Macroeconomic Analysis of Australia: Real GDP Growth, Inflation, Unemployment, Net Export and Real Exchange Rate

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
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1ECONOMICS ASSIGNMENT
Executive Summary:
This report has intended to analyse some chief macroeconomical factors like real GDP
growth rate, inflation rate and unemployment rate to understand the condition of existing
business cycle of Australia. Moreover, this report has described about the relation between
real exchange rate and net export of Australia. Moreover, a relation between the Fed Fund of
U.S.A and the cash rate of Australia has also described. With the help of those
macroeconomical indicators, this report has intended to describe macroeconomic outlook of
Australia.

2ECONOMICS ASSIGNMENT
Table of Contents
Introduction:...............................................................................................................................3
Relation between real GDP growth of Australia with its inflation and unemployment rate:....3
Analysis between Real GDP growth and inflation rate:........................................................4
Analysis between Real GDP growth and unemployment rate:..............................................5
Relation between net export and real exchange rate of Australia with USA:............................7
Relation between Australia’s cash rate and Federal Reserve’s fund rate:.................................9
Conclusion:..............................................................................................................................10
References:...............................................................................................................................11

3ECONOMICS ASSIGNMENT
Introduction:
Australia is one of the wealthy nations, possesses healthy economic condition and
consequently becomes the 14th largest economy in this world. The exporting sector and
service sector have played vital role for contributing significant portion to the country’s
national income or gross domestic product (GDP). Moreover, the country has successfully
reduced its poverty level (Luke 2018). With strong agricultural sector and mining sector, the
country has obtained an important position in world economy. However, the economic
condition of this country has experienced various obstacles for last few years. On the
contrary, the United States of America has remained the largest economy across the world.
As a result, the U.S dollar has considered as primary reserve currency (Frank 2018).
Moreover, U.S.A has remained on the chief trading partner of Australia. Hence, this report
has intended to focus on some macroeconomical indicators, like real GDP growth rate,
unemployment and inflation rate of Australia. Moreover, the report has also intended to
establish a relationship between net export and real exchange rate of Australia with the
U.S.A. In addition to this, the specified report is going to analyse that whether the Federal
Reserve Fund’s rates of the U.S.A has influenced Australia or not.
Relation between real GDP growth of Australia with its inflation and unemployment
rate:
Real Gross Domestic Product ( GDP) of Australia measures the value of economic
output of this country for a particular time based on a price level of particular year and
consequently this measurement provides an inflation or deflation adjusted real national
income of Australia (Jha 2018). This can influence the country’s inflation rate and
unemployment rate accordingly. On the other side, inflation rate is another macroeconomical
concept that represents the rate of increasing general price level of goods and services of
Australia. This inflation rate has a negative relationship with purchasing power parity of an