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SUBJECT: MANAGERIAL ECONOMICS II
CHANDAN PRAJAPATI S. Y. B. M. S. S-224
A great thanks to my friends and family who have helped me in some way or another. Khar Education Society for giving me all the support required for the project.ACKNOWLEDGEMENT Finishing a job has never been an easy task for a single person. I would also like to thank my college. THANK YOU EVERYONE. . as a result of Invaluable contributions from individuals in the surrounding in a direct or indirect manner I am a lot thankful to many people who have helped me and supported me while I was doing this project. who has guided me and helped me to make my project as perfect as possible with great attention and care. M/s Bhavana Bhankaria. My sincere thanks to our very helpful lecturer. But I have achieved.
2. 4. 3.CONTENT SR. . PARTICULARS Macro Economics and National Income Iceland and its Economy National Income of Australia Growth and Decline Of National Income in Australia Conclusion References 5. 6. NO 1.
inflation. . While micro economics deals with individual economic units like price of a product. Around the early 1900’s. This is because man has always been considered with management of his resources. national income has to be taken in a wider sense. To a common person it is the income of the nation. employment levels. etc. economic theory got divided into 2 main branches: micro economics and macro economics. But in the study of economics. National Income has to be considered in 2 senses: Real and National. using the slicing method of study.MACRO ECONOMICS AND NATIONAL INCOME Economics is as old as man himself. It studies concept like national income. National income is the most important macro economics concept. countries balance of payments. etc. Macro economics deals with economy aggregates using the lumping method of study.
Thus the price of the commodity becomes important to get to the national income in the money sense. we will not get accurate national income figures. Thus.In real sense. There are many other reasons why national income is important. This method is not very popular. developing and under-developed. National Income refers to aggregate physical quantities of all goods and services produced in a country within one year. It’s important to study National income because it tells us about the country’s economic performance during the financial year. Care must be taken that there is no double counting of any goods or services. At the same time no goods or services should be avoided as in both cases. The more widely used method to arrive at National Income is in its money sense. National income figure’s tells us whether the country is developed. . the study of National Income is very important. where the money value of all the goods and services produced is aggregated over to arrive at the country’s national income.
the Solomon Islands. the island of Tasmania and numerous smaller islands in the Indian and Pacific Oceans. economic freedom and the protection of civil liberties and political rights. A developed country. Vanuatu and New Caledonia to the northeast and New Zealand to the southeast. life expectancy. Australia is the world's thirteenth largest economy and it holds a position 16 in Global Competitiveness Index 2010–2011 rankings made by World Economic Forum. health care. Neighbouring countries include Indonesia.AUSTRALIA AND ITS ECONOMY Australia is a country in the Southern Hemisphere comprising the mainland of the Australian continent. public education. quality of life. Australia ranks highly in many international comparisons of national performance such as human development. . East Timor and Papua New Guineato the north.
175.000.000 $399.000 $447.771.000 $922638.000 $626.625.000 $390.000.000 $312.000.NATIONAL INCOME OF AUSTRALIA YEAR 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 VALUE $251.000.000 $670.290.120.000 $559.000 $275.000.000 $760.000.221.000 $424.377.649.000.000.332.508.904.214.238.000 $468.000.000.609.434.138.000 $526.000.000 $589.585.000.000 $814.000.000 $862.000.000 $383.000.000.000.000 .000 $351.461.722.000.000.000 $498.000 $716.601.000.000.
000 $329.000 $468.000 $1.000 $390.000 $437.300.500.700.900.000 $403.208.674.300.000 .529.000 $371.000 $696.415.000 $315.000 $924.000 $749.427.000 $401.239.000 $397.991.700.000 $314.033.660.553.900.923.900.000 $328.000 $416.039.100.468.316.518.000.843.800.216.700.276.000 $856.000 $380.800.700.853.400.090.GDP OF AUSTRALIA YEAR 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 VALUE $301.000.100.000 $326.700.816.700.400.965.400.000 $615.
the Australian dollar was floated and financial deregulation was undertaken. but mainly driven by Treasurer Paul Keating. In 1983. Australia's per-capita GDP is slightly higher than that of the UK.OVERVIEW OF AUSTRALIA’S NATIONAL INCOME From the early 1980s onwards. and France in terms . income taxes were lowered as a trade-off for the introduction of the GST. Germany. In 2000. The overall level of taxation in Australia has since been consistently reduced to encourage private consumption and investment. the Australian economy has undergone a continuing economic liberalisation. the introduction of a goods and services tax (GST) sought to encourage the level of saving amongst lower income earners. under Prime Minister Bob Hawke. To combat the consequential reduction in consumption for low income earners. as opposed to higher government expenditure.
education and financial services. The country was ranked second in the United Nations 2009 Human Development Index and sixth in The Economist worldwide quality-of-life index 2005. inflation has typically been 2–3% and the base interest rate 5–6%.6% for over 15 years. Australia's average GDP growth rate for the period 1901-2000 is at 3. with an unemployment rate of 5. The emphasis on exporting commodities rather than manufactures has underpinned a significant increase in Australia's terms of trade during the rise in commodity prices since 2000. there were approximately 10.4% annually.000 people employed.of purchasing power parity.5%. well above the OECD average of 2. constitutes 69% of GDP. Over the past decade. As of December 2009. Australia's current account is more than 7% of GDP negative: Australia has had persistently large current account deficits for more than 50 years.5%. .844. including tourism. The service sector of the economy. Australia has grown at an average annual rate of 3.
