Subject Code: ECON10003 Subject Name: Introductory Macroeconomics
Student ID Number: 762224 Student Name: Laura Walker
Assignment Name or Number: 1
TUTOR: Saqib Manzoor
TUTORIAL: Tuesday 8:00am – 9:00am
QUESTION ONE
a.
Seasonally adjusted data March quarter 2014 - March quarter 2015 December quarter 2014 - March quarter 2015
Australia 2.3% 0.9%
United States 2.9% 0.14966% (≈0.150%)
(Australian Bureau of Statistics, 2015) (Bureau of Economic Analysis, U.S. Department of Commerce, 2015)
There is a slight difference in growth change over the past year for the US and Australia (by 0.6%). The difference between the respective levels of growth over the December quarter 2014 – March quarter 2015 is greater (0.89).
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Department of Commerce, 2015) c. In the Australian National Accounts the largest industry sector in the March quarter 2015 is "mining" (B) (total: $35 173 million value added). The second largest is "Financial and insurance services" (K) (total: $34 842 million value added).
The "Information media and telecommunications" (J) industry sector experienced the highest rate of growth in the twelve months March quarter 2014 - March quarter 2015 at 11.1% change.
QUESTION TWO
Australia:
CONSUMER SENTIMENT:
"The Westpac–Melbourne Institute Index of Consumer Sentiment fell by 3.2% in July from 95.3 in June to 92.2 in July." (Westpac Institutional Bank, 15 July 2015)
(Trading Economics, 2015)
Consumer confidence plays a major role in indicating the future performance of an economy as it influences household consumer expenditure which for many countries (including US and Australia) is the most significant proportion of GDP. Therefore, changes in this variable will have an effect on GDP; and is likely to be a leading indicator of growth (real GDP).
By falling 3.2% it suggests there is lesser confidence than previously in aspects such as future employment prospects and consumers views on the
The current weak and volatile economic conditions, particularly in the United States and Canada, have impacted consumer spending. These week economic conditions will continue to impact consumer spending and purchasing habits for the foreseeable future. Consumers’
The figure obviously had not return to pre-crisis level. Moreover, recent commodity prices had fallen significantly which will affect Australia’s short and long term economy.
This report will show an overview of the current state of the Australian economy and its management by the Federal government through examining economic indicators such as economic growth (GDP), unemployment, inflation and trade.
This growth rate was primarily driven by high consumer spending supported by both government spending and rising employment levels. According to a report by the Australian Bureau of statistics, consumer spending contributed to two thirds of GDP growth in the fourth quarter. This came despite a fall in income levels as Australian residents used their savings for spending purposes, and was also helped by a booming real estate sector which was the largest contributor to the GDP growth in the fourth quarter. (Mehta, 2016). As can be seen in Fig.4 below, consumer spending in australia increased to 231332 million in the last qtr of 2015 from 229576 million in the third qtr of 2015.
In recent years, department stores industry has contracted since the hit of Global Financial Crisis creating shock on consumers’ confidence (Figure 2), despite Australia’s narrow escape from going into recession (Uren, 2009). As a result, the marginal propensity skyrocketed after GFC effect hit the economy from nearly mere 3% in mid-2007 to 12% in late-2008 (Figure 3). To stimulate the economy, RBA employs monetary policy by continuously lower cash rate since 2011 (RBA, 2012).
1. Gold Paved Road- The gold paved road in our container is a symbol for the theme immigration. The gold paved road is symbolic of the immigrant’s beliefs of a better and more luxurious country that they would be able to make a life in compared to their home countries, much like the luxurious nature of a gold paved road. Immigration relates to the theme of industrialization because of the horrible factory conditions that were endured for low pay because of an immigrant’s need for money in America.
A positive outlook is the drop of unemployment rate in October as a result of the increase in labor force. Many laid-off workers found jobs. The consumers
Australian economy is ranked 5th in global ranking while in Asia-pacific regional ranking it’s ranked at 4th. The main components of Australian economy on which it’s based are retail trade 5%, manufacturing 7%, services (including finance) 58% and mining 7% and construction 9%. Currently Australia’s economy is growing at
The Chinese film Xiu Xiu: The Sent-Down Girl was produced by Joan Chen and Alice Chen and directed by Joan Chen, with the screenplay also by her and Yan Geling. This movie is based on the story "Tian Yu" by Yan Geling about a similar topic. In this film, the point of view of a previously innocent teenage girl during the Sent-Down Movement in China is explored. However, over the course of the film, that girl’s, Xiu Xiu’s, innocence is taken away. Xiu Xiu’s loss of innocence was a result of multiple factors: her assailants who used her for their own personal pleasure, the passivity of other characters, Xiu Xiu’s own loss of hope, gender roles ingrained in the cultural norms in China, and the Chinese government’s manipulation of youths during the Sent-Down Movement.
According to Trading Economics, consumer confidence will remain stable, and personal spending will grow roughly 5% between reported Q2/17 and 2020. Furthermore, revenue in the manufacturing sector for the US is forecasted to grow at a CAGR of 4% between 2017 and 2021, based on changes in physical volume and unit prices. These factors indicate that NMP will be operating in a relatively stable, to slightly expanding environment. As noted in the charts below, manufacturing, real personal consumption expenditures, and consumer sentiment have been slightly increasing over the TTM.
The U.S. economy appears to be on track for a sustainable recovery from one of the biggest economic problems in history, the Great Recession. Unemployment and inflation are both down from where they had been and things have shifted towards recovery. Inflation is likely to remain in an acceptable zone, but policymakers must be vigilant concerning inflation expectations. Employment has recovered slowly but surely as well. Uncertainty/Fear appears to be growing among American, particularly with the unrest in the Middle East, but studies are showing that faith in economists (and the Fed leaders) among citizens is growing rapidly. Due to the uncertainty, flexibility is
The slow growth remains a cause for concern in light of consumer confidence, as it shows the “degree of optimism on the state of the economy that consumers are expressing through their activities of saving and spending” (McWhinney, 2004). Consumer confidence plays an important role in the Australian economy as it relates to income stability, which leads to its role in the nation’s consumption expenditure and savings schedules. Manipulation of the cash rate affects consumer expenditure and the nature of how much Australians are willing to spend, rather than save. Therefore if confidence is low, consumers are more inclined to save and not spend, and vice versa if confidence has increased. Currently, the confidence index shows that Australia is at 93.9, a fall by 5.6%. In this context, falling below the index of 100, shows that consumers are showing more concern to the state of the Australian economy than being optimistic for it. Furthermore, there are doubts in “both Australian and overseas equity markets; poor economic data from
In "Van Gogh's Agony," the author, Lauren Soth, is arguing why Van Gogh’s “Starry Night” represents his agony. She tells us that the agony was caused by his loss of faith in the church. She pulls several quotations from letters written by Van Gogh to support her thesis. Soth discusses how both his choice of landscape, color and style represent agony in the artwork. Through the landscape, she said that the painting was a culmination of other artwork he has done in the past.
Perhaps the best indicator showing a strong correlation between security and the economy is the Consumer Confidence Index, which is issued in partnership between the Byblos Bank and the American University in Beirut. The Consumer Confidence Index recorded a recovery in the first half of 2014, as a result of the formation of the government in February and a relative improvement in the security situation, after a halt in the series of bombings, which rocked Beirut and Tripoli from March 2013 to January 2014. Thus, the indicator stood at 29 in the second half of 2013 and reached 33.5 in the first
In March 2015, Greg Jericho published an article called Weak, weak growth and six things about the state of Australia’s economy that outlined how in the past 6 out of 10 quarters the Australian