Assignment on Economics for Business (Doc)

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Running Head: ECONOMICS FOR BUSINESSEconomics for BusinessName of the StudentName of the UniversityCourse ID
ECONOMICS FOR BUSINESS1Table of ContentsIntroduction......................................................................................................................................2Components of GDP........................................................................................................................2Analysis of trend in GDP.................................................................................................................3Factors explaining trend in GDP.....................................................................................................5Economic growth and government policy.......................................................................................6Policies of Australian government to influence economic growth..................................................7Future outlook for Australia............................................................................................................9Conclusion.....................................................................................................................................10Reference list.................................................................................................................................11
ECONOMICS FOR BUSINESS2IntroductionThe goods and services produced in a nation in a given year is measured with theGross Domestic Product. It is the monetary value of all the produced goods and services ina nation. In order to find out market values of goods and services quantity of producedgoods and services are multiplied with respective market prices. The market price caneither be current year market price or market price of a pre-determined base year. GDPpresented with current year market price is called nominal GDP presented with base yearmarket price is known as real GDP. GDP is considered as a single composite measure ofwell-being (Uribe and Schmitt-Grohé 2017). An overtime increase in GDP indicates growthof a nation. Rate of change in GDP is a proxy measure of economic growth.The paper examines trend in Australian GDP in the last five years. GDP ofAustralia is dominated by service sector with contribution of service sector being more than60% in GDP (Rieber 2017). After discussing trend growth rate, the paper tries to findpossible factors explaining the concerned trend. Government policy often plays a key rolein determining economic growth. In this context, policies undertaken by Australiangovernment to promote growth is discussed.Components of GDPPrimary, secondary and tertiary sectors are the three main contributor of grossdomestic product. For a developed economy like Australia, service sector has thedominating share in GDP. The service sector contributed nearly 69.4% of GDP (rba.gov.au2018). Among different sub sectors in the service sector, the most vital sector is financeand insurance. Four big banks of Australia namely Commonwealth Bank, Westpac, ANZand NAB belong to the list of world’s fifty safest bank. After finance and insurance, theother important services of Australia include professional and technical service, education,tourism, ownership dwellings, media and communication, tourism and such others.Secondary of industrial sector having a contribution of 26.6% is the second largestcontributor of GDP (Nielsen 2017). Among different industries, the two major industries ofAustralia economy are construction and mining. Mining industry alone contributes 8.8% of
ECONOMICS FOR BUSINESS3GDP with more than 50% of the coal exported to different nations. The contribution ofmanufacturing is 5.9%. Followed by mining, the next important industry is constructionwith the share GDP being 7.7% (Yuet al.2017). The smallest contribution in GDP hascome from agriculture. Contribution of agriculture in Australian GDP is only 4%. Despitehaving relatively small contribution in GDP, the sector is important both for the internaland external economy.4%27%69%Sectoral CompositionAgricultureIndustryServiceFigure 1: Sectoral Composition of Australian GDP(Source: rba.gov.au 2018)Analysis of trend in GDPThe figure below shows the GDP of Australia in the last five years. GDP being arepresentative measure of economy’s aggregate output, analysis of GDP over the last fiveyears reveals the economic performance of Australia.
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