Question

The table below describes the development of some key macroeconomic indicators of the Czech Republic for period 2015 – 2019.

		2015	2016	2017	2018	2019
GDP	%, y/y, real terms	5,3	2,5	4,4	2,8	2,6
Final Consumption Expenditure	%, y/y, real terms	3,2	3,4	3,4	3,2	2,9
Household Expenditure	%, y/y, real terms	3,8	3,6	4,2	3,2	3,0
Gross Capital Formation	%, y/y, real terms	13,0	-4,3	4,0	5,6	3,4
Gross Fixed Capital Formation	%, y/y, real terms	10,2	-3,1	3,7	7,6	2,8
Exports of Goods and Services	%, y/y, real terms	6,1	4,3	6,8	4,5	1,2
Imports of Goods and Services	%, y/y, real terms	6,9	2,8	6,0	6,0	1,7
General Unemployment Rate	%	5,0	4,0	2,9	2,2	2,0
The share of unemployed persons	%	6,57	5,55	4,26	3,20	2,80
Average Gross Nominal Wages	%, y/y	3,2	4,4	6,8	7,5	7,1
Rate of Inflation (CPI)	%	0,3	0,7	2,5	2,1	2,8
Deflator of GDP	%, y/y	1,2	1,3	1,4	2,6	3,5
Exchange Rate: CZK/EUR	year average	27,283	27,033	26,330	25,643	25,672
General Government deficit(surplus)	in % of GDP	-0,6	0,7	1,5	0,9	0,3
General government debt	in % of GDP	36,4	33,8	32,2	30,5	29,0

With regards to the data contained in the table above, provide the following information:

1. Describe the development of GDP in the Czech Republic in 2019 using the expenditure approach.
2. Briefly explain a relatively high growth of household’s expenditure during last 5 years.
3. Explain the difference between General Unemployment rate and the Share of Unemployed persons.
4. Explain key factors of the development of the General Unemployment Rate of the Czech Republic in a given time period.

Answer 1