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

The Current Status of the Australian providenceAssignment 3A Collect, organize, present and analyse a hustle of data which describes the current state of the Australian economy(with respect to the carry on cycle).B Describe and analyse the monetary policy stance which has been adopted by the RBA over the past 2 years. How effective is monetary policy in achieving the policy objectives of the government?Introduction Part A===================This report contains an certified and balanced analysis of a range ofdata which assists in represent the current state of the Australian economy inrelation to the consider cycle.Relevant DataFor various reasons, economic practise fluctuates from year to year. Periods of wage hike activity, output and income are called booms andperiods of slower activity are called a trough. in the main when realGDP is above 4 per cent p.a. it would be considered a boom year andwhen there are technically, two consecutive billet of negative economic 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 otheryears, the level of activity is slow, so growth in output, income and transaction is also less than average. These fluctuations are calledthe trade cycle. There are a number of economic indicators which are useful fordetermining what stage of the trade cycle the Australian economy iscurrently in, such as rank domestic product, unemployment, inflation,interest regularizes, building approvals and home loan approval, just to abduce a few.Changes in unite DemandChanges in the level of Aggregate Demand (AD) are criticaldeterminants of trade cycle fluctuations. GDP is the contribute ofconsumption, investment, government purchases and net exports. Y = C+ I + G + NXThe adjacent table outlines these elements and influencing factors.Elements of GDPMajor factors affecting this componentConsumpt ion (C) liquid income (Yd) interest rates (r) expectations about thefuture stock of wealth.Investment (I) past tense levels of profit expectations about the futre businessconditions interest rates (r)Government outlay refractory in accordance with government policyNet exportsDetermined by the interplay of C & I conditions in other countries andAustralia.Output and UnemploymentAs Gans, King and Stonecash state, Changes in the economys output ofgoods and services are strongly correlated with changes in theeconomys utilization of its poke forces. Generally asGross Domestic Product declines then the rate of unemployment rises,basically as companies produce less goods and services, they requireless round or are not employing new members, thus the number of battalion