The paper 'Unemployment, the Cause and a Remedy' is a perfect example of a Macro and Microeconomics Assignment. In 2009, it is evident that Australia was facing an Economic Downturn. The unemployment rate stood at 4.6% and the rate of inflation was at the highest in seven years, standing at 4.0%. The GDP also was at -0.9 having dropped from 0.8% in 2008. This was the lowest GDP experience in a period of over 10 years. By July 2009, 9.7% of the employed women were underemployed and 6.4% of employed men were underemployed. The United States recorded the highest unemployment rate of 10% in 2010.
The rate was 8.0% in 2009 that had risen from 5.0% in 2008. This has been a cause of an economic downturn in the country. The GDP growth rate was also at its lowest during the same year averaging at -6.8%. The financial system of the United States experienced almost a complete meltdown in the financial year 2008/2009. The meltdown was caused by the great-accumulated debt by the US government, state governments as well as the consumers’ debt.
This has been the cause of GED in the US being experienced in the US to date (Boyes & Melvin, 2010, p. 97). The economic downturn in Australia has tested the resilience of the country’ s economy. The local governments are affected by the likely decline in income and the emerging service demand. The downturns are the catalyst for structural change. The long period for economic growth in Australia has buffered the industries against economic shocks. In recent years, the United States has had the lowest interest rate standing at 0.2%.
The low-interest rates have led to the emergence of a new class of borrows. These borrowers are encouraged by the mortgage brokers to buy homes and as a result, a large amount of capital has been taken to the mortgage market. This capital is given to people who have weak credit histories and he has increased the debt deficit in the US. This has also been a cause of the Global Economic Downfall (Krugman & Wells, 2010, p. 88). The European countries have also experienced the Global Economic Downturn in recent years. This is evident from the data collected in that the levels of unemployment shoot up to 9.8% in the year 2010.
The rate has increased drastically from 2007 to 2010, shooting from 7.4% in 2007 to 8.8 in 2008 and recording the highest in 2010. The rate of growth of GDP has also been quite low in the mentioned years standing at negative growth.
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