Principles of Economics - Sample Assignment

PRINCIPLES OF ECONOMICS ASSIGNMENT 1
PRINCIPLES OF ECONOMICS
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PRINCIPLES OF ECONOMICS ASSIGNMENT 2
Australia’s growth rates for the last ten years
Australia is among the richest countries in Asia-Pacific with high rates of economic
freedom and has enjoyed economic growth for a longer time period.
An important measure which may be used to measure the rate of growth for the economy
of Australia is the rate at which the gross domestic product (GDP) increases. Gross domestic
product indicates the final dollar value of all the final goods produced by a country within its
borders over a specified period of time and thus helps gauge the economic performance of a
country (Abbott & Loneragan, 2014, p.353). For the period of ten years just before the great
recession, from the year 1999 to 2008, the gross domestic product of Australia grew by 3.4% per
year on average basis. However the Australian economic growth rate decelerated in 2009 to
1.6% due to global financial turmoil. 2009 was the poor year for the Australian economy after
the greatest recession in 1991, but the Australian economy still showed greater resilience towards
the experienced global crisis (Arthur, Archer & Herd, 2014, p.361). Australia was among the few
developed countries that posted a positive record of economic growth rate in 2009. The
economic performance of Australia improved from 2009 in the following years and posted a
gross domestic product growth rate of 2.7% on average from the year 2010 to 2017. The grow
rates of the gross domestic product of Australia (Annual percentage Variation) for the last ten
years was 2.6% in 2008, 1.7% in 2009, 2.4% in 2010, 2.6% in 2011, 3.6% in 2012, 2.1% in
2013, 2.8% in 2014, 2.4% in 2015, 2.5% in 2016 and 2.4% in 2017.
In conclusion, for the last ten years, since 2009, the economy of Australia has been
growing but at a slow rate. This is clearly indicated by the rate of growth of the economy of
Australia gross domestic product which is at 2.7% on average basis. The Australian economy

PRINCIPLES OF ECONOMICS ASSIGNMENT 3
was anticipated to grow at a higher rate this year with the Reserve Bank of Australia forecasting
the gross domestic product growth rate to be between 2.75% and 3.75% early 2018.
Reasons for the variation in growth rates
In any economy, there is the likelihood of the economy to grow or deteriorate based on
the prevailing economic conditions of the country. For the last ten years, the economy of
Australia has been growing but at a slower rate. Based on the annual variation percentage rates,
some of the years indicate a higher grow rate in the domestic product than the others.
During the year 2008, the economy of Australia was experiencing a better growth rate. It
was at its fast pace of economic growth. The demand of the raw commodities has increased from
developing countries. This led to rise in the prices of the global commodities and thus played a
major role in improving the economy of Australian. The terms of trade were higher and this led
to a rise in the purchasing power of the households’, increased commodity prices led to
improvement in mining sector investment, majorly coal and iron. Investment in the mining sector
being one of the major drivers of growth in Australian highly contributed towards positive
economic growth. Iron and coal production capacity expanded leading to increased Australia’s
exports to the Asian market (Barger & Southcott, 2015, p.167). The financial sector and mining
sector rapidly expanded leading to a rise in the gross domestic product of Australia. The
manufacturing output shrunk steadily. This made the larger part of the Australian economy shift
to the mining bit of the economy and production of services. Manufacturing was replaced by the
financial sector and it became the largest single industry in the economy of Australian.

PRINCIPLES OF ECONOMICS ASSIGNMENT 4
During the year 2009, the economy of Australia growth rate slowed down during the
early three months of the year. This was as a result of bad weather which greatly affected the
exports and homebuilding deceleration. This led to decreased annual growth. Gross domestic
product growth rate was 0.3% in the first three months. This was a decrease from 1.1% in the
previous quarter but it was expected as predicted from the economist’s point of view. As a result,
the annual growth decreased to 1.7% from the previous year which had an annual growth rate of
2.6%. In accordance with the Australian Bureau of Statistics, this was the slowest growth rate
ever. Bad weather was blamed for this sluggish economic growth and the economy was said to
be resilient (Lowthian, Jolley, Curtis, Currell, Cameron, Stoelwinder & McNeil, 2011). The
adverse weather conditions lowered the exports particularly the coal and iron in the west. As a
result of this economic deterioration, the Australian dollar decreased its value by 0.4% to around
$0.7537 according to the gross domestic product statistics.
During the year 2010, the economy of Australia grew by 1.2 per cent in the second
quarter. This was an increase from 0.7 per cent grow rate reported for the first quarter. Gross
domestic product had been forecasted to rise to 0.9% by the Economists for the second quarter.
The annual gross domestic product growth rate was 3.3 per cent. Household expenditure
measured from the final consumption contributed much towards the improved economic
performance (Chapman, Cullen, Johnson & Beca, 2010, p.1071). The household spending
contributed 0.9% to the total 1.2%increase. Trade also contributed towards the growth with net
exports adding 0.4 percentage points. This was much improvement from the previous years’
trade results. Mining prices were the major factor to the change in the terms of trade of Australia.
Terms of trade refers to the relative price of the goods and services that a country exports
compared with its imports. Terms of trade improved by 12.5 per cent and raised the ratio to