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Economic Principles Assignment Solution

   

Added on  2020-09-08

18 Pages5053 Words34 Views
ECONOMICS

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Explaining economic principles.............................................................................................1Interpretation and explanation of economic models..............................................................3TASK 2............................................................................................................................................5Unemployment concept of economy......................................................................................6Inflation concept of economy.................................................................................................7TASK 3............................................................................................................................................8TASK 4..........................................................................................................................................10TASK 5..........................................................................................................................................12CONCLUSION .............................................................................................................................13REFERENCES .............................................................................................................................14

INTRODUCTIONA branch of study which comprises with production, exchange of money, consumption ofgoods and services etc. is known as economics. It used by an individual, companies as well asgovernment of a country in order to take fruitful decisions. In the present project a specific topicis taken into account which is “unemployment and inflation in Australia”. In an economy widerange of factors and elements included which affect to the firms and local community. Somemodels and principles related with the economic are explained as well as interpreted in thepresent study. Apart from this, the current report emphasises on unemployment and inflationconcepts that how these create impact on decision making of people, entities and overallAustralian government. Further, economic outcomes are in which ways influenced throughmarket structure and macroeconomic environment is assessed. In order to meet estimatedoutcomes in an economy, businesses and government make effective strategies which arediscussed in this project. At the end present issues faced by Australian economy are analysed aswell as responses from economic actors are evaluated in the study. TASK 1Explaining economic principlesAs per the economist Gregory Mankiw, there are basically ten principles involved in theeconomics which are segregated into three basis. Further, such principles of economics areexplained below:I. How community take decisions Principle 1: Population face trade-offs In order to get a particular thing or facility then mandatory to give up any other things. Inthis case, people of the country face condition of trade-off among two particular things wherethey provide one source to get another (Apple, 2017). For example: to complete task necessary togive up extra or leisure time. Principle 2: Cost of anything is what which given up to get somethingAn expense which is made on another thing or on the best alternative and previouscondition is forgotten, known as the opportunity cost. For example: cost of opportunity is1

spending amount for going college and instead of that an individual can use that time forearnings. Principle 3: Rationale population think towards profitThose people who take decisions of purchasing after considering marginal profit and costare known as rationale or logical. Due to this, they always consider margin at the time of buyingor purchasing goods and services. For instance: chose for purchasing one more apple or not. Principle 4: People react towards incentives Generally community use expense and profit analysis due to which always respondtowards the incentives (Nayyar, 2017). For example: High level of tax rates on cigarettes forprotecting issue of smoking within an economy. II. Ways through which people interact with each otherPrinciple 5: Trade make better off to everyone Trade helps in order to gain competitive benefits after providing wide range of attractivegoods and services up to the local community. Principle 6: Market is generally a good method for organising economic activity The place where products and services traded among buyer and seller is one of the bestarea for generating income. Further, situation of surpluses in an economy is also producedthrough this principle. Principle 7: Governments can enhance market outcomes sometimes When condition of market failure incur in economy then government intervenes forpromoting efficiency as well as equity to reduce this issue (Rho and Tomz, 2017). III. Trends and Forces that in which way they influence whole works of economy Principle 8: Living standard of people depends on production of countryWhen output level in country enhances then consuming as well, it leads to boost upstandard of living of the population within overall economy. Principle 9: When governments prints too much money then price increases 2

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