Quick questions on Economic growth and the business cycle in Australia (HSC Economics Topic 3)

Economic growth is the increase in the real output of an economy over time. The standard measure is the percentage change in real GDP, year-on-year or quarter-on-quarter.

The business cycle is the recurring pattern of expansions and contractions around the trend rate. Four phases:

Australia is one of the longest-running expansions in advanced-economy history. From 1991 to 2020, Australia recorded 29 consecutive years without a technical recession (RBA, ABS), the longest unbroken expansion among OECD countries.

Negative effects (especially during a boom):

A correctly labelled AD/AS diagram (LRAS vertical at potential output, SRAS upward sloping, AD downward sloping) earns marks on its own, but top responses explain WHY the curve shifted (a named component of C, I, G or X-M, or a named AS factor) rather than just drawing it.

First describe the trend (direction, the endpoints with figures, above or below trend), then explain using AD and/or AS mechanisms tied to the actual numbers, then, if asked to evaluate, judge the extent or significance.

"Growth has slowed" earns little; "real GDP growth fell to about 1.3% in 2024-25, below the roughly 2.0 to 2.25% trend rate" earns marks a vague claim cannot.

Define economic growth and state the real GDP growth formula. [3 marks]

Explain how AD and AS factors influence Australian economic growth, using a diagram. [6 marks]

Assess the extent to which aggregate supply factors explain Australia's long-run growth performance. [8 marks]