Mr Powell homework Wednesday 1st October 2014

1)

The Real means that it has been adjusted to GDP. Gross means the aggregate or total. Domestic means produced in that country and Product is the flow of new output in a particular time period. Real Gross Domestic Product is the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

2)

It is clear that there have been two recessions; these are shown by the negative percentages. The one in 2008 till mid 2009 with a negative peak of (-2.5%) is obviously a lot more dramatic than the one in 1990-91 where the negative peak was (-1%). There are also other dips but these are far less notable compared to that of the recessions. What is possibly the most prominent feature though is the long period of economic growth between 1992-2007 where the economy is obviously faring well. The average increase seams to be just over 0.75% each year, this feature seams to imply that the UK between those times was growing. Another point of consistent real GDP growth seams to be from 2013 onwards. Both now and in our block between 1992-2007 came about after recessions. This would imply that after a recession in the UK there is a time of rejuvenation and economic stability especially around the GDP.

3)

If there is economic growth then there is the capacity for businesses to have a greater economic return. As a result companies are going to have more money to invest into expanding their companies and therefore as a result hire more people. Lets give the example of a company X who are bank. Lets say they suddenly have a huge revenue