MCROO1A Economics Report Sample

MCROO1A Economics Report

Comments:

The government’s stimulus program (Jobkeepers, Jobseekers) has ended, Australian Bureau of Statistics (ABS) revealing this year’s economy’s production of goods and services (GDP) – rebounding by 3.4 per cent, is this sustainable?

Topic:

Given the above statement: Your manager has asked you firstly, assess the key Macroeconomic Variables and their relevant factors, and then secondly, apply them (the key macroeconomic variables) to the AD/AS Model to determine which phase the Australian economy is in, and then finally comment on the key macroeconomic indicators.
(You must follow the above sequence of approach)

Requirements:

Write an individual memo of about 400-500 words (2 pages excluding the reference list) to brief your manager on the current Australian economy, including the AD/AS Model (in ‘word’ document, 2 pages, excluding the reference list, font size 12 with 1.5 line spacing). The memo should include five sections (headings) namely ‘Overview’, ‘the key economic variables’; ‘the AD/AS Model’; ‘the key economic indicators’; and the ‘conclusion’. Referencing and citation are essential.

COB: Due in week 10 (Thursday, 24 March 2022, 11am on “Portal” (Moodle)) in “Word”.

*You are required to submit an electronic copy of ‘word document’ to ‘Turn-it-in’ for plagiarism checking on “Portal” (Moodle).

* Marking criteria: structure / language/ presentation: 10%; content: 10%.

Solution

MEMO

Subject: Economic scenario in Australia 

Overview

The Australian economy remains strong in 2021. The economy is dependent on trade and resource abundance. According to the MBA Assignment Expert overview, Australia ranks as the 13th in the world with the GDP of $1.6 trillion. It has a strong performance in 2019 and 2020 that led to the strong economic growth. The economy is powered with some major challenges like the COVID19 and natural disaster, living standard and able to respond to the pandemic. The employment rate of the country stood at 5.2% in 2021 (RBA 2021). Household spending enhanced by 6.3%, the largest being in the non-essential spending. 

The Key Economic Variables

GDP growth

The GDP growth in 2021 comes to 8.9 percent as compared to the contradiction of 6.6 percent in 2020. In terms of value GDP stood at Rs 38,22,159 crore in October-December 2021 higher than the figure of Rs 36,22,220 crore in 2020. On the contrary, the growth in population is a major consideration and predicted to be weak for different years. Hence, GDP growth will revive only when there would be a jump in the productivity. 

Unemployment Rate 

The unemployment rate in Australia stood at 4.2 percent. This projects a major recovery to the pre COVID-19 unemployment rate of 5%. The pandemic has led to a major increment in the labor market underutilization with more people requiring a job (Australian National Accounts: National Income, Expenditure and Product 2021). 

Inflation

The annual rate of inflation raised to 3.5% in Q4 2021 a strong increase from 3% in Q3 and beating the market estimation of 3.2% that is driven by higher fuel prices and issues in global chain.

The AD/AS Model

For Australia in the short run, the outward shift in the total supply curve will lead to higher output and lower prices. In the same fashion, an outward shift in the total demand curve will lead to increment in the output and price rise. When it comes to the short-run, the increment in the money will lead to increment in the production due to the shift in the aggregate supply. Higher production of goods happens because the output enhances and more goods can be purchased due to lowering of the prices (Mao 2021). In the case of long run- the AS and AD are impacted by the capital and technology. Hence, everything in the economy is optimal.

Key Economic Indicators

Economic growth 

The economy of Australia was 4.2% higher than the previous year, with the GDP in 2021 being 3.4% more than the pre-pandemic level of December 2019 (BBC 2021). 

Employment 

Employment rate in Australia average 59.15 percent from 1978 until 2021 that reaches a high of 63% in June 2021 (Mao 2021). Australia ranks well on job quantity due to the high rate of employment and low rate of unemployment 

Conclusion

The interest rate appears to be at a superficial level, although some rates have increased recently. The dollar exchange rate has been at its low in the past year. The economy of Australia is on the continuous rise and is depicted to grow further as compared to the pre-pandemic time. 

References

Australian National Accounts: National Income, Expenditure and Product, March. (2021). Australian Bureau of Statistics. Retrieved from: https://www.abs.gov.au/statistics/economy/nationalaccounts/australian-national-accounts-national-income-expenditure-and-product/latestrelease

BBC. (2021). Covid: Australia economy climbs back to pre-pandemic size. BBC News. Retrieved from: https://www.bbc.com/news/business-57326054.

Mao, F. (2021). 'Fortress Australia': Why calls to open up borders are meeting resistance. BBC News. Retrieved from: https://www.bbc.com/news/world-australia-57224635

RBA. (2021). Key Economic indicators. Retrieved from: https://www.rba.gov.au/snapshots/economy-indicators-snapshot/