Essays on Current Economic Issues Facing Australia Assignment

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The paper “ Current Economic Issues Facing Australia” is a thoughtful example of the assignment on macro & microeconomics. Macroeconomics is a branch in economic studies that deals with how human beings behave while making decisions concerning their households using limited resources. This study involves the supply and demand of goods and services found in an economy (Fenna 2010, pp. 362 ). The major determinant of how the supply or demand will depend on the prices offered by suppliers in rendering their goods and services which in return makes the consumer decide on which quantity to consume.

Macroeconomics involves issues such as growth, unemployment, and inflation which affects any policy made by the government. The current state of the Australian economy can be said to have improved slightly and is growing remarkably fast since they started trading with the Asian Pacific regions making it is Gross Domestic Product(GDP) increase, the inflation rate decrease, and more exports and imports in the country. This improvement in the economy has been attributed to China being its greatest exporter of commodities, and in turn, it makes Australia be its largest source of imports. In terms of growth rate, Australia in 2007-2008 grew with 3.7 % as its unemployment rate dropped by 4.0%.

There was an increased drop in 2009-2010 by 2 % but the economy recovered by 2011-2012 which saw full employment output in the economy (Brittle 2010, pp. 255). The Inflation rate in Australia has experienced a drop in the first quarter in 2012 having the consumer price index (CPI) rose to 0.5% which was attributed to an increase in the prices of goods and services. Average interest rates in Australia have remained to be 3.5% considering the growth that is in the early months of 2012 (Yoshikawa 2012, pp.

430). This is due to an increase in capital resources that have seen growth in the consumption level. Gross Domestic Product in Australia has reported a gradual improvement over the years which has been possible due to the adjusted purchasing power of consumers and an increase in population. Aggregate exports for the year 2012 amounted to 25757 million in July which was attributed to the country having a rich base of natural resources in the agricultural and mining sector.

References

Brittle, S 2010, 'Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia', Australian Economic Review, 43, 3, pp. 254-269.

Buncic, D, & Melecky, M 2008, 'An Estimated New Keynesian Policy Model for Australia', Economic Record, 84, 264, pp. 1-16.

De Brouwer, G, & Gilbert, J 2005, 'Monetary Policy Reaction Functions in Australia', Economic Record, 81, 253, pp. 124-134.

De Garis, D 2009, 'Australian Macroeconomic Policy: Bold Monetary and Fiscal Policy for Risky Times', Ecodate, 23, 3, p. 2.

Fenna, A 2010, 'The Return of Keynesianism in Australia: The Rudd Government and the Lessons of Recessions Past', Australian Journal of Political Science, 45, 3, pp. 353-369.

LEAHY, J 2011, 'A Survey of New Keynesian Theories of Aggregate Supply and Their Relation to Industrial Organization', Journal of Money, Credit & Banking (Wiley-Blackwell), 43, pp. 87-110.

Makin, A, & Narayan, P 2011, 'How Potent is Fiscal Policy in Australia?’ Economic Papers, 30, 3, pp. 377-385.

Milani, F 2011, 'The impact of foreign stock markets on macroeconomic dynamics in open economies: A structural estimation, Journal of International Money & Finance, 30, 1, pp. 111-129.

Tily, G & Keynes, J 2010, Keynes Betrayed: The General Theory, The Rate Of Interest And 'Keynesian' Economics / Geoff Tily, n.p.: Basingstoke, Hants. : Palgrave Macmillan.

Yoshikawa, H 2012, 'A New Micro-Foundation for Keynesian Economics', Journal of Economic Issues (M.E. Sharpe Inc.), 46, 2, pp. 429-438.

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