this sector grew from around 4. This growth has largely been at the expense of the manufacturing sector. one of the most significant sectoral trends experienced by the economy has been the growth (in relative terms) of the mining sector (including petroleum). with property and business services in particular growing from 10% to 14. making it the largest single component of GDP (in sectoral terms). India and the USA. particularly wheat and wool.5% in 199394. In the past decade. which in 2006-07 accounted for around 12% of GDP. respectively.Rich in natural resources. it was the .5% of GDP over the same period. they contribute substantially to export performance. China. and energy in the forms of liquified natural gas and coal. Growth in the services sector has also grown considerably. South Korea. In terms of contribution to GDP. A decade earlier. minerals such as ironore and gold. Australia is a major exporter of agricultural products. Although Agriculture and natural resources constitute only 3% and 5% of GDP. to almost 8% in 2006-07. Australia's largest export markets are Japan.
partly in response. electricity generation and agricultural industries have concerns about the impact of requirements to reduce carbon emissions under the proposed Carbon Pollution Reduction Scheme -Which. Professor Steve Keen has written extensively about consumer/household indebtedness and the level of home prices relative to income.2008 financial year was up 4% to $19. Increasing levels of government debt triggered by Federal government spending are an emerging public policy issue. an Australian property bubble.largest sector in the economy. The price of housing in terms of median incomes has been highlighted by a recent Demographia survey with Australian capital city residential housing being among the most expensive . Current areas of concern to some economists include Australia's large current account deficit. The coal. accounting for just over 15% of GDP. has been shelved until 2012. and high levels of net foreign debt owed by the private sector. the absence of a successful export-oriented manufacturing industry. Australia’s current account deficit for the 2007.49 billion (according to the Australian Bureau of Statistics).
A long drought and its impacts on retail food costs and export volumes of crops and meat and the possible impacts of climate change on agriculture has also been of concern. the Australian dollar was floated in 1983 and government run enterprises from the Commonwealth Serum Laboratories to Qantas were privatised. Each of those exchanges had a history of share trading dating back to the 19th century. Deregulation of the Australian economy started under the Hawke Labor government. Tariffs were progressively cut. The 1980s economic reforms. . The Australian Stock Exchange Limited (ASX) was formed in 1987 through the amalgamation of six independent stock exchanges that formerly operated in the state capitals. including establishing a Goods and Services Tax and deregulating labor markets. intended to diversify the national economy and make it more resilient. The Howard government continued with even more controversial reforms.in the world.
This is a chart of trend of gross domestic product of Australia at market prices estimated by the International Monetary Fund with figures in millions of Australian Dollars.307 1995 500. economists have warned that structural change is . the US Dollar is exchanged at 0.27 Australian Dollars 80 1. Despite high global demand for Australian mineral commodities.880 2007 1.87 Australian Dollars 36 1.were introduced after the mid-1980s decline in the terms of trade.596 1990 407.458 2000 669.42 Australian Dollars 54 1. Even though Australia enjoys high commodity prices.779 2005 926.987 1985 245.34 Australian Dollars 90 1. export growth has remained flat in comparison to strong import growth.044.26 Australian Dollars 122 For purchasing power parity comparisons.162 Inflation Index (2000=100) 0.98 Australian Dollars. Year Gross Domestic Product US Dollar Exchange 1980 140.71 Australian Dollars 100 1.30 Australian Dollars 116 1.
the Australian government has endeavoured to redevelop the Australian manufacturing sector. also known as microeconomic reform. the Australian economy has had persistently large current account deficits for more than 50 years. One single factor that undermines balance of payments is Australia's narrow export base. This initiative. Dependent upon commodities.8% in 2003-2004. there . However.needed in order to increase the size of manufacturing sector In trade terms. Lack of international competitiveness and heavy reliance on capital goods from overseas might increase Australia's current account deficit in the future. There are other factors that have contributed to the extremely high current account deficit that Australia has today.1% in 1983-1984 to 17. as Australia's current account deficit (CAD) are almost entirely generated by the private sector as outlined in Professor John Pitchford's 'Consenting Adults Thesis' in the early 1990s. has helped Australian manufacturing to grow from 10.
is an argument that the CAD is not a significant issue. . the economy’s petroleum import dependency is around 80% . representing 68% of Australian GDP. The agricultural and mining sectors (10% of GDP combined) account for 57% of the nation's exports. Historically. This would suggest that Australia's apparently low savings level and CAD are not necessarily a great problem. The Australian economy is dependent on imported crude oil and petroleum products. The Australian economy is dominated by its service sector.crude oil + petroleum products. So long as the investment that is being funded by overseas capital inflow generates sufficient returns to pay for the servicing costs in the future. Australia has relied on overseas capital to fill the gap between domestic savings and investment. the increase in foreign liabilities can be viewed as sustainable in the longer term. and many of these investment opportunities could not have been pursued if Australia did not have access to foreign savings.
This situation will make Australia one of the most powerful economies in the world.CONCLUSION There has been tremendous progress in the economy of Australia. . It has never faced downfall because of its good economic relationship with other countries and the political stability in its very own country. The natural resources have been a very important plus point for the progress of the economy.
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