“GDP: Australia’s economic growth picks up on consumer spending, but can the good time last? By M. Janda and S. Letts (from ABC news of 6 th September 2017) is available at: http://www.abc.net.au/news/2017-09- 06/gdp economic- growth-abs- data-june- quarter-2017/8877618
Access the article at the URL given above and answer the questions in the spaces below. Use full sentences and show all necessary working but do not use more space than is given here. Other references are not necessary but, if you do use any (for example, online economics glossaries) please list at least the URL of your source.
(1) During the 2017 June quarter, real GDP grew as well as real GDP per capita. State the rates reported in the article and explain why they differ.
(2) What is the official definition of a recession? Based on the diagram “GDP growth Seasonally adjusted 1990-Present” did Australia have a recession?
(3) From the diagram “GDP growth Seasonally adjusted 1990-Present” state the highest two peaks and the lowest two troughs of the business cycles. (Please note that the diagram is interactive)
(4) Compare the effect on GDP of the highest growth rate from your answer in (3) with the 2017 June quarter real growth rate from your answer in (1) if they were sustained over a period of 20 years.
(5) Considering the income identity equation, describe which sectors performed well and which ones did not.
(6) According to the article “There was also a slight decline in nominal GDP growth”. Explain why nominal and real GDP differ.