1.Consider the data in the following table. Macroeconomic data for an economy:2017

Annual GDP growth rate

-1.70%

Consumption spending

$91 billion

Investment spending

$78 billion

Government spending

$98 billion

Net exports (= exports - imports)

$1 billion

Employed persons

10 million

Unemployed persons

2 million

Working age population

27 million

Total population

30 million (or 0.03 billion)

Inflation rate

-0.16%

Calculate GDP for this economy.(2 marks)

2.Using the data in above question, calculate GDP per capita for this economy.What does this indicate?State two disadvantages of this measure being based on GDP.(5 marks)

3.Using the data in above question, calculate the unemployment rate and the labour force participation rate for this economy.Explain why we calculate both of these rates.(3 marks)

4.Using the data in above question, which phase of the business cycle is this economy currently in? Why?(3 marks)

5.Using the data in above question, what type of unemployment do you think this economy will have a lot of? Why?(2 marks)