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Analysis of macroeconomics performance of Australia and USA

   

Added on  2019-11-29

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Analysis of macroeconomics performance of Australia and USA 1Analysis macroeconomic performance of Australia and USAByCourse:Professor’s name:Institution:Date:

Analysis of macroeconomics performance of Australia and USA 2ABSTRACTThe United States and Australia have been engaging in trade with the United States of America is one of Australia’s major trading partners. It is also the major global international investor in Australia. In 2005 1st January, the United States of America and Australia legalised a free-trade agreement (AUSFTA). Due to this agreement, the non-agricultural exports to the US other than textiles and clothing were rendered duty free if they met product specification regulations of origin. Also, 99% of the US manufacturing exports to Australia also become duty free and were subject to the root rule requirements. The non agricultural products were rendered duty free since2015. This agreement also included tariff liberalization in which the US seemed to have benefited more than the Australian economy. In this research, we try to ascertain the belief by financial analysts the changes in the United states GDP will have an impact on the economy of Australia.

Analysis of macroeconomics performance of Australia and USA 3Table of ContentsINTRODUCTION4RESEARCH QUESTIONS4DISCUSSION4 ECONOMY OF UNITED STATES5 ECONOMY OF AUSTRALIA6 RELATIONSHIP BETWEEN THE UNITED STATES AND AUSTRALIA ECONOMY7FINDINGS.....................................................................................................................................................................9 TABLES ANDGRAPHS..............................................................................................................................10CONCLUSION........................................................................................................................................................13REFERENCES...........................................................................................................................................................14

Analysis of macroeconomics performance of Australia and USA 4INTRODUCTIONA relationship between Australia and the United States is evident in various sectors: defence and national security, science and technological research, the creative industries, and – the centre of this report – economic relations. Economic historians classify Australia as resource-rich, but capital-wisely poor. Australia's technologically advancement, prosperous, is the legacy of generations of individuals, households, enterprises, and government. Insufficiently understood by many Australians is the American contribution to these nation-building investments (Leamer and Storper 2014, pp. 63-93). The U.S.-Australia Free Trade Agreement increased the U.S. exports to Australia by over 100% since its inception in 2005. The total US trade relations with Australia were about $65 billion in 2015 with a trade surplus for the US of about $29 Billion. The US exports have been able to create employment for around 250000 people especially in the manufacturing, travel and tourism, industrial supplies, consumer goods as well as financial services. On the other hand, the Australian exports have been able to support the foods, feed ad beverages, industrial supplies, business and travel services (Thurbon 2015, pp.463-467).RESEARCH QUESTIONSThe following are the proposed research questions for this research report;Economic trends and changes in the economies of both Australia and United StatesExpansions and recessions faced by both economiesImpact of growth in GDP of one of the economies on the other economyWhat are the trade relations between Australia and United States DISCUSSIONIn this research, we support and agree with the idea that economic changes in the United Stateswill affect the Australian economy. It is evident because the Australian economy is relativelysmaller as compared to the United States and we believe that the American GDP changes willaffect the GDP of Australia. Financial conditions and investor confidence are factors thatinfluence economic decisions globally. For instance, the small interest rate movements are ableto shift significant amounts of capital which may affect the value of currencies present in theworld. Research shows that both countries have experienced economic recessions almost thesame period. This goes to state that economic changes in the United States which are a largerscale economy affect the Australian economy. Australia’s relationship with the United States iswell developed and has remained so for a long time.

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