Question 1. Distinguish between real GDP and potential GDP and describe how each changes over time. Show your workings.

Question 2. Classify each of the following items as a final good or service or an intermediate good or service and identify each of the items as either a component of consumption expenditure, investment or government expenditure on goods and services.

(a) Security system bought by the ANZ Bank.

(b) New coffee grinders bought by Starbucks.

(c) Starbuck's grande mocha frappuccino bought by a student at a campus coffee bar.

(d) New helicopters bought by Australia's army.

Question 3. Use the following data to calculate aggregate expenditure and exports of goods and services. Show your workings. Government expenditure: $39 billion Aggregate income: $900 billion Consumption expenditure: $211 billion Investment: $221 billion Imports of goods and services: $230 billion

Question 4. Why does unemployment arise and what makes some unemployment unavoidable? Please explain.

Question 5. The Bureau of Statistics in country A reported the following data for October 2023: Labour force participation rate: 79.9 per cent Working-age population: 19,429,826 Employment-to-population ratio: 75.9 per cent

Please calculate the labor force and unemployment rate. Show all your workings. (a) Labor force. (b) Unemployment rate.

Question 6. In March 2023, in the economy of Country B, 10,000 people were employed, 1,000 were unemployed, and 5,000 were not in the labour force. By the end of April 2023, 80 people lost their jobs and were actively looking for new ones, 20 people quit their jobs and were actively looking for better ones, 150 unemployed people started a job, 50 unemployed people felt disappointed with the job markets and chose to quit the labour force, 150 people lost their jobs and did not look for new ones, and 90 people quit their jobs and retired.

Calculate for the end of April 2023. Show your workings.

(a) Unemployment rate. (b) Employment-to-population ratio. (c) Labor force participation rate.