1. GDP & Unemployment, inflation & CPI 1.1 Research the value of tourism to the economy of South Australia for period 2019-20: Document tourism industry's direct and indirect contribution to South Australia's Gross State Product (GSP) for period 2019-2020 in $ terms. What was the percentage change in the direct and indirect GSP compared to 2018-19 period? What percentage was the tourism GSP of the total state GSP? In considering tourism consumption, what was South Australia's contribution in percentage and $ terms of Australia's total tourism consumption? What percentage of SA's tourism consumption is attributed to travel within the state? What was tourism industry's direct and indirect Gross Value Added (GVA) in $ terms? What percentage was tourism's direct share of total SA's GVA? 1.2 Explain the difference between nominal and real GDP? Refer to table 5 below and calculate the nominal and real GDP for quarter 4, GDP deflator price index, and calculate real GDP using GDP deflator index. Table 5 Time ADR of Quantity Average Quantity Nominal GDP Real rooms of rooms price of of tea sold GDP Deflator GDP sold tea using GDP deflator Q3 $135 142,000 $3.90 1,000,000 Q4 $150 177,000 $4.00 1,150,000 Real GDP 041.3 In considering tourism industry's employment contribution to SA's economy; What is tourism industry's direct and indirect employment contribution in thousands? What percentage is this of the total state employment? According to South Australian Tourism Commission (SATC), what is the target for jobs in the tourism industry by 2030? 1.4 In reference to inflation and CPI in Australia, answer the following; What is the current rate of inflation in Australia and what does this mean? Explain how do you measure inflation? According to ABS, average weekly spending on 'recreation' in 2009-10 was $154 and in 2015-16 $172. Based on this information, calculate the price index for 2015-16 period and note what does this mean? 2. Business cycle and aggregate demand and inflation 2.1 Refer to chart 1 below which shows Australia's 'output gap' since 1980 and answer the following; Explain what does the term 'Output gap' means? What do these economic fluctuations mean, that is where the line graph is above and below zero? How do positive and negative 'output gaps' impact on country's rate of unemployment and inflation levels? Chart 1 2.2 What do you understand by the term 'cyclical unemployment' in the tourism industry? Support your answer with relevant graphs to explain the concept, that is changes in labour demand and supply in relation to real wages. 2.3 Draw a graph to explain the three critical aspects of aggregate expenditure in driving GDP. 2.4 According to ABS data during the period 2015-18, the 'real' wages have only increased by 0.1%. RBA announced a rate cut by 25 basis points on 2 July 2019, decreasing the rate from 1.25% to 1.0%. In light of the above, draw a graph to explain the relationship between changes in real interest rates, investment in capital markets and capacity to save by households/businesses. 2.5 Draw relevant graphs to explain the relationship between inflation and its impact on output/GDP, including how RBA's aggressive or passive monetary policy in controlling inflation may impact on output level in an economy. 2.6 Construct a graph of aggregate demand inflation (ADI) curve to explain macroeconomic event of 'recession'.3. Interest rates and Fiscal & Monetary policy 3.1 Explain the rate that RBA sets and how this rate influences other rates within an economy. Support your response with a relevant graph. 3.2 Describe what are 'ES' funds and their relationship with cash rate and cash market. Explain through a graph why the demand curve for ES funds is downward sloping. 3.3 In July 2019, the Australian Government announced $158b of tax cuts. Describe the nature of this policy and support your answer with relevant graph on how this will impact aggregate expenditure and inflation levels. 3.4 What is the difference between nominal and real interest rates? Describe RBA's policy rule and draw a relevant graph to support your answer. 3.5 Explain how fiscal and monetary expansion policy would differ in investment by tourism businesses and impact on tourism imports and exports