Economics Paprt

ABSTRACT:

The global economy is facing serious problems: members of the EU are defaulting, the US’s credit rating is falling, England is facing huge increases in living costs leading to social unrest and many developed economies struggling to fight recessions. Global conditions still haven’t reached the bottom of the international business cycle as of yet since countries are still defaulting. Meanwhile the Australian economy seems to have avoided many of the negative aspects of the global downturn, although its to early to definitively say Australia has escaped the worst as worse may still come in the form of a double dip global recession. The Australian government has not only during the recent global financial crisis but also over the past decade managed the Australian economy effectively. The governments use of fiscal stance and supply side reforms and the RBA’s use of monetary policy have proven to be an effective method of managing 4 key aspects of the economy: GDP growth, inflation, unemployment and trade. These four aspects have stayed relatively close to targets set by the government or recognised “sustainable” levels. The report divulges further into these 4 aspects and further explains the underlying dynamics behind the figures and gives some useful conclusions about the current standing and where future policy may go in the Australian economy. The findings of the report confirm that Australian government has managed the economy well in turbulent times.

TABLE OF CONTENTS

TITLE PAGE I

ABSTRACT II

TABLE OF CONTENTS III

SECTION ONE: INTRODUCTION 1

1.1 INTRODUCTION

SECTION TWO: POLICIES EFFECTS ON: 2

2.1 CURRENT MACROECONOMIC POLICY SETTING IN AUSTRALIA

2.2 ECONOMIC GROWTH

2.3 INFLATION

2.4 UNEMPLOYMENT

2.5 TRADE

SECTIONTHREE: CONCLUSIONS/PREDICTIONS AND RECOMENDATIONS 3

3.1...