Premium Essay

How External Forces Effect the Australian Economy

In: Business and Management

Submitted By nata1221
Words 638
Pages 3
How external forces effect the Australian economy

Real Gross Domestic Product is a measure of GDP. RGDP is an inflation-adjusted measure that reflects the final market value of all goods and services produced at the end of any given year, regardless to any change in price or purchasing power. The inflation rate is a measure of inflation and is the percentage increase in the price of goods and services expressed on a yearly basis. The inflation rate can be measured by observing the consumer price index and the GDP Price Deflator. The unemployment rate is a measure of unemployment. The unemployment rate is a percentage of the total workforce who is currently unemployed. Low rates are seen as inflationary because of the upward pressure on incomes, and high rates lead to a decrease in consumer spending. | |2003 |2004 |2005 |2006 |2007 |
|RGDP Growth |3.4% |3.2% |3.2% |2.5% |4.4% |
|Inflation Rate |2.4% |2.6% |2.8% |3.3% |3.0% |
|Unemployment Rate |6.3% |6.0% |5.1% |5.1% |4.9% |

[pic] (RGDP Growth & Inflation Rate) (Unemployment Rate)
The business cycle is the fluctuations in the economic growth over a long period of time. The business cycle can rather irregular and does not tend to follow any given particular pattern. There are four main stages that occur during the business cycle; an expansion, where growth is above average, a peak, the highest point of the growth, a contraction, where growth is below average and a trough, the lowest point of growth. RGDP growth is one the main indicators of the strength of the economy. If RGDP is increasing then the economy is said to be experiencing an expansion, but if RGDP is falling then the economy is said to be in a recession and experiencing a contraction. During an expansion the unemployment rate falls and…...

Similar Documents

Free Essay

What Are the Main Changes Occuring in the Australian Labour Market? What Are the Main Causes of These Trands? What Effect Are These Changes Having on the Nature of Employment in the Australian Economy?

...INTRODUCTION This paper focuses on 3 current trends occurring in the Australian labour market, analysing their causes and effects. The chosen trends are structural unemployment, gender pay gap and skill shortage. The main causes of the first trend are increase demand for services and technological change, which have led us into a new era where highly skilled labour force is needed to operate more complex machineries and computer systems. The rapid technological change has caused structural unemployment, with workers willing to work but cannot because of their lack of required skills. The second trend, gender pay gap, illustrates how wide the pay gap between males and females is until today. The main causes of this current direction are the persisting stereotype of the male brad-winner, the feminisation of some particular industry and more importantly non-union collective agreement. The results of this general direction limit the potentials of the Australian national income and create a culture of discrimination. The third and last trend, skill shortage, is generated by cut in investment in skill development, difficulties in retaining the employees and variation of demand for labour. These phenomenons foster inefficiency and impossibility to produce at full employment of resources. TREND 1: STRUCTURAL UNEMPLOYMENT One of the major trends that can be noticed in the Australian labour market is the steady presence of structural unemployment. Most of the......

Words: 2540 - Pages: 11

Premium Essay

Effects of the Economy on Divorce Rates

...| The Effects of the Economy on Divorce Rates | | | = | I. Introduction Divorce has become quite common over the last few decades in the United States, as well as in other industrialized countries. It is often discussed as a social problem or phenomenon, with its causes usually related to cultural and structural changes such as increased female labor force participation and legislation which makes divorce easier to obtain. Furthermore, divorce today has become more socially accepted, as individuality has become the dominant value in our capitalist society. Despite the social acceptance of divorce, I think most would agree with me in stating that divorce is not desirable, as it causes emotional, physical and financial strains not only on those directly involved, but on their children and extended families as well. In this paper, I investigate the relationship between divorce and economic cycles in the United States from 1950 to 2000. My intention is to discover whether and how divorce rates change in periods of economic recession, as compared to periods of economic growth. It is important to look into further trends in divorce rates, as its increase over time may not simply be an issue of social and cultural changes, but rather another one of the effects of the economy on the family unit in the United States. My hypothesis is that divorce rates will decrease in periods of economic growth, as a husband's increased income has been identified to have a......

