External environment - Economic indicators
Worksheet 3 - Economic growth
1. Go to the data section and find the figures for economic growth for the last 15 years. To do this you will need to look at the following variable:
- ABMI GDP at constant prices
You will then need to calculate the percentage change in GDP each year as this is the rate of economic growth. Fill in the figures in the table below (or download them into a spreadsheet program).
| Year | GDP at constant prices | Economic growth (%) |
|---|---|---|
| 1988 | ||
| 1989 | ||
| 1990 | ||
| 1991 | ||
| 1992 | ||
| 1993 | ||
| 1994 | ||
| 1995 | ||
| 1996 | ||
| 1997 | ||
| 1998 | ||
| 1999 | ||
| 2000 | ||
| 2001 | ||
| 2002 | ||
| 2003 |
(5 marks)
2. Use the axes below to plot the economic growth figures (or use a spreadsheet package graphing function).
(2 Marks)
3. Using the figures and the chart, what evidence is there that the UK has experienced a regular cycle of business activity in the time period given?
(6 Marks)
4. Identify five products where demand is likely to change significantly as the rate of economic growth changes (i.e. they are sensitive to income changes).
a)
b)
c)
d)
e)
(5 Marks)
5. Identify five products where demand will hardly change at all as the rate of economic growth changes (i.e. they are not sensitive to income changes).
a)
b)
c)
d)
e)
(5 Marks)
6. What strategies might you adopt, in the face of changing levels of economic activity, if you are a firm selling products of this nature?
(5 Marks)
7. Assess the options available to the government to try to increase the rate of economic growth.
(12 Marks)
Total Marks = 40
