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Economics For Business - Assignment Sample

   

Added on  2021-06-17

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Running head: ECONOMICS FOR BUSINESS Economics for BusinessName of the StudentName of the UniversityAuthor Note

ECONOMICS FOR BUSINESS 1Introduction Over the years, the global economic scenario has experienced considerable dynamicsand growth owing to the changing trends in the economies of the different economies of thecountries across the globe. The economic performance and growth of a country, in turn, canbe considerably measured by the dynamics and trends in several macroeconomic variablesand indicators of the country over the years (Canto, Joines and Laffer 2014). Thesemacroeconomic indicators, each having their own implications on the economy as a whole,are of considerable significance as much of the health of the economy as well as theeconomic well being of the population of the country depends on the same. One of the most important macroeconomic indicators in this context is that of theGross Domestic Product of a country and its dynamics. The Gross Domestic Product of acountry within a particular period of time shows the value of the final goods as well asservices which are produced within the geographical domain of the country within thatparticular period (Eichhorn 2013). Thus, the GDP growth of a country shows the growth inthe total productivity of the country, which in turn reflects towards the total income, totalexpenditure as well as on the employment and economic well being of the population of thecountry. GDP on the other hand can be of two types- Nominal and Real. While the NominalGDP of the country shows the money value of the total production of the country withoutadjustment of inflation, the Real GDP shows the total economic output the value of which isinflation adjusted (Kubiszewski et al. 2013). Thus, a positive growth of GDP is associatedwith economic boom and a negative one with that of recession and the overall dynamics ofGDP of a country reflects the general economic performance of the country to a considerableextent.

ECONOMICS FOR BUSINESS 2Components of GDP: Case study of Australia The Gross Domestic Product of a country within a period of time, is usuallycomposed of four major components, which can be seen with the help of the followingexpression: GDP (Y) = C + I + G + NX [Where, C is the personal consumption expenditure in the economy, I shows thebusiness investment expenditure, G is the expenditure or purchases of the government of thecountry and NX denotes the net exports of the country, which in turn shows the value leftafter deducting the value of imports from the value of exports (X-M)] Each of these components are as follows: C- The primary as well as the most significant component of GDP of any country is thepersonal consumption expenditure in the country, which in turn is spent in buying differentgoods and services in the country. I- This shows the business investment expenditure of a country, which usually include thepurchases which the companies make in the domestic boundaries in order to produce goodsand services in the country. However, purchase for replacing any existing commodity is notcounted in the GDP (Papell and Prodan 2012). G- This component of the GDP of a country shows the total expenditures which are made bythe government of the concerned country, which includes expenditures in the aspects ofindustry, public goods and services, infrastructural development and others.

ECONOMICS FOR BUSINESS 3NX- Exports add to the value of the GDP of the country while imports subtract from thesame. The Net Exports of a country, thus shows the value which is left after deducting thetotal import value from the value of the total exports. Australian Economy In this context, one of the most significantly developed economies across the globeover the years, has been the economy of Australia, whose growth and development can beseen in its robust GDP statistics (Mathur). The GDP of the country in 2017, can be seen to be1.69 trillion AUD dollars and the country is also seen to be ranking fourteenth globally interms of Nominal GDP and twentieth largest in terms of the PPP adjusted GDP in the globalscenario and is counted as the second wealthiest nation in terms of per adult wealth, rankingjust behind Switzerland, thereby appearing as one of the most dominant and significanteconomies in the global framework (Pocock, Charlesworth and Chapman 2013). Figure 1: Share of different components in GDP of Australia(Source: Banerjee 2012)

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