BUS700 Economics Paired Assignment

Added on - 30 Oct 2019

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Running head: ECONOMICS ASSIGNMENTEconomics AssignmentName of the StudentName of the UniversityAuthor Note
1ECONOMICS ASSIGNMENTTable of ContentsIntroduction:...............................................................................................................................................2Economic Relationship between the USA and Australia:.............................................................................2The ongoing debate regarding dependence dynamics:...............................................................................3Critical Evaluation:.......................................................................................................................................4Counter-Observation:................................................................................................................................12Conclusion:................................................................................................................................................14References.................................................................................................................................................15
2ECONOMICS ASSIGNMENTIntroduction:The global economy has experienced considerable changes in its dynamics with time and adventof newer economic dimensions and players in the international scenario. With globalization,technological innovations, increase in the worldwide mobility of goods and services as well as factors ofproduction and dissemination of knowledge and innovations across the globe, the trade relationsbetween the countries have also undergone significant changes. In the earlier times, the term trade onlyreferred to the exchange of goods and services produced between two countries or regions participatingin the trade. However, with the business and political relations between the countries becoming moreinclusive and open in nature, following the globalization and opening of new avenues to facilitate tradeand communications, almost all the countries in the world are now getting connected to one another ina more cumulative way (Buiter and Rahbari 2012). In the recent and more complex global economicscenario, the economic and trade policies of a country not only affect the economy of the concernedcountry itself, but also the effects the economies of the countries with which it has trade and othereconomic relations. The report tries to look into this aspect of interdependence of global economies inthe recent times. More specifically, the report tries to analyze the effects of the changes of the policystructures and GDP statistics of the economy of the United States of America on the economicconditions of one of their primary trading partners, Australia. To study the same the report takes astandard time span between 1985 to 2015-2016 and compares the performances of both the countrieswith respect to different economic variables to get a picture of the dependence (if any) of the economyof Australia on the dynamics of the economy of the USA (Auerbach and Gorodnichenko 2012) .
3ECONOMICS ASSIGNMENTEconomic Relationship between the USA and Australia:The recent global economic scenario has several predominant players, whose method ofoperations and dynamics in the monetary and fiscal policy frameworks, significantly affect the dynamicsin the international economic scenario. Two of those dominant players, having immense significance inthe international economy are the economies of the United States of America and that of Australia.These two economies, again, have significant political and socio-economic connections with one anotherand the relationship between these two countries, especially trading and overall economic relationshipshave undergone huge dynamics over the last few decades (Dowding and Martin 2017).Over the years, the USA and Australia have shared one of the strongest and most symbiotictrade relationships in the world, which not only grew stronger with time but also helped both thecountries to prosper significantly due to the symbiotic nature of the relationship between the twocountries. The USA is the fourth largest of the export markets of Australia, with the country exporting amassive share of its surplus production to the markets of the United States of America. The USA is alsothe second largest import source for Australia. The two countries also share a robust relationship interms of Foreign Direct Investments, with the USA being the largest investing country in Australia andAustralia being the fifth largest in that of the USA (Dyster and Meredith 2012). The commercialrelationship between these two countries gained even more strength with the implementation of theFree Trade Agreement between them. This agreement, which came into effect from 2005, was mainlydesigned with the objective of facilitating bilateral trade between the two countries, by eliminatingtrade hurdles like tariff and quota restrictions, as far as possible, especially in the primary and necessarygoods and services sectors, including agriculture and textile industries. The main objective behind thisagreement was to make necessary provisions, such that both the countries could enjoy their respectivecomparative advantages and economies of scales and utilize their surplus productions more efficiently(Cooper 2014).
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