The Importance Of Household Consumption

An economic downturn automatically paves way to a decline in taxation and an increase in government spending. This causes deficit. Nevertheless, if the government tries to reverse the situation by increasing tax rates, it would further result in a deflated economy leading to more unemployment and lower economic growth. A negative multiplier effect may give rise to an increase in deficit. Thus, deficit increases AD in a recession (Carbaugh, 2011).

Australia and China’s economic growth vary in terms of different increases in their gross domestic product, or GDP, which is measured in US dollars. Economic growth refers to a change in a nation’s output of goods and services over a period of time which is reflected by gross domestic product. During periods of economic boom, GDP is generally high. Similarly, during periods of recession, GDP is generally low. Australia is a mixed market economy, where the government plays a major role in providing collective goods and services while the private sector makes most of the economic decisions. Income is determined by the market but the government controls some private sector behaviour, minimum wage requirements, redistribution of income and other related economic activities. China, on the other hand, is a centrally

Consumerism in America has been at an all time high for years now. Consumerism refers to the consumption of goods and services at an ever-increasing rate. It is one of the many things that America is know for. Our economy is judged by how much people spend, and if it is high then our economy must be well off (Shukla 1). This ideology is purely materialistic and pushes people towards higher consumption than is needed. It transforms others into overly materialistic people who cannot distinguish the difference between wants and needs, and negatively affects those around them including the environment because of the glorification of material wealth.

The Australian economy is playing a crucial role in terms of global economy. Based on the government’s analysis, Australia has been placed at the top 20 for the world’s largest economy. This caused a lot of economists to pay attention to Australia’s performance. Economists use macroeconomic objectives to analyse the national economy. This essay will focus on two macroeconomic objectives, how they are measured, and how they relate to each other. Furthermore, it will also discuss Australia’s performance over the past three years (2013-2015) and predictions concerning Australia’s performance in terms of these objectives in 2016.

Australia’s economy over the past decade has improved steadily. Over the 2004 – 2013 period, the GDP averaged at USD1.05 trillion1 and rise in GDP per capita from USD30,449 in 2004 to USD67,4732 in 2013.

During my lifetime the Australian economy has been one of the strongest and most consistent in the world. There are a multitude of factors that have led to this and allowed the Aussies to be in this position. One of them being steady GDP growth rates, averaging around 3.5% annually (Heritage.org). Australia has also benefitted from considerably low inflation and unemployment rates. With this mixture of GDP growth, low inflation, and unemployment, they consistently set themselves up to be one of the strongest economies in the region, as they ranked third in the ranking of regional economies (Heritage.org). Another reason for Australia’s ongoing success is primarily because of the growth in foreign demand of importing

One of Milton Friedman's first great contributions in the economics world was his Theory of the Consumption Function in 1957. “This theory championed the idea that a person's consumption and savings decisions are more greatly impacted by permanent changes to income rather than changes to income that are perceived as ephemeral” (Who was Milton Friedman, Investopedia). Instead, Friedman presented that people’s annual consumption is a function of their permanent income, a term he announced as a measure of the average income people expect over a few years.

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

It is said that the Australian economy was picking up in the March quarter in 2015, although the growth rate of the economy is still below the average over the past year. And there were some early indications that the strength of growing in the June quarter was not as strong as in the March quarter (Rba.gov.au 2015). Different kinds of macroeconomic indicators construct a picture of current macroeconomic conditions in Australia. There are a great number of macroeconomic indicators, three of the most important indicators will be focused as following, such as gross domestic product, consumer price index and labor force.

The Gross Domestic Product in Australia enlarged by 0.2 percent in the second quarter of 2015 above the first quarter. GDP Growth Rate in Australia was around 0.87 percent from 1959 until 2015. It reached an all-time high of 4.4 percent in the first quarter of 1976 and a record low of negative 2 percent in the second quarter of 1974. In 2013, Australia’s GDP per capita was $67,458.36 in U.S. dollars, and the United States’ was only $53,041.98. The inflation rate in Australia was documented at 1.5 percent in the second quarter of 2015. Inflation Rate in Australia was around 5.18 percent from 1951 until 2015. It reached an all-time high of 23.9 percent in the fourth part of 1951 and a record low of -1.3 percent in the second quarter of 1962 (“Australia Inflation Rate,” 2015).

The rise of upper middle-class – 81% of consumption growth will come from households whose annual income is more than

Prior to the Global Financial Crisis Australia experienced strong economic growth, low levels of unemployment and strong growth in both the housing and share market. This was due to the mining boom and strong demand for Australia’s commodity exports.

The economy of Australia is one of the biggest blended business sector economies on the planet, with a GDP of US$1.525

The overall trends shows that Australian economy is in moderate level, but the GDP annual growth is below expectation. In addition, recently Australia are facing two important issue, which are increasing budget deficit and aging population. If the government does not give the efficient policy for solving this problem, it can affect to decline in Australian economic performance.

The overall trends shows that Australian economy is in moderate level, but the GDP annual growth is below expectation. In addition, recently Australia are facing two important issue, which are increasing budget deficit and aging population. If the government does not give the efficient policy for solving this problem, it can affect to decline in Australian economic performance.