In accordance with 'Australia in the Global Economy', economic growth is defined as a sustained increase in a country's productive capacity over time. This is commonly measured by the percentage increase in real gross domestic product (GDP). Economic growth is measured using a particular equation: Real GDP (current year) - Real GDP (previous year) x 100 Real GDP (previous year) 1 Economic Growth = Until the GFC, Australia had maintained a relatively stable level of economic growth oscillating around 3.5. %. Although its growth is not significant, Australia is one of the few economies (along with China) to have gone through a period of constant growth, with growth of between 2 and 5% between 1994 and 2007. This level high steady growth has been largely affected by rising commodity prices, which has had a huge impact on Australian exports, as Australia is primarily an exporter of mining materials, including coal, iron ore and 'gold. The global financial crisis hit the Australian economy at one point. less intense than in the rest of the world, largely due to government policy aimed at reducing the impact. Economic growth during the GFC collapsed, with GDP growth falling from 3.7% in 2007/8 to 1% in 2008/2009. This slowdown in economic growth was linked to rising unemployment rates, which will be discussed later in the report. The global financial crisis forced the government to use the entire surplus and more of that accumulated during the Howard years (which was recorded at $21 billion at the end of the 2007/8 financial year and -30 billion dollars at the end of the 2008/9 financial year); however, this use of funds has been very effective. Although many are skeptical about how the government spent its stimulus package (first injection...... middle of document...... at that time Australia had a low unemployment rate by 4.3% Australia's unemployment rate increased to 5.6% at the end of 2009, with prospects for higher unemployment rates. This required expansionary economic policies to increase aggregate demand levels and increase. GDP growth There are a number of causes for unemployment in the economy Level of economic growth • Position of macroeconomic policies • Constraints on economic growth • Rising participation rates • Structural change • Technological change • Productivity • Levels. inadequate training and investment • Rapidly increasing labor costs and • Labor market inflexibility Works Cited Australian Bureau of Statistics http://www.abs.gov.au/ausstats/[email protected]/mf/6202.0http://www.smh.com.au/opinion/politics/rudd-should-cash-in-on-the-economy-20100327-r3yr.html