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How External Forces Effect the Australian Economy

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How external forces effect the Australian economy

Real Gross Domestic Product is a measure of GDP. RGDP is an inflation-adjusted measure that reflects the final market value of all goods and services produced at the end of any given year, regardless to any change in price or purchasing power. The inflation rate is a measure of inflation and is the percentage increase in the price of goods and services expressed on a yearly basis. The inflation rate can be measured by observing the consumer price index and the GDP Price Deflator. The unemployment rate is a measure of unemployment. The unemployment rate is a percentage of the total workforce who is currently unemployed. Low rates are seen as inflationary because of the upward pressure on incomes, and high rates lead to a decrease in consumer spending. | |2003 |2004 |2005 |2006 |2007 |
|RGDP Growth |3.4% |3.2% |3.2% |2.5% |4.4% |
|Inflation Rate |2.4% |2.6% |2.8% |3.3% |3.0% |
|Unemployment Rate |6.3% |6.0% |5.1% |5.1% |4.9% |

[pic] http://www.dfat.gov.au/GEO/fs/aust.pdf (RGDP Growth & Inflation Rate) http://www.indexmundi.com/australia/unemployment_rate.html (Unemployment Rate)
The business cycle is the fluctuations in the economic growth over a long period of time. The business cycle can rather irregular and does not tend to follow any given particular pattern. There are four main stages that occur during the business cycle; an expansion, where growth is above average, a peak, the highest point of the growth, a contraction, where growth is below average and a trough, the lowest point of growth. RGDP growth is one the main indicators of the strength of the economy. If RGDP is increasing then the economy is said to be experiencing an expansion, but if RGDP is falling then the economy is said to be in a recession and experiencing a contraction. During an expansion the unemployment rate falls and…...

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