Question

• a) Go to the Australian Bureau of Statistics website and find the latest (December 2019) figures for output. In particular, find the percentage change in Trend GDP from the September Quarter 2019 to December Quarter 2019; and the December Quarter 2018 to December Quarter 2019; and the percentage change in Seasonally Adjusted GDP over the same two periods.

• b) Do the same for the December 2018 figures. (1 mark)

• c) Explain whether, based on the GDP data and all else equal, you would prefer to be incumbent Government running for re-election this time last year or now.

• d) Now find the ABS data for the Consumer Price Index, specifically report the figures for the December 2019 and December 2018 All Groups CPI and the Seasonally Adjusted CPI.

• e) What are the categories that experienced the most significant price rises and falls? Discuss whether, given your usual consumption bundle, you were likely better or worse off in December 2019 compared to September 2019.

• f) With COVID-19, there are talks about countries entering a period of recession. The article defines a technical recession as being two consecutive quarters of negative real GDP growth. What is the NBER (National Bureau of Economic Research) definition of a recession? (1 mark)

Answer 1

a)the Australian economy grew by 0.5% in seasonally adjusted chain volume terms in the December quarter 2019. Through the year GDP was up 2.2%.the term of trade fell 5.3%and household saving ratio decreased to 3.6%

b)household net worth increased $47.7 billion to $10.5 trillion in 2018-19, while the general government remained relatively unchanged at $1.6 trillion. Australian gross domestic product grew by 1.9% in 2018-19 remaining unchanged from the annualized growth published in the June quarter 2019 national accounts.

c)the annual growth rate of Australia remain unchanged and the government may face strong competition and challenges in the re-election d)rose 0.3% in the March 2020 quarter compared to a rise of 0.7% in the December 2019 quarter (cpi) e)the most significant price rises were vegetables , tobacco, secondary education, pharmaceutical products. price falls in automotive fuel. f)NBER defines a recession as" a significant decline in the economic activity spread across the economy lasting more than a few months, normally visible in real GDP , real income , employment, industrial production and wholesale-retail sales."