Recent Question/Assignment

Students will for analyse the economic conditions facing first time investors entering the stock market by applying the economic theories and concepts introduced in the Unit. The objective of the Individual Essay is to illustrate the application of economic concepts and theories to a real-world issue. Thus you will be required to review economic concepts that apply to your task, such as:
· demographic changes
· economic growth rates
· inflation/deflation expectations
· monetary and fiscal policy

the general background is to put yourself in the position of a first time investor in the stock market, and to consider some of the broader economic issues which may impact on stock market prices, of which there are a wide variety. Some of these issues include:

· supply and demand
· interest rates
· taxes
· inflation rate
· economic growth rate
· demographic changes

What you need to do in your paper, therefore, is to explain how these factors (approximately 3) impact on the stock market, either positively (prices going up), or negatively (prices going down). You will need to state the basic economic theory you are applying, and with the use of diagrams or graphs, explain how this impacts stock market prices.

You may examine the Australian stock market, or international stock markets as you see fit.