Consider the source below and answer the following question: 1.Which phase of th
ID: 1216305 • Letter: C
Question
Consider the source below and answer the following question:
1.Which phase of the business cycle in Spain in during August 2013? Why? (3 marks)
2.According to the following the equation Y= C+I+G+(X-M) ,how have the components of real GDP changed over 2012/2013? (3 marks)
3.What is the unemployment rate in Spain in August 2013? (3 marks)
Spain | Economic Indicators 13-Aug Aug-12 Real GDP Annual Growth Rate -1.70% -2% Working Age Population 46.2m 46.15m Employed Persons 16.7 m 15.53m Unemployed Persons 4.884 m 4.876 m Exports 20 m 20.39 m Imports 19.48 m 21.08 m Government Spending 98.17m 99.36m Industrial Production -4.60% -1.60% Consumer Spending 91.64m 91.97m Consumer Price Index 103.73 104.24Explanation / Answer
Answer. In august 2013, the real gdp growth rate is -1.70%, which is negtive growth rate. It indicates Trough phase of business cycle (depression).
The components of real gdp has changed over 2012-2013 in the following way:
1. Consumer Spending: It has slightly decreased from 91.97 million to 91.64 ( a decrease of 0.35%.)
2. Industrial Production: It has severely decreased from -1.6% to -4.5%
3. Government Spending: The government spending decreased from 99.36m to 98.17m. A downfall of -1.19%.
4. Net exports (Exports - Imports) - In 2012, the next exports were -0.6m . In 2013, it was 0.52m , So, overall the net exports has increased ( majorily due to fall in imports).
Unemployment rate in 2013 : (Unemployed / working age population)*100 = (4.884m / 46.2m )*100 = 10.57% (which is high).