The Australian economy has been growing on average at about 3% per year (in real terms) for the past 20+ years (about 4% from 1993-2008 and 2.5% since). Can you think of some reasons why we should still be concerned about short-run fluctuations in economic growth? (hint: use your answers to questions 1 and 2 to realise what is happening in the economy during those fluctuations) ?
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