Question 1 a) China is one of the fastest growing economies in the world and is one of Australia’s major trading partners.  Discuss the implications for the Australian economy of a weaker  than expected Chinese economy in 2016. Illustrate your arguments with the AS-AD model. b) Using an appropriate model, explain how a weakening Chinese economy might affect the value of the Australian dollar.  Note that Australia has a flexible exchange rate system. Question 2. Assume that another drought in Australia this summer sharply reduces Austr... More