UNIT 3 AOS 2 (T) - part 2 - SSEG

Question 1

Strong and sustainable econoimc growth def

GOAL 1

Answer 1

CHECK IF THERE I WROTE “EMPLOYMENT GROWTH”

The governments strong and sustainable growth is to achieve
* the highest rate of growth in real GDP (which is)
* consistent with employment growth, but without running into excessive inflationary, external or environmental problems.
* Generally considered to be in the range of “3-3.5% of real GDP growth per annum”

check if add “3-3.5% of real GDP growth per annum”

check “rate of growth in real GDP”

Question 2

How is real GDP measured?

GOAL 1

Answer 2

• The chain volume measure of GDP (is used by the ABS) for an estimate real GDP in the economy
• That is, it involves using price from previous period and applying them to the current period volumes

Question 3

Nominal GDP and Real GDP DEF/DIFF

def

Answer 3

NOMINAL
* increase in the value of good and services produced in Australia
* unadjusted for any inflationary impact
* [if ↑wages (nominal) = (but lower real wages)]

REAL
* increase in the volume of goods and services produce in Australia AS A CONSTANT
* adjusted for inflation

diff:
real gdp shows changes in the actual volume of goods and services produced and thus is considered a more accurate measure for a countries eco growth.

CAREFUL BETWEEN YES/NO INFLATION

Question 4

Consequences for too slow [SSG]

goal 1

Answer 4

= ↓ad
= ↓ production
= ↓ DDL
= ↑unemployment —– (1)
(can also link»people move from factor to transfer income)
= ↓ disposable INCOMES
= ↓ less access to goods and services ——-(2)
(NMLS = lower mental health) ——-(3)

NMLS - less money = more crime

Question 5

Consequences for too STRONG [SSG]

goal 1

Answer 5

↑EG
↑production

++++++++++++++++++++++

1/ Environmental pressures
=pollution
= ↓MLS
++++++++++++++++++++++

↑AD
↑EA
D>S
↑demand inflaton pressures
↓ real value of money
= erosion of purchasing power

++++++++++++++++++++++
2/ ↓ access to g/s
++++++++++++++++++++++

For exchange rate
1/ ↑EG
= ↑int trading
= ↑high demand for AUD
= ↑apperiation
= loss of int comp

2/ [after high demand inflation]
↑demand inflaton pressures
↓ real value of money
=erosion of purchasing power
=Aust g/s appear more expensive relative to another countries g/s THEN PREVIOUSLTY (assuming their inflation rates is relatively loewer)
= trading partner incentives to trade with other trading partner
= loss of international competiveness

Question 6

Consequences for too STRONG [SSG] for exchange rate

Answer 6

For exchange rate
1/ ↑EG
= ↑int trading
= ↑high demand for AUD
= ↑apperiation
(also check link below)
= loss of int comp

2/ [after high demand inflation]
high SSG
↑EG
↑production
↑AD
↑EA
D>S
↑demand inflaton pressures
↓ real value of money
=erosion of purchasing power
=Aust g/s appear more expensive relative to another countries g/s (assuming their inflation rates is relatively loewer)
= trading partner incentives to trade with other trading partner
= loss of international competiveness

↓AUD