Question 1
a. Using the published national accounts for Australia and the United States for the period March quarter 2014, compare and contrast the behaviour of economic growth in these two countries. You should consider the year to the March quarter 2014 (that is, March quarter 2013 to March quarter 2014), and the three months to the March quarter 2014 (that is, December quarter 2013 to March quarter 2014).
So, comparing these two economies, what was the rate of growth of real GDP in each of these two periods? Use seasonally adjusted data.
b. Which components of expenditure grew at the highest and lowest rates and which contributed the most and the least to GDP growth in each of the two economies for the period December quarter 2013 to the March quarter 2014. Provide the values in tabular form.
(In answering part (b) you should look at the following expenditure categories for Australia: Final consumption expenditure, distinguishing Household from General Government, Total Gross Fixed Capital Formation, distinguishing Total Private Gross Fixed Capital Formation from Total Public Gross Fixed Capital Formation, Exports and Imports (or Net Exports). (Gross Fixed Capital Formation means Investment expenditure).
For the United States the closest equivalent expenditure categories that you should consider are designated as: Personal Consumption Expenditures, Gross Private Domestic Investment, Net Exports of Goods and Services (separated as Exports and as Imports), Government Consumption Expenditures and Gross Investment, and Change in Private Inventories.
There is no need to disaggregate within any of these categories and consider the smaller, narrower categories of expenditure which are given in the tables.
c. Using Tables 16 and 17 of the Australian National Accounts, determine which are the largest and second largest industry sector in the Australian economy in the March quarter 2014.
Which industry experienced the highest rate of growth in the twelve months March quarter 2013 - March quarter 2014?
(In answering this question you need only consider the aggregate industry sectors marked A, B, C. Etc. Do not disaggregate within each of these sectors.)
Question 2
Now read the slides titled Economic Indicators. First, you should understand the nature and use of economic indicators.
Then, choose three different leading indicators for the Australian economy and use them to determine what they suggest about the performance of the Australian economy for the next twelve months.
Now locate the same indicators (or very similar indicators), for the United States.(All relevant indicators are available from the internet).
Compare and contrast the behaviour of the indicators for the United States with those for the Australian economy.
In particular do they suggest that the two economies are likely to experience a similar or a different economic performance for the next twelve months in terms of the growth of real GDP?