The Current Status of the Australian Economy :: AustralianEconomics Trade Cycle Essays

The Current Status of the Australian Economy appellation 3A Collect, organize, present and analyse a range of information which describes the contemporary state of the Australian economy(with respect to the trade stave).B hear and analyse the monetary indemnity stance which has been adopted by the RBA all over the past 2 years. How effective is monetary policy in achieving the policy objectives of the political science?Introduction Part A===================This report contains an informed and fit analysis of a range ofdata which assists in depicting the current state of the Australian economy inrelation to the trade cycle. pertinent DataFor various reasons, economic activity fluctuates from year to year. Periods of rising activity, production and income are called prospers andperiods of slower activity are called a trough. for the most part when true(a)GDP is above 4 per cent p.a. it would be considered a boom year andwhen there are technically, two consecu tive quarters of ostraciseeconomic growth it would be considered a trough or a recession.In the short term the level of economic activity fluctuates. In someyears, growth is fast and business conditions are booming. In some otheryears, the level of activity is slow, so growth in output, income andemployment is withal less than average. These fluctuations are calledthe trade cycle. There are a tally of economic indicators which are useful fordetermining what stage of the trade cycle the Australian economy iscurrently in, such as Gross internal product, unemployment, inflation, involution rates, building approvals and home loan approval, just toname a few.Changes in Aggregate trainChanges in the level of Aggregate Demand (AD) are criticaldeterminants of trade cycle fluctuations. GDP is the sum ofconsumption, investment, government purchases and net exports. Y = C+ I + G + NXThe following give in outlines these elements and influencing factors.Elements of GDPMajor factors affect ing this componentConsumption (C)Disposable income (Yd) interest rates (r) expectations about thefuture stock of wealth.Investment (I)Past levels of attain expectations about the futre businessconditions interest rates (r)Government expenditure persistent in accordance with government policyNet exportsDetermined by the interplay of C & I conditions in other countries andAustralia.Output and UnemploymentAs Gans, baron and Stonecash state, Changes in the economys output ofgoods and services are potently correlated with changes in theeconomys utilization of its labour forces. Generally asGross Domestic Product declines then the rate of unemployment rises, essentially as companies produce less goods and services, they requireless staff or are not employing new members, thus the number of people