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NSWEconomicsQuick questions
Topic 3: Economic Issues
Quick questions on Economic growth and the business cycle in Australia (HSC Economics Topic 3)
10short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is economic growth defined?Show answer
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.
What is measurement of economic growth?Show answer
Three approaches to measuring GDP, which should give the same answer:
What is sources of economic growth?Show answer
Aggregate demand factors (short to medium term):
What is the AD/AS framework?Show answer
Draw the AD/AS diagram with real GDP on the horizontal axis and the price level on the vertical axis:
What is the business cycle?Show answer
The business cycle is the recurring pattern of expansions and contractions around the trend rate. Four phases:
What is australia's growth performance?Show answer
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.
What is effects of economic growth?Show answer
Negative effects (especially during a boom):
What is confusing nominal with real GDP?Show answer
Always use real GDP for growth comparisons.
What is treating recession as just "any negative quarter"?Show answer
The technical definition is two consecutive negative quarters; some economists prefer a broader, "growth recession" definition.
What is quoting only the AD side?Show answer
Long-run growth depends on AS factors (productivity, labour force, capital stock). Markers reward AS analysis.