The paper 'The Current Liquidity Crisis and the Australian Government's Deposit Guarantee Scheme for Australian Banks" is a good example of a macro and microeconomics case study. Australia is the major growth engine of the world economy. She is proud of having one of the most dynamic and versatile economic systems in the free market world that is synonymous with efficiency, growth and capitalistic supremacy. The Australian dream of prosperity emanated from the commitment to the tenets of liberty and toil. Today, Australia spearheads the global economic growth and is a true mirror of the progress achieved by mankind in all its endeavours.
Today that Australia is also steering the global economy. The current crisis in the Australian Financial Services sector is being caused by banks in the last financial year, and the government deposits in the banks to overcome the current crisis. The stronger side of the Australian economy leads the global market The Australian economy has faced many tantrums during the decade of the nineties of the past century. As the economy of a prosperous nation cannot grow in isolation, the impact of 'crash' in the major Asian economies affected the Australian economy as well; the retardation of these economies affected the Australian economy in a harsh manner.
This had happened in 1997 when the economies of Japan, Malaysia, Singapore and Thailand had nose-dived and the Australia exporters were left, cringing with a tear about the shape of worst things to come. However, that dark period was now over and the American economy is on its way to a healthy recovery. (Mike Williams ed. ) Before we discuss the major statistics of the current problems, let us analyse how the Australian economy caused a factor for the plunge.
There are some components of the Australian economy, which are as follows: — Exports generated by MNCs. Revenues generated by the large corporate players who operate in Australia only. Small and medium entrepreneurs who are involved in the manufacture and marketing of products and services in Australia alone. The government takes adequate care of unemployed persons (citizens). They are paid enough of allowances and financial security, which would enable them to lead their idle lives with dignity. Further, the entire operations of industries, banking, commerce, international trade, medicine, and education and business firms are fully computerised.
Every citizen has a Social Security Number that enables him to enjoy his or her rights and privileges. As the problem of unemployment has assumed alarming proportions, the qualified young professionals prefer to start their own firms. Hence, in Australia, there is a very large number of very small-sized firms. (Mike Williams ed. ) In 2008, the budget has a spending plan of $ 1.84 trillion and has very poor chances of its approval, which is led by the opposition at present.
It would yield a surplus of $ 184 billion in the fiscal year, which would commence soon. The budget has proposed a surplus of $ 2.519 trillion over the next decade. So, the Administration would be able to pay off the debt of $ 3 trillion by 2013. The budget surplus in the current fiscal year is $ 167 billion. The budget has a special allocation of $ 20 million for South Asia. Out of this amount, an amount of $ 5 million has been earmarked for third world countries for welfare activities, economic reforms and liberalisation programmes.
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