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1.Impact of COVID 19 on the Australian economy (RBA) The outlook for the Australian and global economies is being driven by the COVID-19 pandemic. The necessary social distancing restrictions and other containment measures that have been in place to control the virus have resulted in a significant contraction in economic activity, but economic conditions will improve as the pandemic is brought under control and containment measures are relaxed. Global GDP is expected to fall sharply in the first half of 2020. The declines in the March quarter were driven by a contraction in Chinese and euro area activity as well as the rollout of containment measures elsewhere late in the quarter. A further fall in global GDP is expected in the June quarter, with many countries expected to record quarterly declines in GDP. The Australian economy is expected to record a contraction in GDP of around 10 per cent over the first half of 2020; total hours worked are expected to decline by around 20 per cent and the unemployment rate is forecast to rise to around 10 per cent in the June quarter. Inflation is expected to be negative in the June quarter largely as a result of lower fuel prices and free child care. (Source RBA) ABS data show that employed people were 13013000 in March 2020, and 12418700 in April 2020 respectively; unemployed people were 718800 in March 2020 and 823300 in April 2020. The participation rate was 66.0% in March 2020 and 63.5% in April 2020. Fiscal Policy Responses Over the past month, the Federal Government has announced an unprecedented fiscal injection of $194 billion (almost 10 per cent of GDP) consisting of $39 billion directly to business, $25 billion to households and the $130 billion Job-Keeper payment to support business and households through the COVID-19 shutdown. Monetary Policy responses The Reserve Bank of Australia has reduced the cash rate to 0.25%.

2.Find the equivalent annual worth for the cash flows shown, using an interest rate of 15% per year. Monetary units are $1000. Year 1 2 3 4 5 20 60 6 7 8 9 60 60 60 60 Cash Flow, $ | 20 20 20 3.27 For the cash flows shown in the diagram, deter- mine the value of x that will make the present worth in year 8 equal to $ -50,000.). i = 10% per year 0 1 2 3 4 LO 5 6 7 8 Year 2x 2x 2x 4.9 For a Federal Credit Union that offers an interest rate of 8% per year, compounded monthly, deter- mine the nominal rate per 6 months.