Words: 2536 - Pages: 11

Premium Essay

Purchasing Australian Made Goods and Its Effect on Our Economy

...Purchasing Australian Made Goods and its Effect on Our Economy ABSTRACT The purpose of this essay is to analyse the effects of purchasing Australian made goods on the Australian economy in relation to determining the degree to which it is advantageous. The research concludes that in fact it is far more beneficial for consumers to purchase goods unbiasedly. The economic theory of a comparative advantage denotes that a country should aim to specialise its production as to channel resources efficiently and achieve economies of scale nationally. The increasing trend in globalisation has meant an increase in the availability of goods and services increasing our Gross Domestic Product (GDP) through benefiting from increased trade and maxamising on the benefits of fluctuations in the international business cycle. The gains from free trade agreements such as advances in technology and capital equipment have effectively made Australian production far more efficient. In combination, they provide a sufficient argument to conclude that purchasing goods unbiasedly is far healthier for the economy than strictly purchasing Australian made goods. Key Words: Globalisation, Comparative Advantage, Free Trade, Economies of Scale, Economic Growth, Production Introduction As more countries move toward a market capitalist model, a broader range of substitute goods become available, and this increase in choice between substitute goods proves a time consuming issue for the average......

Words: 1679 - Pages: 7

Premium Essay

Australian Economy

...recession, Australia maintained strong economic growth, low government debt and a triple-A credit rating. With this record, you might expect the federal election to be focused on how to convert the strength of today's economy into resilience for the future. But instead the political spotlight has fallen on the perceived problem of government debt, with alarming proposals to bring austerity ''down under''. For an American, Australia's anxiety about deficit and debt is a little amusing. Australia's budget deficit is less than half that of the US and its net debt is less than an eighth of the country's gross domestic product. Most countries would envy Australia's economy. During the global recession, Kevin Rudd's government implemented one of the strongest Keynesian stimulus packages in the world. That package was delivered early, with cash grants that could be spent quickly followed by longer-term investments that buoyed confidence and activity over time. In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost. Advertisement In Australia the stimulus helped avoid a recession and saved up to 200,000 jobs. And new research shows that stimulus may have also actually reduced government debt over time. Evidence from the crisis suggests that, when the economy is weak, the long-run tax revenue benefits of keeping businesses afloat and people in work can be greater than the short-run expenditure on stimulus measures. That......

Words: 765 - Pages: 4

Premium Essay

Australian Economy

...commodity and asset price inflation (a constraint on economic growth), emerging protectionism and currency imbalances (resulting in lower exports and higher imports). Inflation The media article in essence describes factors that affect inflation. The RBA is predicted to not raise cash rates from 4.75% until May, which help determine the interest rate, a tool helping to dampen demand and thus lower demand-pull inflation. Cash rates were kept on hold as he underlying rate of inflation was around 2.25% which is between the RBA’s target of 2-3% and the recent natural disasters has harmed output (increased interest rates will soften growth so it is not needed when there is low inflation). Also, the “large exchange rate appreciation” of the Australian dollar at the end of 2010 will hold inflation as imported inflation is decreased due to foreign goods and services becoming cheaper. Consumers are being cautious with spending and as a result this will lowers demand-pull inflation only in the short-term, however in the long term this will not persist. Without the floods the RBA may raise the cash rate sooner than May, a dominant factor being the unemployment rate falling to 5% in January which close to the non-accelerating inflation rate of unemployment (NAIRU) where a movement pass this situation of full employment will trigger inflation due to higher wage demands a cause of more specifically cost-push inflation. Strong domestic economic growth of Australia during the global......

