Question 1A

Use the information from the graphs above and your own research to draw a AD-AS diagram for the country you have been assigned to and Australia at three points in time: 2005, 2007 and 2012.

The AD-AS should clearly show the price level, Real GDP and unemployment rate. Clearly identify either a Recessionary gap, inflationary or the long run equilibrium at the each time point.

Briefly explain what evidence you have used to justify your graph. You may use any information from credible sources (wikipedia and similar websites are NOT credible). We highly recommend using the IMF's World Economic outlook reports from 2004 to 2012 found here:

http://www.imf.org/external/ns/cs.aspx?id=29

Question 1B

For the country you have been assigned to (not Australia), do research and explain what happened in the economy between 2005-2007 and 2007-2012. Show how these changes took place by shifting the appropriate lines in a AD-AS diagram.

Question 1C

Based on both research and the above figures, briefly discuss whether the country you have been assigned to and Australia was hurt more by the GFC in terms of changes in real GDP and unemployment.