ECONOMY OF CHINA

QUESTION

Collecteconomic data for three countries: Australia, China and Greece.The data is toobtainedfrom official sources as time series forthe key macroeconomic variables. These arereal GDP, real GDP per capita, annual real GDP growth, the unemployment rate, the interest rate, andtheinflation rate.  For Australia and Greece,also collect data series for government expenditure and taxes. The data are to be inannual format for the years starting from 1999-2000 up to and including 2010-2011 (or the most recent available).

1. Present the data above in tables for each variable. Present in charts the data for real GDP, real GDP per capita, annual real GDP growth, the unemployment rate, the interest rate andthe inflation rate, witheach variable in a separate chart.  Show one variable across the three countries in the same chart wherever possible.  Calculate the annual real interest rateand similarly present it in a chart including the three countries. Also in one chart for each of Australia and Greece, present its government expenditure, taxes and GDP. The charts must be correctly titled, labelled and sourced.                                               (8 marks)

1. Compare the variables in the charts for each country and comment about similarities and differences in the level and movement of the variables amongst the threecountries. Include a description of the budgetary positions forAustralia and Greece over the period.

(5 marks)

1. Based on the data you have presented, discuss how the GFC has influenced the economy for each country over the period.Discuss why the effects on each country may differ.                                                                                                                               (5 marks)

1. Make use of AE diagrams to analyse and contrast the macroeconomic behaviour of Greece and Australia. Discuss possible reasons for the differences.

(7 marks)

Up to 5 marks will be deducted for poor presentation including tables, charts and referencing.

SOLUTION

If we observe the Real GDP table and chart we can see that the variable is highest for China, then for a Australia and then Greece.GDP of China is showing an increasing trend which can be attributed mainly to its rise of population as well as other factors.

When we compare the Real GDP per capita in the table and chart, we can see that Australia has the highest value, followed by Greece and then China. China in comparison has very low value of the macroeconomic indicator. The overall economy is growing but the  per person economic condition is still very low, though it shows some improvement over yesteryears. Its economic situation is mainly due to its enormous population.

Inflation as per graph and table has no definite pattern for all the three countries.

In order to observe the pattern, the line graph is more suitable. It can be observed that Greece and Australia have similar patterns, though at different levels for most of the variables.

The budgetary position as evident by govt expenditure and GDP for Greece and Australia show a similar pattern for expenditure, though at different levels. The Govt. expenditure in Australia is at a much higher level. The G.DP of Australia is at higher level than Greece and the pattern is different. The rate of change in GDP is significant (rise is sharp and few falls are also sharp.Greece has no significant rate of change in GDP, the GDP rises slightly at few points of time and remains almost constant for longer time intervals.

3. Based on the data you have presented, discuss how the GFC has influenced the economy for each country over the period. Discuss why the effects on each country may differ.

Ans. The global financial crisis has had effect on mostly two variables that are the unemployment and inflation rate. Both these rates show a rise during the GFC period after 2007.The effects on each country may differ due to extent of dependence in global economy, condition of internal economy  and the stability of currency.

4. Make use of AE diagrams to analyze and contrast the macroeconomic behavior of Greece and Australia. Discuss possible reasons for the differences. 

Ans. The charts on macro economic variables in the excel sheet  are the AE diagrams (Economic Analysis).

The GDP, GDP per capita is at lower level for Greece. The unemployment and inflation rate is higher for Greece. The government expenditure is higher for Australia.

With reference to the data available, it can be said that government expenditure can be the reason for better economic performance of Australia as compared to Greece.Government expenditure on Infrastructure, education, health can significantly influence economic conditions.

Reference:

Country wise data , viewed on 3^rd april 2012, http://www.imf.org/external/pubs/ft/weo/2011/02/weodata/weorept.aspx?sy=1999&ey=2012&scsm=1&ssd=1&sort=country&ds=.&br=1&c=193%2C924%2C174&s=NGDP_R%2CNGDPRPC%2CPCPIPCH%2CLUR%2CGGX&grp=0&a=&pr.x=24&pr.y=13#download [Accessed 4 April 2012].

www.worldbank.org, 2012, Country wise economic indicator, viewed on 3^rd april 2012, http://data.worldbank.org/indicator/FR.INR.RINR?page=1[Accessed 4 April 2012].

JD18

But you can order it from our service and receive complete high-quality custom paper.  Our service offers Economics essay sample that was written by professional writer. If you like one, you have an opportunity to buy a similar paper. Any of the academic papers will be written from scratch, according to all customers’ specifications, expectations and highest standards.”