Student Workpoint 14.6 Be knowledgeable Situation favourable in Germany, but the outlook is not bright "For years Germany lagged the rest after in booming emerging of the eurozone , says argue that the outlook for consumer economies. There, Germany has a Wirtschaftswoche. "Now we're spending is not encouraging. stronger presence than its European Domestic demand is "the leading it." Analysts reckon that rivals. Achilles' heel of the German German GDP grew by up to 1.5% in With exports and now domestic recovery , says one analyst. The the second quarter alone. That's an investment picking up, the labour trouble is that the global outlook is annualised rate of market is improving. The deteriorating as company restocking 69%-twice the figure expected for unemployment rate is at an slows and government fiscal America this year. 18-month low of 7.746. The missing stimulus programmes fade. The The rebound in aggregate piece of the puzzle is consumption. deepening mess in the eurozone demand is being driven by exports, So far, at least, households have periphery doesn't help either. The which account for a comparatively shown little indination to open their eurozone still accounts for 450% of hefty 40% of GDP. They jumped by wallets. Retail sales are still 2.49% Germany's exports. 9.29% month-on-month in May, an below last year's recession-hit levels. The German economy is highly annual rate of 22.99%, the strongest Consumer confidence is also under geared to global growth. And with growth since the early 1990s. IHS its long-term average. growth everywhere slowing, it looks Global Insight expects exports to Wage growth is also slow, due to likely to struggle over the next few climb by 109% this year, compared to the previous rise in unemployment, months. 690-79% in other major European and fiscal tightening is on the way Source: Adapted from Money Week, July 16, 2010 economies. Germany's high-end next year. Given all that, analysts capital goods are especially sought- Define the following terms identified in bold in the text: a GDP b Aggregate demand. 2 Explain why "Germany's high-end capital goods are especially sought-after in booming emerging economies"? $ Using information from the text, try to explain changes to any of the components of AD