do you measure inflation? According to ABS, average weekly spending on 'recreation' in 2009-10 was $155 and in 2015-16 $175. Based on thi information, calculate the price index for 2015-16 period and note what does this mean? 2. Business cycle and aggregate demand and inflation 2.1 Refer to chart 1 below which shows Australia's 'output gap' since 1980 and answer the following; Explain what does the term 'Output gap' means? What do these economic fluctuations mean, that is where the line graph is above and below zero? How do positive and negative 'output gaps' impact on country's rate of unemployment and inflation levels? Chart 1 FIGURE 10.2 Output gap latential GOP for Australia PERCENTAGE OF POTENTIAL GDP 1985 1986 1981 1982 1983 1980 Output gap as % of potential GDP itahaon, April 2014. Sources Inbe y Fund, World Econom 2.2 What do you understand by the term 'cyclical unemployment' in the tourism industry? Support your answer with relevant graphs to explain the concept, that is changes in labour demand and supply in relation to real wages. OFAFE SA 4/15