Words: 1563 - Pages: 7

Premium Essay

The Australian Federal System’s Effect on Australian Businesses

...The Australian Federal System’s effect on Australian businesses It is widely thought that the role of the government is to guide their economy into a steady growth and provide support for their local industries and businesses. However there is a growing dispute with that statement with recent media coverage of large iconic Australian companies such as Qantas and Holden in dire economic situations. This paper will argue that the role of the Australian government is to stimulate the national economy and to help Australian businesses. However these aides must be beneficial to both the government and the business. If the assistance is non-sustainable, then the government is not obliged to try and alter the inevitable. In order to support this argument, this paper will provide an understanding of Australia’s social structure and analyse the companies listed above In order to understand the role of the Australian government on businesses is to understand how Australia was built. The doctrine of separation of power was inherited with the birth of the Federation of Australia in 1901. The doctrine split the institutions of government into three branches; legislative, executive and judicial. This is a way to prevent a corruption, internal abuse of power and conflict of interest of people in high positions of the government. Although there are numerous interpretations of ‘Capitalism in Australia’, Lloyd (2008, p.30) states that “From 1992 Australia has experienced a period of......

Words: 1080 - Pages: 5

Premium Essay

Effect of External Debts on Economic Growth

...Södertörns högskola | Department of economics Magisteruppsats 30 hp | Vårterminen 2013 The Effect of External Debt On Economic growth – A panel data analysis on the relationship between external debt and economic growth. Av: Dereje Abera Ejigayehu Handledare: Joakim persson Handledare: [Handledarens namn (teckenstorlek: 12p)] Abstract The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980’s. This thesis examines whether external debt affects the economic growth of selected heavily indebted poor African countries through the debt overhang and debt crowding out effect. This is carried out by using data for eight heavily indebted poor African countries between 1991 to 2010.The result from estimation shows that external debt affects economic growth by the debt crowding out effect rather than debt overhang. Moreover, in an attempt to mark out debt servicing history, the thesis found the selected countries are not paying (servicing) more than 95% of their accumulated debt. Key Words: External Debt, Debt overhang, Debt crowding out, debt servicing and Table of Contents CHAPTER ONE .....................................................................................................................................1 INTRODUCTION ..................................................................................................................................1 1.1 Background of the study.............

Words: 12805 - Pages: 52

Free Essay

Internal and External Forces in Business ultimately the primary way for a chef to become a celebrity, some have achieved this through success in the kitchen and achieving such awards as Michelin stars while others are home cooks. Celebrity chefs can also massively influence cuisines across countries, with foreign cuisines being introduced in their natural forms for the first time due to the work of the chef to inform their viewers. Sales of certain foodstuffs can also be enhanced, such as when Delia Smith caused the sale of white eggs_ "Delia factor; Forget about sophisticated marketing strategies . . what you need to sell more is the:. - Free Online Library," Nov 19, 1998) _across the UK to increase by 10% in what has since been termed the "Delia effect". Endorsements are also to be expected from a celebrity chef, such as Ken Hom's range of bestselling woks in Europe, but can also lead to criticism over which endorsements are chosen such as when Marco Pierre White teamed up with Bernard Matthews Farms, or when Darren Simpson advised and endorsed fast food restaurant KFC. History The earliest chef to be credited with being a celebrity was the 16th-century Italian, Bartolomeo Scappi.[2] He was the personal chef to Pope Pius V, and is credited with writing one of the first modern recipe books, Opera.[2] The 19th-century French chef Marie-Antoine Carême has also since been referred to as a celebrity of his era, due to the complexity......

Words: 828 - Pages: 4

Premium Essay

Australian Economy Analysis

...Analysis of the Economy Export, Import and Production In recent years, Australia has been a net exporter of goods and net importers of services (See appendix 1). The country, rich in natural resources, is a major exporter of commodities. Iron-ore and gold account for 28% of total commodities exports (81 Billion US$ in 2013). Coal represent 18% or 38 Billion US$ and oil and gas for 9 percent. Manufactured goods constitute 33 percent of the total exports with food and metal products and machinery and equipment accounting. Agricultural products, particularly wheat and wool make up 5 percent of trade outflows Australia is a major importer of machinery and transport equipment, computers and office machines and telecommunication. Main import partners are China (15 percent of total imports), United States (13 percent of total imports), Japan (8 percent of total imports) and Singapore (7 percent of total imports). Trading Partners Trade with the Asia-Pacific region has become increasingly important for Australia. Of Australia's top sixteen major trading partners (representing around 80 per cent of merchandise exports); countries from the Asia-Pacific region are the destination for around 89 per cent of this trade. China is the most important trade partner of Australia, the country export Iron ore and gold as well as oil and many raw materials. China is also Australia’s largest source of imports. Major imports from China are mostly finished goods that include clothing,......

