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

Strong meaning (in SSG)

Goal 1

Answer 2

• ↑ real incomes + LS
• employment opportunities
• ↑ MLS and NMLS (mental health)

Question 3

Sustainable meaning

(for SSG)

Goal 1

Answer 3

• not excessive and not too low
• high inflation → too much spending
• external pressures → ↑ imports (worsens external balance)
• environmental degradation → climate change → over use of non renewable resources

Question 4

How is real GDP measured?

GOAL 1

Answer 4

• 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 5

Nominal GDP

def

Answer 5

• increase in the value of good and services produced in Australia
• unadjusted for any inflationary impact

====

• if ↑wages (nominal) = (but lower real wages)

Question 6

Real GDP

def

Answer 6

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

CAREFUL BETWEEN YES/NO INFLATION

Question 7

Consequences for too slow [SSG]

goal 1

Answer 7

= ↓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 8

Consequences for too STRONG [SSG]

goal 1

Answer 8

↑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 9

MAIN DOMINO

ad = …..

Answer 9

AD = PRODUCTION = real GDP = Economic growth

Question 10

diff between nominal and real GDP

Answer 10

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.

Question 11

Consequences for too STRONG [SSG] for exchange rate

Answer 11

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