ECON1246 ECON1273 Comparison Of Performance Of Australian And Chinese Economies Assessment 2 Answer

Answer :

MACROECONOMICS 1 (ECON1246 ECON1273)

Assessment 2

Part A Australian and Chinese business cycle.

1. Complete the table / data for both Australia and China and include this as an attachment to your report.  Answers must be accurate to two decimal places.

2. What phase of the business cycle was the Australian economy in over the period 2018 to 2019?  Briefly explain.

What contribution did the following components of Aggregate Demand; Consumption spending, Investment spending and Net exports make to the cycle over this period?

3. What phase of the business cycle was the Chinese economy in over the period 2018 to 2019?  Briefly explain.

What contribution did the following components of Aggregate Demand; Consumption spending, Investment spending and Net exports make to the cycle over this period?

Answer:

1. Attached:
2. The Australian economy is in the growth phase of business cycle but at the declining rate. The change in RGDP over 2018-2019 is positive but its lower than the previous year. The inflation rate is high. The labour productivity has reduced slightly. There is increasing in real consumption spending but at a slower rate. The real investment spending is negative as the consumer confidence index is declining. There is decline in investments pending.  Thus overall the country is facing lower spending and decline in business cycle with people less interested in investment in business and has more consumption spending.
3. The nominal GDP has increased a higher rate than last year but the inflation rate is very high and so the RGDP is increasing at a declining rate. The real consumption spending has declined from last year but there is increase in the fixed asset investment spending. The consumer confidence is high and the net exports of the country have increased significantly. The country is seeing more investment in business for exports rather than internal spending. The country has the growing business cycle mainly for exports.