Answer to Question #80540 in Macroeconomics for lia

Question

1. For the following statements, state Agree or Disagree. And provide brief explanations.

a) More than half of the money issues by the government is actually held by people in foreign countries. Australia is hence less than half as wealthy as government statistics indicate’. (1.5 marks)

b) Assets are things of value people own. Liabilities are debts. Hence, a bank will always consider a deposit in the account as an asset and a car loan as liability. (1.5 marks)

c) In 2010 hundreds of thousands of jobs were eliminated from the Australian economy. This means that unemployment rate must have risen. (1.5 marks)

Answer 1

1.
a) More than half of the money issues by the government is actually held by people in foreign countries. Australia is hence less than half as wealthy as government statistics indicate’.
It's false, because the money held by people in foreign countries is counted as investment to other countries.

b) Assets are things of value people own. Liabilities are debts. Hence, a bank will always consider a deposit in the account as an asset and a car loan as liability.
It's false, because for bank a car loan is an asset and a deposit is a liability.

c) In 2010 hundreds of thousands of jobs were eliminated from the Australian economy. This means that unemployment rate must have risen.
It's true, if less of other jobs were created at the same time.