Consider the following table that reports selected macroeconomic data for Australia for 2015and 2016.

Australia 2015 2016

Labour Force Participation rate (LFPR) 64.72% 65.27%

Employed persons (E) 10,000,000 10,100,000

Unemployed persons (UE) 780,000 600,000

Gross Domestic Product (GDP) ($m) - 220.5

Consumer Spending (C)($m) 118.87 121.84

Investment Spending (I) ($m) 30 44.53

Government Spending (G) ($m) 41.8 42.85

Export (X) ($m) 15.2 13.6

Import (M) ($m) 2.96 2.32

Inflation rate 2.4% 5.5%

Answer the following questions:

A)Define real GDP and explain what it means. Calculate real GDP for 2015.(3 marks)

B)Calculate the economic growth rate between 2015 and 2016.(3 marks)

C)Calculate the unemployment rate for 2015 and 2016.(2 marks)

D)Given that the LFPR increased from 64.72% to 65.27% and the changes in the unemployment rate between 2015 and 2016, what does this say about employment in Australia?(3 marks)

E)Is Australia above or below full employment in 2016? Why? Show this using an AD/AS model.(6 marks)