The economic indicators

Table of Contents

2. Presenting the data in a single chart 1

3. The GDP and %of growth situation. 3

4. Definitions of the variables. 12

2. Presenting the data in a single chart

The GDP per capita of each country vary from time to time.

From the above table and from the line diagram it is clear that every country is achieving a high per capita income with the economic development. High level of per income capital describes the high per head income of the households of the country. When the per capita income becomes high it signifies less amount of inequality in the income distribution. From the statistical data and from the chart diagram it is clear that Russia and Australia both have the high level of per capita income and China and Indonesia both of the countries are facing lower amount of per capita income. The China and Indonesia both of the countries belong from Asia and are known as the developing countries. The developing countries and under developed countries generally possess less amount of economic resources than the developed countries. The population growth is also huge in the developing countries which reduce the per capita income of the countries. The Russian economy has observed an average growth throughout the decade but in this respect it can be said that the Chinese economy has achieved a drastic improvement in their per capita income. Though the Chinese economy and the Russian economy both were the followers of planned economic growth but the growth and development of the Russian economy was always more than the Chinese economy. Chinese economy is currently following the trend of globalization and thus has observed the improvement in the per capita income.

3. The GDP and %of growth situation

The above table and the diagram show the Gross Domestic product of Australia and Russia are more than any other countries in the list. The GDP are show in the units of Trillions of US dollars. In the terms billion it can be said that Russia has observed a huge downturn in terms of GDP growth rate from 2007 onwards. The Russian economy was hugely dependent on the foreign trade and the demand of technological products worldwide. The global recession not only hampers the economy of a certain country but it also affects the demand of the entire universe’s products. The demand of the products especially the technological and defense products were reduced due to the presence of the recession. The definition of the luxury was changed and the economy faced a huge uncertainty. The effect of the recession has affected the UK economy to a large extent also. In 2008, the UK economy has observed a GDP of 268.87 billion US dollars and implementation of several monetary and fiscal policies the GDP has improved a little by 2012. In 2012 the country has observed the GDP of 247.5 billion of US dollars. The Chinese economy has not faced any big problem due to the issue of recession. The Chinese economy is one of the potential economies of the world and it is known as a closed economy. The economy has closed its door for protecting the domestic economy from the outer strengths. Recently though the economy has accepted the value of globalization but till the recession takes place in the world market the Chinese economy opened very little space for the outside economies. This helped the Chinese economy to survive from the recession.

Using of several charts instead of using a single chart can provide clarity in the economic trends of the various variables. The single chart will show the trend of a single country.

Fig: The GDP of China

From the above figure it is clear that the Chinese economy has shown a positive and clear trend of growth in the GDP.

Fig: The GDP of Australia.

The Australian economy has also faced a positive trend and the growing rate of GDP is indicating the prosperity of the country.

Fig: The GDP of Indonesia.

The above diagram shows that there is a positive trend present in the Indonesian economy.

Fig: The GDP of Russian economy.

Growth rate results of various economies.

Fig: The growth rate of various countries.

The growths of each country are shown separately through the figures below:

Fig: The growth rate of UK from 2004 to 2012. The UK economy has observed a negative growth rate during the time of recession.

Fig: The growth rate of China.

From the above diagram it is clear that the Chinese economy is facing a downward growth rate in the economy.

Fig: The growth rate of Australian economy.

The above figure shows the fluctuated growth rate of Australian economy. Though the Australian economy has observed a low level of growth rate during the period of recession the growth rate has increased to some extent.

4. Definitions of the variables.

GDP: Gross domestic product of a country explains the values of the finished gods and services which are produced within the boundary of the country within the particular period of time frame.

Tax rate: The tax rate is a specific rate which is imposed by the government on some corporations or on some individuals to increase the source of revenues.

Yd: Yd is denoted by the disposable income of a household. The disposable income is denoted by the total personal income of a household minus the income taxes imposed on the households.

C: C determines the consumption function of an economy. The consumption function denotes the values of the goods and services purchased by the household within the given real income. The disposable income of the households is the main determinant of the consumption functions.

Investment: Investment in economics is known as a function of interest rate and income. Through the investment function it is understood how much investment is going to be happened in an economy. The investment function helps to identify the connection between the national income and the investment of a certain economy.

Government Expenditure: The government expenditure refers to the all kinds of expenses done by the government for the purpose of running the economy. To influence the business cycle several times government expenditure acts as a crucial factor.

NX: NX is determined by net export in the economy. The net export in the economy is described by the difference between export and import of a country.

AE: AE is denoted by the aggregate expenditure of a country and through the aggregate expenditure the national income of a country is measured.

AE= C+I+G -NX. (NX denotes the difference between export and import and here it is assumed that the import is more than export to adjust with the GDP)

Y: Y denotes the national income or the gross domestic product of an economy.

For all level of GDP, the given variables are as follows:

T= 4000,

I=4500

G=5000

NX=4500

The national income is,

Y=C+S+T

OR,     C+S+T=C+I+G

OR,     S+T=I+G

OR,     S=I+G-T

5,500

The disposable income,

YD=Y-T

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