move the cash rate (L4) in the next 6 months to ameliorate the impact. In your assessment and forecast, please use all resources available till end of August 2021, and forecast for the months September 2021 to February 2022. Assignment Totals (20%) Part 1: Group (4 members): Prepare 7 to 8 PowerPoint slides (10%), including the reference list, due on Friday October 1st, at 11:55pm to be uploaded on Canvas. Written submission of PowerPoint slides only, no class presentation required. Note: use dot points to present the information and graphs. Part 2: Individual Memos (5% content; 5% language) due on Friday October 15th, at 11:55pm to be uploaded on Canvas. Write a memo of 500 words (2 pages excluding the reference list) from the above PowerPoint slides to brief your manager on the current Australian economy, including making a forecast on the Australian economy and the cash rate. (2 pages, excluding the reference list, font size 12 with 1.5 line spacing. No visual data or charts). Further electronic submission instructions would be provided later.