Consider the information below for Country G and answer the questions:

Key Economic indicators for country G:

Country G

2016

2017

Consumption Spending

91.97

90.56

Fixed Investment spending

28.28

27.6

Government spending

35.35

32.25

Export

20.39

22.50

Import

21.08

19.48

Depreciation expenditures

5.72

6.14

Saving

4.60

4.22

Transfer Payments

40

42

According to a reliable source, Country G's jobless rate is more than double the Eurozone average of 12 per cent. The Eurozone average has also shown signs of improvement, while Country G's unemployment problem continues to deepen.

The number of employed is 3.637 Million, the number of unemployed is 1.176 Million and the working age population is 6.678Million. The latest unemployment rate for Country G has risen to a record high, the country's youth are paying the heaviest price, with a staggering 64.9 per cent of 15 to 24-year-olds out of work.

Harsh austerity measures aimed at repairing the country's high debt-to-GDP ratio has not helped the situation either.

In the interim, it's hoped that the tourism sector will provide a buffer against even worse employment outcomes. Tourism accounts for about one in five jobs and 17 per cent of Country G's economic output.

3. a). Calculate the GDP for year 2016 and 2017 for Country G.

3. b). Calculate the labour force participation rate for Country G.

3. c). Calculate the unemployment rate for Country G.

3. d). Use the AD-AS model to show the impact of the austerity (contractionary) measures on country G's economy. How would this impact on the unemployment and price level?Label the x and y axes, the curves and explain.Assume the economy is initially below full-employment.