Words: 934 - Pages: 4

Premium Essay

The Effect of Globalisation on the Nigerian Economy

...On OKECHUKWU DIYOKE DIOKC81 | 1 INTRODUCTION An economy refers to the full network of distributers, producers and consumers of goods and services within local, regional or national communities. Globalization refers to the process of the increase in economic, political, social and ethnic relations across international boundaries. Globalization is aimed primarily at the constant theories that shape the political and socioeconomic development of nations across the globe. It looks at the continued increase in the collapse of trade barriers and increased world trade and integration; globalization can be seen as an extension that regularly restructures the way nations interact amongst themselves by breaking down their individual barriers in areas of culture, commerce, finance, communication, and several other fields of struggle. This on-going change can be seen from its thrust of legitimate governance, liberal democracy, gender equality, environmental stability, and free market economy among other aggregate values for people of the member states. Globalization creates a compelling inclination for the systematic development in the modern world today as a result of the problems it poses to the states in the form of challenges. This essay looks at the definition of globalisation, the concept of the process of globalization, and how it affects the Nigerian economy. OKECHUKWU DIYOKE DIOKC81 | 22/08/11 2 THE CONCEPT OF GLOBALISATION Many theories have been put forward...

Words: 3758 - Pages: 16

Free Essay

Overall Productivity of the Australian Economy

...Running Head: OVERALL PRODUCTIVITY OF THE ECONOMY Overall Productivity of the Australian Economy By Student’s Name Code+ course name Professor’s name University name City, State Date Introduction The best definition of productivity under the Australian and other contexts is, “the efficiency with which an economy employs resources to produce economic output” (D’arcy and Gustafsson, 2012, p. 23). It will remain that the most complete measure of productivity is the TFP (Total Factor Productivity), which accounts for all inputs involved in production. Normally, “the inputs are classified into capital (K), labour (L), energy (E), materials (M) and services (S)” (O'Mahony and Timmer, 2009, p. 538); the lead letters of each input are why this is called the KLEMS approach. Principally, the measures of inputs and outputs can be incorporated adjustments for quality change. Nonetheless, KLEMS approach is arduous in terms of data and that is the reason why very few countries in the world utilize this approach (Hannula, 2012). The MFP (multifactor productivity) approaches are easily implementable. The MFP approach accounts for merely two inputs, namely labour and capital. Presently, the most comprehensive measure of productivity available in Australia is MFP. Principally, labour input in the MFP ought to be adjusted for enhancements in the human capital (the quality of labour), yet as earlier hinted, this is not done in Australia at present,......

Words: 2350 - Pages: 10

Premium Essay

Effect of Privatization in Nigeria Economy

...people involved in the business 1.6 PURPOSE OF THE STUDY The purpose of this study is aimed at determining how prevalent the issue of finding is, in setting back a hindering the development of small and medium scale enterprises and also to find a solution to the menace so that small and medium scale enterprises may grow to maximize their full potentials 1.7 SIGNIFICANCE OF THE STUDY This study will make a great impact in the business world, especially in small and medium scale enterprises because the recommendation that made is highly of great benefit to their development. The study will also help in knowing the extent to which lack of funding can cripple a business and how to harness every opportunity that may come to way of the business in terms of finance. 1.8 SCOPE OF THE STUDY The small and medium scale enterprises in Ogun senatorial district are the target of this study, most especially those in Ogun east senatorial district. The population of this research is 100(hundred) out of which 90 (ninety) business is made the sample size. This study was limited to the small medium scale business in Ogun east senatorial district CHAPTER TWO 2.0 LITERATURE REVIEW 1. CONCEPTUAL FRAMEWORK Small and medium scale enterprises in most developed and economics of which Nigeria is one are the main life wire of the economy. Small scale enterprises have helped in the transformation of many countries South East Asia such as India,......

