logo

Economics Assignment on USA Economy and Australian Economy

   

Added on  2020-04-07

15 Pages3565 Words31 Views
Running head: ECONOMIC ASSIGNMENTEconomic AssignmentName of the StudentName of the UniversityAuthor note

1ECONOMIC ASSIGNMENT Executive SummaryThe report attempts to make a critical evaluation of the relative impact of USA economy on theeconomy of Australia. Both USA and Australia are listed in among the developed nations of theworld. They are good trade and investment partners as well. For this, policymakers often are ofbelief that fluctuation in real GDP of USA affects economic scenario of Australia. To validatethe statement movement of real GDP for a considerable long period (1975-2016) is analyzed.Related to GDP, FDI flows and net export t6rend is also reviewed. No common fluctuation pointis found between volatility of Australian dollar with respect to US dollar and the correspondingfluctuation in interest rates. There is not much significant impact of Great recession of USA onAustralian economy indicating an ambiguous relationship between the two nations.

2ECONOMIC ASSIGNMENT Table of ContentsIntroduction......................................................................................................................................3Australia and USA; nature and extent of international relation......................................................3Critical Evaluation...........................................................................................................................4Real GDP of USA and Australia.................................................................................................5Net export and Trade balance......................................................................................................6Exchange rate movement.............................................................................................................8Evaluation of Investment Dynamics............................................................................................8Conclusion.....................................................................................................................................12References......................................................................................................................................13

3ECONOMIC ASSIGNMENT IntroductionIn today’s integrated world, international relationship becomes an important aspect forany economy. International relationship is defined not only in terms of trade relation but also itincludes any unilateral transfer payment or assistance, investment made in foreign country or anycapital payment between nations. Global integration initially starts with bilateral or multilateraltrade relation. Country’s export goods those are advantageous for them to produce and importgoods for which it faces a higher relative cost of production. The net earnings from trade are oneof the vital components of gross domestic product of nations. The interconnection among nationsimplies any shocks in one nation have a likely impact on the other nation as well. The paper examines the extent of international relationship between USA and Australia.Both the countries shared a good international relationship in their bilateral trade and foreigninvestment as well. Viewing this, some commentators draw assertion that fluctuation in realGDP in USA can be claimed responsible for economic expansion or contraction in Australia.The main rational for this assertion is that USA has a considerable large size of economy ascompared to Australia. The paper examines whether this assertion is correct or not. Australia and USA; nature and extent of international relation Cross-border transaction of goods and services explains the extent of global trade. Whendifferent nations interact on international platform then some nations gain more because of theirdominating economic power while weak nations accept the terms of trade determined by thelarge nation. Whatever be the case, trades are generally mutually beneficial. Australia and USAsigned Free Trade Agreement that comes into effect from 2005. Australia provides a largemarket for USA exported goods. In 2015, the goods and services traded from USA to Australiais was totaled to approximately $65 billion with a trade surplus for USA amounted to $29billion(Beeson and Zeng 2016.). Depending on exported goods to Australia 250,000 jobs aresupported in USA. The major sectors in USA those are flourishing with USA export relation areindustrial goods, financial service and different consumer goods. Australia exports industrialmaterial and supplies, foods and beverages items and travel and business services. Apart from trade, there are bilateral investment relation between USA and Australia.Invested fund amounts to more than $ 1 trillion. Among the investment that Australia madeabroad, the highest amount recorded in USA. Australian investment in USA is amounted to $440billion, 30 percent of total investment made abroad. USA invests $650 billion in differentAustralia ventures. Most lucrative sectors for USA investment are insurance, finance and mining.In Australian stock market more than 30 percent share belong to USA (Jennings 2013).Therefore, a good relation between Australia and USA exits in terms of their visible and invisibletrade and investment. Other than trade and investment, other economic benefits are shared between the twonations. Australia ranked 12 in the list of developed nations. It maintains a steady economicgrowth for a long period. In terms of per capita income, Australia is sixth. Because of a favorablebusiness environment, US firms continued their business operation in Australia for more than

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
The Dynamics of Relationship Between Australia and USA
|13
|3483
|34

Australian economy and its relation with USA
|11
|3532
|157

The Direction of Relation and Power of Nations
|20
|3608
|40

Macroeconomics Performance of Australia
|14
|4190
|34

Economics Development - Solved Assignment
|14
|3546
|38

Economics Development - Assignment
|17
|4117
|70