(PDF) Assignment on Economics for Business

   

Added on  2021-06-15

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Running head: ECONOMICS FOR BUSINESS Economics for BusinessName of the StudentName of the UniversityAuthor Note
(PDF) Assignment on Economics for Business_1
ECONOMICS FOR BUSINESS 1Table of ContentsSolution to Problem 1.................................................................................................................2Solution to Problem 2.................................................................................................................4i. India imposes 30% tariff on chickpeas of Australia...........................................................5ii. China increases demand for Australian wine.....................................................................6iii. Federal Government of Australia plans to spend to increase the capacity of electricpower generation....................................................................................................................7iv. Fall in the imported oil price in Australia.........................................................................7v. Increase in the inflow of immigrants.................................................................................8References................................................................................................................................10
(PDF) Assignment on Economics for Business_2
ECONOMICS FOR BUSINESS 2Solution to Problem 1 The performance of an economy and the growth and development of the same overyears depend considerably upon the performance of the different macroeconomic aspects inthe concerned economy over time (Ascari & Sbordone, 2014). These macroeconomic aspectsor indicators mainly consist of the Gross Domestic Product and its growth dynamics whichmeasures the total productivity of the economy, the unemployment rate, which sheds light onthe labour market dynamics in the economy and the rate of inflation in the concernedeconomy, which shows the overall movements of the average price levels of the commoditiesand services in the economy at a point of time. Together each of these indicators and theirmovements and trends over time indicates towards the level of economic well being and thehealth of the economy of the country in consideration (Uribe & Schmitt-Grohé, 2017). Taking this into consideration, the concerned section of the assignment tries to studythe trends which can be observed in the movement in the rate of inflation as well asunemployment rate in the dynamic and highly developed economy of that of Australia in thetime span of 2001 to 2016. The concerned section also tries to define and explain therelationship (if any) between the above mentioned macroeconomic indicators in case ofAustralia, using the conceptual framework of economics. The inflation rate and rate of unemployment in Australia in 2001-2016 and theirdynamics can be seen from the following figure, with inflation in the vertical axis andunemployment in the horizontal axis:
(PDF) Assignment on Economics for Business_3
ECONOMICS FOR BUSINESS 344.555.566.5700.511.522.533.544.55Australia's unemploument and inflation rate Unemployment Rate InflationrateFigure 1: Inflation and unemployment rate of Australia between 2001 and 2016(Source: Abs.gov.au, 2018)As can be seen from the above figure, there exists considerable deviations andvariations in the relationship between the inflation and unemployment rate in the country inthe concerned period. However, the linear trend line shows a roughly negative relationshipbetween the two variables into consideration. That, is, in the country during the periods ofhigh inflation, unemployment can be found to be considerably low and vice versa. Macroeconomic Theory of Phillip’s Curve The above observed negative relationship between the rate of inflation and the rate ofunemployment in Australia within the period taken into consideration is found to betheoretically existing in the conceptual framework of economics, known as the Phillip’sCurve theory. According to this theory, in a general framework, the inflation of a country hasan inverse relation with the unemployment dynamics of the same, which can be shown asfollows:
(PDF) Assignment on Economics for Business_4

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