Words: 9803 - Pages: 40

Premium Essay

How Does an Increase in Life Expectancy Effect the Economy

...population are; firstly, less people will be paying NI tax but there will be an increase of people taking from the pot via pensions therefore the government will have to take money from other areas in order to pay the pensions to the elderly causing other areas to lose out on development e.g. Transport etc, therefore there may be ‘pensioner poverty’ which will be a huge problem for those who haven’t saved. Secondly, the more elderly people are the more care they need therefore the government will have to provide care for these people which is an added cost to the economy which can also affect other areas. The cost of running the NHS will increase with an ageing population as elder people need more care and inoculations will be needed for things such as flu in winter etc. in order to deal with the levels of illness. Also, elderly people tend to spend less than younger families but some may argue that they stimulate the UK economy as they spend their holidays visiting coastal towns throughout the UK e.g. Blackpool whereas younger generations are likely to visit more exotic places e.g. Maldives. The political problems that an ageing population causes are that the more elderly people are the less likely they will be to vote in the general elections therefore there will be many wasted votes. Also, there will be a less of a chance for the smaller parties to gain power as many of the people will be set in their ways and always vote for the party in which they have always voted......

Words: 596 - Pages: 3

Premium Essay

Internal and External Forces

...Internal and External Forces Internal and External Forces I have always wanted to own a bridal shop. A strong strategic plan and attainable goals can make my business a strong decision. Jennifer’s One Stop Bridal Shop is a business that will help bride’s and groom’s dreams come true. Jennifer’s One Stop Bridal Shop would work hard to provide any requests that may come up to create the perfect wedding experience. Jennifer’s One Stop Bridal Shop will be the leader in wedding dream making. Jennifer’s One Stop Bridal Shop is no ordinary bridal shop. The shop can do anything from the invitations to the cake to the dress and anything in between. It is my hope to make every wedding that comes through the door a unique and memorable experience. Jennifer’s One Stop Bridal Shop would offer to plan and create the wedding or can be separated into what the customer needs. If the customer is only looking for a cake, the shop will make sure it is the best cake they have ever seen. Jennifer’s One Stop Bridal Shop will be in many different markets with many different customers. Different markets mean different economic factors that need to be considered. Each market has different competitors and the economy will have different effects on the markets. The economy trend could have a great effect on one market and a negative effect on another; it just depends on what part is affected. My shop will also have to watch legal and regulatory trend and forces. Legal and......

Words: 1405 - Pages: 6

Free Essay

Internal and External Force

...Recommendations for Changes in the Nature of the Workforce “As the economy becomes increasingly global, our workforce becomes increasingly diverse” (Greenberg, 2009, pg. 1). Diversity is an internal force of change within almost every organization (Robbins & Judge, 2011). It includes categories like ethnicity, gender, age, and others. Businesses experience outsourcing and demographic changes as the world becomes more connected. The aging population means a higher percentage of older workers. Organizational development techniques help ease the transition of the changing nature of the workforce. Diversity training is an organizational development technique focusing on values like respecting people, power equalization, confronting problems, and participation in decision-making (Robbins & Judge, 2011). A behavioral specialist creates an open environment in which people learn about each other through expressing ideas and observation. This change method is appropriate for enhancing interaction in a culturally diverse group. A second organizational development technique that improves employee well-being and effectiveness is team building (Robbins & Judge, 2011). This exercise focuses on values like building trust and role clarification. Team members participate in highly interactive group efforts, helping them learn how to accomplish goals, coordinate with each other, and build relationships in a diverse setting. Survey feedback is a change approach in which employees fill......

Words: 690 - Pages: 3