HC1072 Economics and International Trade | Report
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Economics and International Trade (HC1072)
Added on 2020-05-28
HC1072 Economics and International Trade | Report
Economics and International Trade (HC1072)
Added on 2020-05-28
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ECONOMICS AND INTERNATIONAL TRADEName of the StudentName of the UniversityAuthor’s NotePage 1
Table of ContentsIntroduction......................................................................................................................................3Economic growth rate, GDP, GDP per capita of UK and Australia during the period 2012-2016.3Economic growth of Australia and UK.......................................................................................3GDP of UK and Australia............................................................................................................5GDP per capita of Australia and UK...........................................................................................8Production Possibility Frontier (PPF)........................................................................................10Business Cycle...........................................................................................................................11GDP accounting method............................................................................................................12Conclusion.................................................................................................................................13References......................................................................................................................................14Page 2
IntroductionThis report elucidates on the comparison and contrast of economic growth, GDP andGDP per capita between the two nations. In this study, the two countries selected for making thiscomparison and contrast are UK and Australia. Economic growth of a particular nation signifiesvalue of commodities produced by an economy and is estimated from real GDP. GDP signifiesthe monetary measurement of market value of final products and services produced within theboundary of the country during particular period of time. Fluctuation in GDP of the nation occursdue to the concept of business cycle while certain macroeconomic indicators such as rate ofunemployment, inflation rate fluctuate due to variation in country’s GDP. Besides this, GDP percapita is also useful for comparison between the countries as it reflect on the nation’s relativeperformance. In this report, the differences as well as similarities between Australia and UK isalso examined with the help of GDP accounting method, Production Possibility Frontier (PPP)and business cycle. Economic growth rate, GDP, GDP per capita of UK and Australia during the period 2012-2016Economic growth of Australia and UKThe UK economy has been considered as one of the globalised and highly developedeconomies in the globe. According to the office for National Statistics, in the year 2012, the UKeconomy again dipped into recession after experiencing partial recovery during the period 2010-2011. After the year 2007-2008, this nation again went into recession because of several factorsthat includes European recession, weakness of the bank’s lending, lower confidence owing toPage 3
austerity measures and declining real incomes. Since the beginning of the year 2013, theeconomy of UK has experienced increased economic growth (Hartwell 2017). The recovery hasbeen relatively stronger especially in the service sector rather than manufacturing sector and theoutput of industries. Furthermore, during the year 2016, the economy of UK grew by around1.8% in comparison with the previous year (Dhingra et al. 2016). During this period, the rate ofinflation has remained stable, the lowest being recorded at 0%in the year 2015. This impact hasalso been reflected in the monthly CPI (Consumer Price Inflation) during this year. On the otherhand, the Australian economy has experienced even growth during this period. In addition, theinflation rate was low, employment rate was high, financial system was stable and public debtwas low during the year 2012-2016. Moreover, the economic growth of Australia had averagedto 3.5% during this period and was highest as compared to past few decades (Shahiduzzamanand Alam 2014). This country’s economic growth also remained unaffected by the financialcrisis because of strong banking system and lower inflation rate. Increase in economic growth ofAustralia during 2012-2016 was mainly because of increase in balance of trade, rising levels ofFDI (foreign direct investment) due to varied natural resources and fewer restrictions on importof goods and services. As a result, this increased the nation income of this nation and this in turnmade this country highly dynamic as well as flexible.Page 4
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