INTRODUCTION TO MICROECONOMICS (PDF)
Added on 2021-05-31
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Running head: ECONOMICS ASSIGNMENT Economics AssignmentName of the StudentName of the UniversityAuthor Note
ECONOMICS ASSIGNMENT 1Introduction The global economy and its dynamics over the years have been dependent on manyfactors and occurrences, which in turn can be explained and interpreted in the theoretical andconceptual framework of economics. One such influencing factor, contributing significantlyin the global economic dynamics, especially in the contemporary period, is the concept ofmarket. “Market”, in terms of economics, refer to the demand and supply interactions and thebuyer and seller activities in any industry at a point of time (Salvatore 2013). Equilibrium in amarket, usually occurs at the point where the demand and the supply forces mutually agree tosettle in terms of price and quantity of the commodity or service. One such important market of global significance and implications is the labourmarket in different countries, where the demand and supply of labour resources interact witheach other and the price of the labour (known as wage) is determined in the process.However, often leaving these dynamics to the free market leads to creation of equilibriumsituations where one side or both the sides are negatively affected, which in turn requiresgovernment monitoring and regulation as dynamics in the labour market have considerableimplications not only on the welfare of the labours but also on the overall economic well-being of the country (Ehrenberg and Smith 2016). Keeping this into consideration, the concerned essay takes into account the recentissue of visibly slow rate of growth of wages in the labour market of one of the globallysignificant and highly developed economies of Australia in the recent periods and tries toanalyse the impacts and risks which can arise from the same, using the conceptual frameworkof economics.
ECONOMICS ASSIGNMENT 2Australian Economic Overview As discussed above, the economy of Australia has been one of the most developedand highly prospering economies in the global scenario for decades known for its economicstability, robust government and policy frameworks and huge industrial and service sectorexpansion. This economic prosperity of the country can be seen from the impressiveperformance of almost all the macroeconomic indicators like the growth of GDP, rate ifinflation, employment generation and others (Dyster and Meredith 2012). The increasedprosperity of the country, over the years, has led to huge increase in the population, which inturn can be attributed to both the increase in the domestic population as well as the increasinginflow of the immigrants from all parts of the world in search of higher economic welfare andemployment scopes. However, in the recent periods, the economy of the country inconsideration has been several bothering issues of which one of the primary ones is that ofthe falling rate of growth of wage in the country over the last few years (Findlay and Garnaut2017). Slow growth rate of wages in the country The dynamics in the wage growth rate in Australia can be seen with the help of the WagePrice Index of the country, which measures the price of labour and its changes over the years.This is shown as follows:
ECONOMICS ASSIGNMENT 3Figure 1: Australian Wage Price Index (1998-2015)(Source: Scutt 2018)From the above figure, it is evident that the wage growth rate, which rose andremained consistently high from 2001 till 2009, fell drastically after that period, recovering tosome extent in 2010-2011. However, post 2011 the rate fell alarmingly and is stillconsiderably low in the recent periods, with no sign of recovery in the indicator in the nearfuture (Hawthorne 2016). Given the fact that a lot of the economic welfare of the population of the country aswell as the overall aggregate demand and productivity of the economy of the same dependson the level of wages received by the workers of the country, the decline and slowdown in thegrowth rate of the wage rates in Australia in the recent years is obviously a concerning issuefor the government of the country as well as for the population and there are several reasonsbehind this problem faced by the Australian economy, the primary ones being elaborated inthe following section.
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